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Cambodia: Market Profile

Picture: Cambodia factsheet
Picture: Cambodia factsheet

1. Overview

Cambodia attained lower-middle-income status in 2017, having sustained an average growth rate above 7% in the past decade, mainly driven by garment exports and tourism. Economic growth is expected to remain robust in the medium term as recovering tourism activity and fiscal expansion compensate for some easing in garment exports and construction growth. In the future, maintaining macroeconomic stability and enhancing economic diversification, export competitiveness and quality of public service delivery will be key to sustaining higher growth.

Sources: World Bank, Fitch Solutions

2. Major Economic/Political Events and Upcoming Elections

January 2018
The Asian Development Bank signed three financing agreements with the government of Cambodia to finance the improvement of roads, provincial water supply and sanitation, and small farms. Part of this includes a USD50 million loan to expand and improve water supplies and sanitation in Battambang, Kampong Cham, Siem Reap and Sihanoukville and to build wastewater treatment systems.

February 2018
The Cambodian People's Party (CPP) won all 58 seats in the Senate.

February 2018
Transport officials from Cambodia and Vietnam had agreed to push ahead with the Phnom Penh (Cambodia) to Binh Phuoc Province (Vietnam) Rail Line. The link will also be part of a region-wide railway project which would connect Singapore to China’s Yunnan Province via Malaysia, Thailand, Cambodia and Vietnam.

June 2018
Casino and water park project Wisney World was announced. The estimated USD1.1 billion resort situated in Sihanoukville was expected to be completed in 2022.

July 2018
Cambodia received a loan of USD351 million from Mainland China to build a new road in the Cambodian capital city Phnom Penh.

July 2018
The Cambodian National Assembly election was held on July 29, 2018. The ruling CPP won all 125 National Assembly seats.

September 2018
Chinese developer Union Development Group announced that it was investing USD1.2 billion to build the Tourism Vacation City, situated in Cambodia's Koh Kong province. Construction was expected to start in 2019.

October 2018
On October 5, 2018, the European Union (EU) announced that it would conduct a six-month review on Cambodia's special trade access to the world's largest trading bloc.

October 2018
The World Bank's latest economic data revealed that Cambodia's efforts to attract tourists were paying off, with arrivals reached three million during the first six months of 2018. Tourists from mainland China ranked first, followed by those from Vietnam, Laos and South Korea.

January 2019
The EU reinstated three-year duties on rice from Cambodia, arguing that the cheaper imports had harmed European producers and caused them to lose some of their market share. Cambodian exports of rice to the EU had increased from 8,000 tonnes in 2009 to 345,000 tonnes in 2016.

January 2019
During a state visit to Mainland China, Cambodia's Prime Minister Hun Sen urged President Xi Jinping to enter into a free trade agreement (FTA) with Cambodia. Any such relaxation on trade restrictions might help to transition the Cambodian economy away from textiles.

February 2019
The EU announced that it was to start the process for withdrawing Cambodia's 'Everything but Arms' preferential trade scheme. Textile exports remain a vital part of the economy, and because approximately 80% of Cambodian goods exported to the EU are textiles, this development could have a negative impact on the industry in the short term. Although any withdrawal of the scheme would not occur until 2020 at the earliest, EU-based companies may pre-emptively move their textiles manufacturing bases away from Cambodia in the meantime.

March 2019
Cambodia's Ministry of Tourism announced that foreign tourist numbers had increased by 10% for the first two months of 2019 compared with the year before. Although the number of tourists from Mainland China had increased by 31.7%, the Ministry said that Cambodia still attracts fewer Chinese tourists than other countries – two million in 2018 out of 125 million Chinese tourists worldwide. Cambodia attracted 6.2 million foreign tourists in 2018, an increase of 10.7% from 2017.

April 2019
The Cambodian government approved the construction of a hydroelectric dam and supplemental solar power stations with a total electrical capacity of 220MW to try to deal with a national 400MW power shortage. The developments were described as moves towards strengthening energy security. At the same time, a draft of the Law on Oil and Petroleum Products Management, designed to promote the development of a sustainable oil and gas sector, was approved. The first oil extraction in Cambodian history is expected in 2019.

