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INVESTMENT IN CAMBODIA Sector: Jewelry Arranged by Mrs. Tui Pakarat-Rutten Vice President of TBCC H/P: +66 81 839 2452 /+855 16 912 832

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Presentation on theme: "INVESTMENT IN CAMBODIA Sector: Jewelry Arranged by Mrs. Tui Pakarat-Rutten Vice President of TBCC H/P: +66 81 839 2452 /+855 16 912 832"— Presentation transcript:

1 INVESTMENT IN CAMBODIA Sector: Jewelry Arranged by Mrs. Tui Pakarat-Rutten Vice President of TBCC H/P: /

2 Key Indicators  Land area : 181,035 sq.km.  Population: 15 Million  Labor force (young) : 7,053,398 (Female: 3,608,345)  Population growth rate : 1.54%  GDP Growth (2013e) : 7.3%  GDP per capita (2013e) : $1,080  Inflation (2013e) : 4%  Exchange rate: USD 1= 4,000 Riels

3 Real GDP Growth

4 4 Economic Transformation 2012 marked 20 years of economic development in Cambodia, since the formation of the Royal Government of Cambodia in 1993; a transformation from planned to market economy. GDP grew from 2.5 billion in 1993 to 12.9 billion in 2011 and is expected to reach 14.3 billion in Per capita GDP grew from $229 to $909 in 2011 and is expected to reach $987 in Population increased from 10.8 million to 14.5 million in Inflation dropped from 150% in 1993 to 7.4% during ; to 0.7% during , then to 8% during The share of industry increased from 12.6% to 23.1%. The share of agriculture decreased from 45.3% to 33.6% The share of services reduced from 39.4% to 37.7%.

5 5 Economic Transformation Government revenue increased from 290 billion Riels ($123 million) or 7.6% of GDP to 7,604 billion Riels ($2 billion) 13.5% of GDP. The number of people living under poverty lines fell from 50% in mid-1990s to 25% at present. Stock of public debt and publicly guaranteed debt in nominal terms is 28% of GDP end-2010, of which 49% is held by multilateral agencies and 51% - by bilateral creditors (of which 24% is non-rescheduled debt with US and Russia). Debt stock in NPV is 20% (the benchmark of 40%) Now Cambodia is a small, albeit open economy with liberal market policies. Cambodia is located among the highly growing economies of South-East Asia.

6 ONE STOP SERVICE OPEN DOOR POLICY 6

7 H.E. Mr. Chhieng Yanara Minister attached to the Prime Minister Secretary General CRDB H.E. Mr. Keat Chhon, Permanent Deputy Prime Minister 1 st Vice Chairman H.E. Mr. Sok Chenda Sophea Minister attached to the Prime Minister Secretary General CIB Trouble Shooting Committee Samdech Akka Moha Sena Padei Techo HUN SEN Prime Minister of the Kingdom of Cambodia Chairman Council for the Development of Cambodia (CDC) H.E. Mr. Chea Vuthy Deputy Secretary General H.E. Mr. Sok Chenda Sophea Minister attached to the Prime Minister Secretary General CSEZB LCT. Heng Sokun Deputy Secretary General H.E. Mr. Sok Chenda Sophea Minister attached to the Prime Minister Secretary General H.E. Mr. Sun Chanthol, Senior Minister, Minister of Commerce Vice Chairman H.E. Mr. Rith Vuthy Deputy Secretary General H.E. Mr. Chea Vuthy Deputy Secretary General SEZ FDI ODA H.E. Mr. Heng Soknang Deputy Secretary General

8  Information & Application  Approval  Customs Duty & Tax Exemption  Visa & Work Permit  Company Registration A ONE STOP SERVICE 8

9 Investment Approval Investment application CDC issues a Conditional Registration Certificate to the Applicant  Company Registration / Ministry of Commerce  Relevant licenses, as appropriate / Ministry of Industry and Energy  Review and approval of construction plan / local authorities-  Ministry of Land Management, Urban Planning and Construction.  Initial environmental impact assessment / Ministry of Environment  Tax Department Registration / Ministry of Economy and Finance CDC issues a Final Registration Certificate to the Applicant 3 working days 28 working days

10 Private Sector Development Strategy  Investment Climate: Law on Investment – August 1994 Amendment of Law on Investment (2003) and its sub-decree 111 ANKr.BK (27 September 2005) Automatic approval - One Stop Service  Bilateral Investment Treaty (BIT)  Trade Facilitation : Single administrative document, Single Window, Risk Management (Sihanouvillle Port) Trade Sectoral Wide Approach (Trade SWAp)  Government-Private Sector Forum: Participatory approach  Special Economic Zones (SEZ)

11 Law on Investment Investment Guarantee Equal treatment of all investors No requirement of local equity participation No price controls on products or services No restriction on forex convertibility Free remittance of foreign currencies abroad Investment Incentives 20% Corporate Tax Tax holidays: Trigger period +3years+n; 6y

