An insight view from Aurelio Flacco – Italian business entrepreneur residing in Cambodia since 2015 – Chairman of the Italian-Cambodian Business Association (ICBA) and Honorary Consul of Italy in Phnom Penh.
Mr. Flacco, is Cambodia still a good place to invest?
Absolutely. For the last twenty years, Cambodia has been successfully positioned itself as an increasingly attractive business destination. It is amongst the fastest-growing ASEAN countries with an impressive economic growth of roughly 7% per annum.
In your view, what are the incentives that can attract foreign investment in Cambodia?
Cambodia has a welcoming attitude to foreign investors and offers them a unique open-door policy. To quote a few:
- The government allows 100% ownership of a company
- There are no restrictions on financial movements in and out of the country
- US Dollar makes it easy for financial transactions because it is stable. Khmer Riel also retains a $1=4,000 exchange rate.
- Foreigners can lease land for 50 years or more.
- Foreigners don’t need to change citizenship. They can also send income and any profit back to their home country.
- Relatively little red tape. According to the World Bank Economic report, it takes 99 days to open a business in Cambodia, at the most.
- Special tax rates and exemptions are provided to Qualified Investment Project (‘QIP’)
What are the most relevant sectors for investment in Cambodia?
The traditional vital industries are manufacturing, agriculture, real estate, and tourism. However, I see increasing opportunities in emerging sectors such as health, new energy sources, and sustainable recycling solutions.
What are the challenges of doing business in Cambodia?
The partial suspension of the EBA (Everything but Arms) scheme can lower export volume. In addition, the recent spread of coronavirus has caused a downward trend in tourism. Generally speaking, a slight slowdown in the Chinese economy will significantly impact Cambodia’s growth. However, the Cambodian government has promptly reacted by adding new laws to make it easier for foreigners to keep their investments in Cambodia.
What advice would you give to an Italian-based company wanting to invest in Cambodia?
Based on my five years’ experience in Cambodia as an entrepreneur, I would suggest any foreign business do in-depth research through local, trusted advisors to decide whether to invest in the Kingdom.
The Italian – Cambodian Business Association (ICBA) aims to be the first entry point to any Italian company wanting to do business in Cambodia.
Can you tell us more about ICBA?
The Italian – Cambodian Business Association (ICBA) aims to be the first entry point to any Italian company wanting to do business in Cambodia. Incorporated in 2017 as a National Chapter of EuroCham Cambodia, we in ICBA promote Italian excellence, culture, and bilateral trade between Italy and Cambodia. In addition, we provide information and support to companies in international business, general consultations, referrals, import and export data, workshops, market research, trade fairs, and trade delegations.
How do you see the future?
I am optimistic by nature. However, Cambodia has already proved to recover from its history, and relevant sources seem to confirm my view. According to the International Monetary Fund, Cambodia’s Gross Domestic Product will increase to 6,0% in 2022. IMF also predicts that Cambodia will be the fastest-growing ASEAN economy by 2026.
Despite the risks, Cambodia’s economic challenges grow in line with the opportunities.
📌The information contained in the article is provided for information purposes only, and is not intended to constitute legal advice.