April 2019
NagaCorp, the owner of NagaWorld, Phnom Penh's only licensed casino, announced the construction of a USD4.0 billion integrated entertainment complex to be called Naga 3. In 2018, NagaWorld saw its net profit increase by 53% to USD390.6 million.

June 2019
Cambodia's state-run electricity supplier Electricite Du Cambodge (EDC) has signed an agreement with two Chinese firms to build a power facility fuelled by heavy fuel oil and liquefied natural gas that will be able to generate 400MW. The construction timeline was unclear; however, EDC representatives have said that the facility will be ready within 10 months.

Sources: BBC Country Profile – Timeline, Fitch Solutions, Al Jazeera, Khmer Times, The Guardian, The Phnom Penh Post

3. Major Economic Indicators

Graph: Cambodia real GDP and inflation
Graph: Cambodia real GDP and inflation
Graph: Cambodia GDP by sector (2018)
Graph: Cambodia GDP by sector (2018)
Graph: Cambodia unemployment rate
Graph: Cambodia unemployment rate
Graph: Cambodia current account balance
Graph: Cambodia current account balance

e = estimate, f = forecast
Sources: IMF, World Bank
Date last reviewed: July 30, 2019

4. External Trade

4.1 Merchandise Trade

Graph: Cambodia merchandise trade
Graph: Cambodia merchandise trade

Source: WTO
Date last reviewed: July 30, 2019

Graph: Cambodia major export commodities (2016)
Graph: Cambodia major export commodities (2016)
Graph: Cambodia major export markets (2016)
Graph: Cambodia major export markets (2016)
Graph: Cambodia major import commodities (2016)
Graph: Cambodia major import commodities (2016)
Graph: Cambodia major import markets (2016)
Graph: Cambodia major import markets (2018)

Note: Direct data of 2017 and 2018 are not available
Sources: Trade Map, Fitch Solutions
Date last reviewed: July 30, 2019

4.2 Trade in Services

Graph: Cambodia trade in services
Graph: Cambodia trade in services

Source: WTO
Date last reviewed: July 30, 2019

5. Trade Policies

  • In April 2001, Cambodia joined the World Customs Organization and in October 2004 it became a member of the World Trade Organization (WTO). In February 2016, Cambodia ratified the WTO Trade Facilitation Agreement. Cambodia has been awarded preferential most favoured nation status by mainland China, France, Germany, the United Kingdom and the United States.

  • Cambodia joined the Association of South East Asian Nations (ASEAN) in April 1999 and served as the ASEAN chair in 2012. The ASEAN members have agreed to lower intra-regional trade tariffs through the Common Effective Preferential Tariff Scheme for the ASEAN Free Trade Area. New members, such as Cambodia, have already gone a long way towards removing such tariffs, with almost 80% of their products being tariff-free, helping drive trade with Cambodia and the rest of the region.

  • Since 2015, many tariffs between the ASEAN member states have been removed. The ASEAN is aiming for eventual customs unification. The rewards of lower tariffs within the area have been seen, with regional trade booming in recent years, especially as Singapore is a major exporting partner. The import tariff rates, however, are high in Cambodia. The country's average import tariff rate of 4.85% is the second highest in the East and South East Asia region.

  • Cambodia imposes tax, such as value added tax (VAT) and special tax on certain imports (among which include gasoline and diesel). The highest ad valorem rate of 35% applies to finished agricultural products (including processed meat, processed fruit and vegetables and dairy products), finished industrial products and petroleum products.

  • Cambodia imposes the most number of tariffs on transport equipment and vehicles, agricultural machinery or parts, petroleum and oils (other than crude), and pulp, paper and paperboard. China has the most Cambodian tariffs applied to its goods, followed by Malaysia, Japan, Vietnam, South Korea and Thailand - representing three out of five of Cambodia's largest import destinations.

