Economic Overview
In the course of recent decades, Cambodia has experienced a huge change, achieving lower center salary status in 2015. Experts seek to accomplish upper center pay status by 2030. Driven by piece of clothing fares and the travel industry, Cambodia’s economy has supported a normal development rate of 7.7% somewhere in the range of 1995 and 2018, making it among the quickest developing economies on the planet.
As worldwide interest crested in 2018, monetary development is assessed at 7.5%, contrasted with 7% in 2017 and is relied upon to stay powerful over the medium term.
Cambodia keeps on having a serios framework hole and would profit by more noteworthy network and putting resources into provincial and urban foundation is basic. Further broadening of the economy will require encouraging business enterprise extend the utilization of present day innovation and fabricate new aptitudes to address developing work market needs.
Responsible and responsive open foundations will likewise be basic to meeting the developing needs of residents and the private division. Also, nature of human capital will be of most extreme significance to accomplish Cambodia’s driven objective of achieving a center pay economy status by 2030.
Main sectors in Cambodia
The country has exceedingly created material and rural enterprises. It essentially manages the last phases of transforming yarns and textures into the last piece of clothing. The business is solid encountering consistent development.
Agriculture Industry
With 59% of the Cambodian populace occupied with farming, this is the essential business of the nation. Rice is the primary sustenance crop, while elastic is the central business crop in Cambodia. Numerous worldwide guide associations are supporting ranchers through harvest enhancement projects to develop different yields.
Tourism Industry
The travel industry has been the second biggest wellspring of outside trade for Cambodia for quite a long time after material. The significant vacationer goals in the country are Siem Reap, Phnom Penh, Sihanoukville, Kampot and Kep. The travel industry fell by 2% in mid 2009. The Cambodian government is looking for assistance from the US to give a lift to its travel industry area.
Garment industry
Generally, Cambodia’s piece of clothing industry has been the greatest outside trade worker. As indicated by Cambodia’s Ministry of Commerce, the worldwide financial downturn hugy affected this division. The legislature is finding a way to cut expenses by empowering neighborhood generation and improving access toward the Western markets.
Mineral Industry
In 2005, Cambodia pulled in gigantic outside speculation because of recently discovered stores of oil, bauxite, gold, iron and pearls. Real speculators were the US, Thailand, Australia, South Korea and China. Shockingly, its mineral assets stayed unexplored, all things considered, in 2006.
Taxes in Cambodia
Corporate tax rate
The standard rate of corporate income tax (CIT), previously known as tax on profit, for companies and PEs who are classified as medium and large taxpayers is 20%.
For companies and PEs who are classified as small taxpayers, the CIT rates are progressive rates from 0% to 20%.
Industry-specific tax rates
Oil and gas and certain mineral exploitation activities are subject to CIT at the rate of 30%.
Insurance companies are taxable at a rate of 5% on the gross premium income and at the rate of 20% on other income derived from non-insurance/reinsurance activities. Net interest income of insurance companies received after 4% or 6% WHT is not taxable income.
The small taxpayer is subject to CIT at the progressive rates as stated in Article 20 of the Law on Taxation.
Additional CIT on dividend distribution
A dividend-paying taxpayer is required to pay an additional CIT at the time of dividend distribution if the profit was previously subject to a 9% or 0% CIT. The rates of additional CIT vary depending on the profits to be distributed.
Investing in Cambodia
The Cambodian investment climate is driven by the country’s attractiveness for FDI. The country has very open investment laws and offers a range of incentives to investors. 100 percent foreign ownership of companies is allowed in most sectors.
Cambodia possesses a fast-growing youth population that is educated and technology savvy, meaning that it has contributed to the high mobile and internet penetration rate (100% and 84% respectively, according to Ministry of Economy and Finance statistics), fast technological spillover from FDI inflows, and comparatively rapid digitization in all key economic sectors.
Here are the main reasons to invest in Cambodia:
- Growing tourism sector
- A large number of expats
- US Dollar investments
- Sustained GDP growth (5% average)
- Secure assets
- Strategic location
- Trade integration by being a member of ASEAN