  • In addition to customs duties, Cambodia prohibits or restricts the importation of certain goods for a number of reasons, such as national security, public order, cultural, environmental, health and safety. Over 1,500 tariff lines are subject to import prohibition or licensing.

  • There are Bilateral Investment Treaties between Cambodia and the following 14 countries: Mainland China, Croatia, the Czech Republic, France, Germany, Japan, South Korea, Malaysia, the Netherlands, the Russia, Singapore, Switzerland, Thailand and Vietnam. Twelve others are signed but not yet in force.

  • Cambodia has double taxation agreements (DTAs) with six countries.

Sources: WTO – Trade Policy Review, UNCTAD, General Department of Taxation of Cambodia, Fitch Solutions

6. Trade Agreements

6.1 Trade Updates

In 2017 Cambodia slightly increased the tariff protection for all agricultural products to an average of 16.1%, which remains higher than the most favoured nation applied tariff of 12.3%.

6.2 Multinational Trade Agreements


  1. Cambodia is a member of the ASEAN, alongside Brunei Darussalam, Indonesia, Laos, Myanmar, the Philippines, Singapore, Malaysia, Thailand and Vietnam. The ASEAN Free Trade Area was signed on January 28, 1992, and entered into force on January 1, 1993. In 2017, the ASEAN accounted for 37.2% of Cambodia's imports and 10.0% of Cambodia's exports (latest data available), making the group Cambodia's largest import and fourth-largest export partner. A number of FTAs have been signed by the ASEAN.

  2. ASEAN-Mainland China: The ASEAN-Mainland China FTA covers goods and services. The FTA for goods came into force on January 1, 2005,  and the FTA for services came into force on July 1, 2007. The agreement aims to eliminate tariffs, encourage investment and address the barriers that impede the flow of goods and services. The ASEAN-Mainland China Free Trade Area was last upgraded in 2015. In 2017, the ASEAN was the recipient of 12.3% of mainland China's exports and the source of 12.8% of imports. Total merchandise trade between the ASEAN and mainland China grew by 215% between 2005 and 2016 (latest data available). Mainland China-Cambodia trade more than doubled between 2012 and 2016, reaching USD5.1 billion.

  3. ASEAN-India: The ASEAN-India trade in goods agreement came into force on January 1, 2010 for goods and on July 1, 2015 for services with the aim of minimising barriers and deepening economic linkages between the parties. Cambodia joined the agreement in July 2011. The agreement will lead to the progressive elimination of tariffs on all goods. The ASEAN accounted for 10.2% of India's imports and 12% of India's total exports in 2017.

  4. ASEAN-South Korea: The ASEAN-South Korea FTA came into force in January and October 2010 for goods and services, respectively. The investment agreement entered into force on September 1, 2009. The agreements aim to create more liberal, facilitative market access and investment regimes between South Korea and the ASEAN. A business council was set up in December 2014 to enhance economic cooperation between the parties and boost total trade to USD200 billion by 2020. The ASEAN was the recipient of 11.2% of South Korea's exports in 2017 and the source for 16.6% of imports. Total trade between the ASEAN and South Korea grew by 68% between 2007 and 2017.

  5. ASEAN-Japan: The ASEAN-Japan FTA is for goods only and came into force on December 1, 2008. Cambodia joined the agreement in December 2009. This will lead to the progressive elimination of tariffs on all goods.

  6. ASEAN-Australia-New Zealand: The ASEAN-Australia-New Zealand FTA and Economic Integration Agreement for goods and services came into force on January 1, 2010. Cambodia joined the agreement on January 4, 2011.

  7. United States-Cambodia: A bilateral Trade and Investment Framework Agreement (TIFA) between the United States and Cambodia was signed and entered into force on July 14, 2006. The TIFA allows favourable trade terms with the United States, which is Cambodia's largest exporting partner, accounting for 21.3% of Cambodia's exports in 2016 (latest data available). The TIFA provides a forum to address bilateral trade issues and allows Cambodia and the United States to coordinate on regional and multilateral issues. As Cambodia forms part of the United States' Generalized System of Preferences (GSP), many of its exports to the United States are exempt from tariffs.

  8. EU-Cambodia: Cambodia has been a major beneficiary of the EU's GSP, which grants virtually all products – except arms and ammunition from less-developed countries – duty-free and quota-free access to the EU market. EU trade accounts for approximately 42% overall of Cambodia's footwear and garments exports. In October 2018, the EU notified Cambodia that it would start the process for the withdrawal of their Everything but Arms preferential trade scheme. In February 2019 the EU launched the process that could lead to the suspension of Cambodia's preferential access to the EU market.

  9. ASEAN-Hong Kong FTA (AHKFTA): Hong Kong and the ASEAN began negotiating an FTA and an Investment Agreement in July 2014. After 10 rounds of negotiations, Hong Kong and the ASEAN announced the conclusion of the negotiations in September 2017 and forged the agreements on November 12, 2017. The agreements are comprehensive in scope, encompassing trade in goods, trade in services, investment, economic and technical cooperation, a dispute-settlement mechanism and other related areas. The agreements will bring legal certainty, better market access and fair and equitable treatment in trade and investment, thus creating new business opportunities and further enhancing trade and investment flows between Hong Kong and ASEAN. The agreements will also extend Hong Kong's FTA and Investment Agreement network to cover all major economies in South East Asia. The agreement came into force on January 1, 2019, but will take time for all members of ASEAN to comply because implementation is subject to completion of the necessary procedures. Hong Kong is a key export market and the reduction of tariffs will ease the trading process; Hong Kong's potential as a key export market increases the importance of AHKFTA.

Under Negotiation

Negotiations for an EU-ASEAN region-to-region FTA were launched in 2007. Talks were put on hold in 2009 to allow for bilateral FTA negotiations as building blocks towards a region-to-region agreement. ASEAN as a whole represents the EU's third-largest trading partner outside Europe.

Sources: WTO Regional Trade Agreements database, ASEAN, UNCTAD, ASEAN, European Commission, Fitch Solutions

7. Investment Policy

7.1 Foreign Direct Investment

Graph: Cambodia FDI stock
Graph: Cambodia FDI stock
Graph: Cambodia FDI flow
Graph: Cambodia FDI flow

Source: UNCTAD
Date last reviewed: July 30, 2019

7.2 Foreign Direct Investment Policy

  1. Cambodia's Law on Investment (1994) established an open and liberal foreign investment regime. All sectors of the economy are open to foreign investment and 100% foreign ownership is permitted in most sectors. In a few sectors, foreign investment is subject to conditions, local equity participation, or prior authorisation from authorities. The Cambodian government has prioritised foreign investment in the export sector and has a relatively pro-investor policy and legal framework.

  2. Cambodia has no restriction on foreign ownership of companies and boasts a number of incentives such as a corporate tax holiday of up to eight years, a 20% corporate tax rate after the incentive period ends, duty-free imports of capital goods and no restrictions on capital repatriation.

  3. Under the Law on Investment (1994), foreigners are restricted from owning land but are allowed to hold long-term leases for up to 50 years, renewable for another 50 years, as well as freehold ownership of specified condominiums.

  4. The most-popular sectors for foreign investment include garment manufacturing, agriculture, the services industry and tourism (which is one of Cambodia's key growth areas). The country's biggest investors tend to come from within the Asia region, with mainland China, Malaysia, Vietnam and Thailand being major sources of foreign investment, together with the United States.

  5. Cigarette manufacturing, movie production, rice milling, gemstone mining and processing, publishing and printing, radio and television, wood and stone-carving production and silk-weaving are some of the sectors that are subject to conditions such as local equity participation, or prior authorisation from authorities.

  6. FDI plays a critical role in the Cambodian economy. Based on 2017 data (the latest available), FDI stocks are equivalent to 94.1% of the country's GDP, with only three other countries in the region having higher ratios.

Sources: WTO – Trade Policy Review, Council for the Development of Cambodia, United States Department of Commerce, Fitch Solutions

7.3 Free Trade Zones and Investment Incentives

Free Trade Zone/Incentive ProgrammeMain Incentives Available
The Council for the Development of Cambodia (CDC) is the main authority on all strategic and regulatory aspects of stimulating investment in Cambodia. A company registered as a Qualified Investment Project (QIP) is entitled to certain incentives. The CDC requires a QIP to apply annually for a Certificate of Compliance to enable it to continue to receive the investment incentive granted under its investment licence.- An exemption from corporate income tax on profit, which could be for a maximum of up to nine years (provided each of the three three-year increments is approved). - Instead of the exemption from tax on profit, the QIP could elect to benefit from special depreciation allowances.

- Any disputes are handled by the CDC’s Special Economic Zone’s Trouble Shooting Committee (SEZ TSC).
The Cambodia Special Economic Zones Board (SEZs) has approved 25 SEZs, of which nine are in operation. These SEZs are located near the borders of Thailand and Vietnam, as well as in Phnom Penh, Kampot and Sihanoukville, facilitating regional trade. Others are still at different stages of development and some remain undeveloped.

The government's purpose in establishing SEZs is to promote diversification of the industrial base beyond electronics, to establish economic linkages between urban and rural areas and to promote industrial investment outside Phnom Penh. The manufacturing industries attracted into the SEZs include secondary sectors producing garments, shoes, bicycles, food processing, vehicle and motorcycle assembly.

With the exception of the Sihanoukville Port SEZ, which is a public–private joint venture, Cambodia's SEZs are almost entirely privately owned and managed.
- As with QIPs, companies located in SEZs can be exempt from taxes on their profits for a maximum period of nine years. - The importation of equipment and construction materials to be used for infrastructure construction in the zone is permitted and exempt from import duties and other taxes. - The SEZ developer is responsible for the construction of all necessary infrastructure, including roads connecting the zone to the town and other public service infrastructure for the public interest, and shall receive custom duty exemption on the import of machinery and equipment for those purposes. - The SEZ developer may obtain a land concession from the state to establish an SEZ in a border area or isolated region, and may lease this land to the SEZ industry investors.

- Foreign managers, technicians or experts may be employed, provided that the number of foreign staff does not exceed 10% of the total number of its personnel (Article 11, The SEZ Sub-Decree).
Zone investors and developers- SEZ developers, investors or foreign employees have the right to transfer all the income derived from investments and salaries received in the zone to banks located in other countries after the payment of any tax due. - The SEZ developer and investor are entitled to obtain the investment guarantees as stated in Article 8, Article 9 and Article 10 of the Law on Investment in Cambodia and other relevant regulations: non-discriminatory treatment as foreigners, non-nationalisation and no price fixing. - The same incentives on customs duty and tax as other QIPs shall be available. - The SEZ investor entitled to the incentive of zero-rated VAT will record the amount of tax exemption for every import. The record will be disregarded if the production outputs are re-exported. - If the production inputs are imported into the domestic market, the SEZ investor will refund the amount of VAT recorded in comparison with the quantity of export.

- The Zone Developer has a duty to cooperate with the Ministry of Labour and Vocational Training (MLVT) to facilitate the training of Cambodian workers and employees and to promote new knowledge and skills for them with specific and effective programs (Article 12, The SEZ Sub-Decree).

Source: Council for the Development of Cambodia

8. Taxation – 2019

  • Value Added Tax: 10%
  • Corporate Income Tax: 20%

Sources: General Department of Taxation of Ministry of Economy and Finance, Fitch Solutions

8.1 Important Updates to Taxation Information

Cambodia has signed six DTAs, with Singapore, mainland China, Brunei Darussalam, Thailand, Vietnam and Indonesia. The DTAs are for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. Five of the six were in force as of January 1, 2019. Only the agreement with Indonesia, promulgated on December 12, 2018, has (at the time of writing) still to go into effect. Other DTAs are being negotiated. The tax regime in Cambodia is based on self declaration and taxpayers are classified as either small, medium or large.

8.2 Business Taxes

Type of Tax
Tax Rate and Base
Corporate Income Tax- The standard rate of corporate income tax is 20% .

- Small taxpapers pay a progressive rate up to 20%.

- Companies deriving their income from the exploitation of natural resources (such as timber, ore, precious metals/stones), oil or natural gas, or production-sharing contracts relating to these, pay a rate of tax of 30%.

- Insurance companies specifically insuring or reinsuring property or other risks – rather than life assurance/savings products – pay a tax rate of 5% on gross premium income.

- A separate minimum tax is imposed annually at a rate of 1% on annual turnover incluse of all taxes except VAT. If the income tax liability exceeds the amount of the minimum tax, the latter is not payable. Prepayments of tax must be made monthly, equivalent to 1% of monthly turnover inclusive of all taxes except VAT.

- An enterprise planting rice, buying rice or producing rice for export is exempt from the 1% minimum tax.
Capital Gains Tax- Taxed as part of business income; capital gains derived from the disposal of fixed assets are treated as ordinary income and generally taxed at the standard tax on income rate of 20%.
VAT- Taxable supplies attract VAT at either the standard rate of 10% or the zero rate. Exempt supplies not subject to VAT include: medical services and goods; primary financial services; supply of unprocessed agricultural products; supply of electricity; and the exports of goods and services and the international transportation of passengers and goods.
Registration Tax- Levied at a rate of 4% on the transfer of ownership of property or the transfer of occupancy right of land without buildings in the form of a sale, exchange, receiving of a gift or putting capital into a company. It is also levied at 4% on the transfer of ownership of all kinds of means of transportation, such as trucks, vehicles and motorcycles, boats, ferries and ships.
Accommodation Tax- An indirect tax at a rate of 2% levied on accommodation in hotels and guest houses. The person supplying accommodation services is responsible for payment of the tax.
Property Tax- Tax levied annually at a rate of 0.1% applies to immovable property valued in excess of 100 million riels. Property refers to land, houses, buildings and other constructions built on the land. The tax base is the value of the property after deducting CHR100 million, based on market prices set by the property evaluation committee established by the Prakas of the Minister of Economy and Finance.
Property Rental Tax- The tax rate is 10% of the gross rental and should be written in a contract or an agreement with lessees. The tax is collected from proprietors or assignees and applies to buildings such as houses, factories, warehouses, offices, floating houses, ships used as accommodation or miscellaneous business services, and free land (land without buildings) with areas of stone, mine and coal extraction, lakes and salt pan fields.
Withholding Taxes- The rate for non-residents is 14% each on dividend income, royalties, interest and property rental income unless modified by the existence of a treaty: for example, for corporations and individuals from Hong Kong, the rate is 10% for each (15% on dividends if the equity ownership is less than 25%).

Sources: General Department of Taxation of Ministry of Economy and Finance, Fitch Solutions
Date last reviewed: May 1, 2019

9. Foreign Worker Requirements

9.1 Localisation Requirements

The percentage of foreign workers is capped at 10% of all the staff working for an enterprise. The Ministry of Labour may approve a request for an exemption to the 10% limit, particularly if the business is in need of specific skills currently unavailable in Cambodia.

The application for a 'foreign quota approval' from the Ministry of Labour must be submitted between September 1 and November 30 every year if the 10% limit is exceeded.

Failure to comply with the foreign employee quota and work permit requirements could (among other things) result in the imposition of fines of up to USD180.0 and retroactive penalties in the amount of USD100.0 for each year that a foreigner has worked in Cambodia without a valid work permit.

9.2 Obtaining Foreign Worker Permits for Skilled Workers

No foreigner is allowed to work in Cambodia without a valid work permit and an employment card issued by the Ministry of Labour. Under current practice, foreign nationals working or doing business in Cambodia and holding either an e-Visa (also known as a 'business visa' or 'ordinary visa') or a K visa (also known as a 'permanent visa') are required to have a work permit and an employment card.

There are two types of work permits in Cambodia: a temporary work permit (which lasts for the duration of the individual's visa) and a permanent work permit (which is reserved for major investors). A work permit usually costs USD100.

Furthermore, foreign nationals wishing to work in Cambodia must also meet additional conditions, such as not having communicable diseases.

9.3 Visa/Travel Restrictions

Nationals of most countries can be issued with a visa on arrival – except citizens of Brunei Darussalam, Indonesia, Laos, Malaysia, Myanmar, the Philippines, the Seychelles, Singapore, Thailand and Vietnam, who do not require a visa before travelling to Cambodia for a stay of between 14 and 30 days. All foreign nationals are legally required to have a work permit if intending to work in Cambodia.

Sources: Council for the Development of Cambodia, Kingdom of Cambodia Ministry of Foreign Affairs and International Cooperation, Fitch Solutions

10. Risks

10.1 Sovereign Credit Ratings

Rating (Outlook)Rating Date
Moody'sB2 (Stable)
Standard & Poor'sB (Stable)31/10/2011
Fitch RatingsNot ratedN/A

Sources: Moody's, Standard & Poor's, Fitch Ratings

10.2 Competitiveness and Efficiency Indicators

World Ranking
Ease of Doing Business Index
Ease of Paying Taxes Index
Logistics Performance Index
Corruption Perception Index
IMD World CompetitivenessN/AN/AN/A

Sources: World Bank, IMD, Transparency International

10.3 Fitch Solutions Risk Indices

World Ranking
Economic Risk Index RankN/A122/202128/202
Short-Term Economic Risk Score45.649.844.6
Long-Term Economic Risk Score46.747.847.7
Political Risk Index RankN/A123/202123/202
Short-Term Political Risk Score62.162.1
Long-Term Political Risk Score58.357.457.4
Operational Risk Index RankN/A129/201132/201
Operational Risk Score40.842.541.4

Source: Fitch Solutions
Date last reviewed: July 30, 2019

10.4 Fitch Solutions Risk Summary

Cambodia relies on external financing and has a lack of capital markets to underpin the support of businesses. We expect to see 5-6% real GDP growth across 2019 due to rapid investment in the tourism, manufacturing, garment and agricultural sectors over the coming years. Finally, the currency peg with the United States dollar affords some stability in monetary policy, but acts as a restriction in terms of policymakers' ability to respond to economic shocks.

Cambodia has emerged as one of the fastest-growing markets in the East and South East Asia region after decades of internal conflict and international isolation. Investors stand to benefit from the large labour pool, low wages and openness to foreign direct investment, which help to make the country an attractive investment destination. That said, there are considerable risks posed by a lack of adequate education, the underdeveloped transport network, legal risks and limited property rights.

Source: Fitch Solutions
Date last reviewed: July 10, 2019

10.5 Fitch Solutions Political and Economic Risk Indices

Graph: Cambodia short term political risk index
Graph: Cambodia short term political risk index
Graph: Cambodia long term political risk index
Graph: Cambodia long term political risk index
Graph: Cambodia short term economic risk index
Graph: Cambodia short term economic risk index
Graph: Cambodia long term economic risk index
Graph: Cambodia long term economic risk index

100 = Lowest risk, 0 = Highest risk
Source: Fitch Solutions Political and Economic Risk Indices
Date last reviewed: July 30, 2019

10.6 Fitch Solutions Operational Risk Index

Operational RiskLabour Market RiskTrade and Investment RiskLogistics RiskCrime and Security Risk
Cambodia Score41.444.543.737.639.8
East and Southeast Asia Average55.055.956.853.853.6
East and Southeast Asia Position (out of 18)1415141413
Asia Average48.249.748.246.049.1
Asia Position (out of 35)212121
Global Average49.650.349.849.049.2
Global Position (out of 201)132135130138136

100 = Lowest risk, 0 = Highest risk
Source: Fitch Solutions Operational Risk Index

Graph: Cambodia vs global and regional averages
Graph: Cambodia vs global and regional averages
Operational Risk
Labour Market RiskTrade and Investment RiskLogistics RiskCrime and Security Risk
Hong Kong80.772.3
South Korea71.865.9
Mainland China56.353.8
North Korea31.345.8
Regional Averages55.055.956.753.853.6
Emerging Markets Averages46.948.645.447.446.1
Global Markets Averages49.650.349.8

100 = Lowest risk, 0 = Highest risk
Source: Fitch Solutions Operational Risk Index
Date last reviewed: July 30, 2019

11. Hong Kong Connection

11.1 Hong Kong’s Trade with Cambodia

Graph: Major export commodities to Cambodia (2018)
Graph: Major export commodities to Cambodia (2018)
Graph: Major import commodities from Cambodia (2018)
Graph: Major import commodities from Cambodia (2018)

Note: Graph shows the main Hong Kong exports to/imports from Cambodia (by consignment)
Date last reviewed: July 30, 2019

Graph: Merchandise exports to Cambodia
Graph: Merchandise exports to Cambodia
Graph: Merchandise imports from Cambodia
Graph: Merchandise imports from Cambodia

Note: Graph shows Hong Kong exports to/imports from Cambodia (by consignment)
Exchange rate HK$/US$, average
7.75 (2014)
7.75 (2015)
7.76 (2016)
7.79 (2017)
7.83 (2018)
Sources: Hong Kong Census and Statistics Department, Fitch Solutions
Date last reviewed: July 30, 2019

Growth rate (%)
Number of Cambodian residents visiting Hong Kong40,13895.9

Sources: Hong Kong Tourism Board, United Nations Population Division – Department of Economic and Social Affairs

Growth rate (%)
Number of Asia Pacific residents visiting Hong Kong61,044
 2017Growth rate (%)
Number of East Asian citizens residing in Hong Kong2,748,1901.6

Sources: Hong Kong Tourism Board, Fitch Solutions
Date last reviewed: July 30, 2019

11.2 Commercial Presence in Hong Kong

Growth rate (%)
Number of Cambodian companies in Hong KongN/AN/A
- Regional headquarters
- Regional offices
- Local offices

11.3 Treaties and Agreements between Hong Kong and Cambodia

Mainland China and Cambodia signed an Agreement for the Avoidance of Double Taxation on October 13, 2016, and Investment Promotion and Protection Agreements which came into effect on February 12, 2000.

Hong Kong and ASEAN signed an FTA and an investment agreement on November 12, 2017.

Sources: Hong Kong Trade and Industry Department, State Administration of Taxation of the People's Republic of China

11.4 Chamber of Commerce or Related Organisations

Hong Kong-ASEAN Economic Cooperation Foundation Limited
The main activities of HKAECF are to contribute to the fostering, promoting and facilitating of economic cooperation between Hong Kong and the 10 member countries of ASEAN ('1+10'), and between the ASEAN region and mainland China ('10+1') with Hong Kong serving as a high value-adding and facilitating key international hub, bridge, connector, promotor and investor.

Address: Hong Kong-ASEAN Economic Cooperation Foundation Limited, G.P.O. Box 12779, Hong Kong
Email: secretariat@hk-asean.com

Source: Hong Kong-ASEAN Economic Cooperation Foundation

Hong Kong Business Association of Cambodia
Email: info@hkbac.org
Tel: (855) 12 888 855
Website: http://www.hkbac.org
Please click to view more information.

Source: Federation of Hong Kong Business Associations Worldwide

Royal Consulate General of Cambodia in Hong Kong SAR and Macao SAR
Address: Unit 1218, 12/F, Star House, 3 Salisbury Road, Tsim Sha Tsui, Kowloon, Hong Kong
Email: cacghk@netvigator.com
Tel: (852) 2546 0718
Fax: (852) 2803 0570

Source: Visa on Demand

11.5 Visa Requirements for Hong Kong Residents

Hong Kong SAR passport holders need a visa to visit Cambodia.

Source: Visa on Demand
Date last reviewed: July 30, 2019

Content provided by Picture: Fitch Solutions – BMI Research
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