12 Bilateral Investment Treaties (BITs) 1.Australia 2.Austria 3.China 4.Croatia 5.Cuba 6.Czech 7.France 8.Germany 9.Indonesia 10.Japan (14/06/ 2007) 11.Kuwait 12.Lao PDR 13. Malaysia 14. Netherlands 15. N. Korea 16. OPEC 17. Pakistan 18. Philippine 19. ROK 20. Singapore 21. Switzerland 22. Thailand 23. USA (OPIC) 24. Vietnam 1.Myanmar 2.Ukraine 3.Arab Rep of Egypt 4.Russia 5.Libya 6.Great Britain & Northern Ireland 7.Algeria 8.Bulgaria 9.USA 10.Qatar 11.Hungary 12.Malta 13.Bangladesh 14.Iran 15.Turkey 16.Belgium-Luxembourg Economic Union Signed BITsUnder negotiation

13 Interaction with the Private Sector: through the Government Private Sector Forum, and the Steering Committee on Private Sector Development and its sub-Steering Committees, the RGC is in regular dialogue with the private sector, and seeks to address their concerns. 13 Mechanism of the Government-Private Sector Forum G–PSF Bi-annual meetings Law, Tax, and Governance WG Tourism WG Banking and Fin. Services WG Energy and Infrastructure WG Industrial Relations WG Manufacturing and SMEs WG Agriculture and Agro- Industries WG Trade Facilitation and Export Processing WG Rice Export WG

14 in addition to those laws required by its accession to WTO, Cambodia has adopted laws covering topic such as : Commercial enterprise Insolvency Secured transactions Commercial Arbitration Transportation Civil Aviation Law in progress: Commercial Contracts Competition Law on the Establishment of the Commercial Court Law on Anti-dumping, Countervailing Duty and Safeguard Law on Business Association, Cooperatives Law on Competition (Final Draft) Law on Union Regulations on Sanitary and Phyto- sanitary Measures (SPS) Laws and Regulation

15 Bilateral agreement on the promotion and protection of investments between the Kingdom of Cambodia and other countries 1.Australia 2.Austria 3.China 4.Croatia 5.Cuba 6.Czech 7.France 8.Germany 9.Indonesia 10.Japan 11.Kuwait 12.Lao PDR 13. Malaysia 14. Netherlands 15.OPEC 16. Pakistan 17. Philippine 18. ROK 19. Singapore 20. Switzerland 21. Thailand 22. USA (OPIC) 23. Vietnam

16 Encouraged Investment Activities  Agriculture and agro-industry  Transport and telecommunications  Energy and electricity  Labor-intensive industries, processing and manufacturing;  Tourism  Human resource development  Oil & Gas, Mining

17 Approved Investments by Country/Region ( )

18 Approved Investments by Sector 1994 –2013

19 Investments in Cambodia Rank $11,420,127183$6,309,435,594$3,029,497,634$7,984,908,645$2,965,537,652$3,314,528,763 Country% % % % % % 1China39.45Cambodia60.81Korea35.10U.K30.93Cambodia42.08 Cambodia Cambodia36.73China14.93China28.73Cambodia29.76China20.69 China Korea10.89Vietnam5.58Cambodia14.91China22.05Korea9.89 Vietnam USA5.59Singapore4.81Malaysia8.53Vietnam8.65Japan9.15 Thailand Israel2.63Russia3.84Vietnam5.23Malaysia3.03Malaysia6.04 Korea Russia0.92Thailand3.53Portugal1.66Korea2.10Thailand4.53 Japan U.K0.59Korea2.89Australia1.65U.S.A1.78Vietnam2.89 Malaysia Austria0.54India1.90Singapore1.02Japan0.83Singapore2.59 Singapore Vietnam0.51Malaysia1.19Denmark0.97Australia0.31U.K0.51 UK France 0.50 Japan 0.20 Japan 0.86 Singapore 0.20U.S.A0.42 France Others 1.28Others0.32Others1.35Others0.35Others1.21 Others 0.96

20 Infrastructure: A definite prospect  Priority for infrastructure  Infrastructure rehabilitation  Multilateral aid availability  Decentralization  Regional opportunities  ASEAN & GMS integration  Private Participation in Infrastructure (PPI): BOT, BOO, etc …

21 Investment in Development & Maintenance of Physical Infrastructure (for vibrant, safe and efficient logistics system)  Transport and Urban Infrastructure (roads, ports, railways, airport services, etc.): for domestic integration and regional connectivity  Irrigation System  Electrical Power  Information and Communication Technology

22 Agro-business 1 ) Production, Processing and Commercialization of:  Rice, Corn, Cassava, Sugarcane, Cashew nut, Pepper and others 2) Livestock Farming and Aquaculture  Animal breeding  Animal feed production  Freshwater and marine-based natural fisheries  Freshwater and marine aquaculture  Processing and trading

23 Tourism  World Heritage Monuments  Open Sky Policy to Siem Reap  Natural beauty - Beach - Islands  Ability to attract “add-on” trips  Novelty value Dolphins in Mekong River-Cambodia

24 Visitors to Cambodia Thousand (000) Vision 2020: Visitor arrival from 2010 – 2020 YEAR Visitor Arrivals2,508,2893,584,3075,100,0007,000,000

25 Investment Opportunities  Phnom Penh o International Convention Center o High-end hotel (Four Seasons, Hyatt, etc…) at the moment there are only Intercontinental Hotel, Sofitel and Raffles with approximately 500 rooms.  Siemreap o International Convention Center o High-end hotel (Four Seasons, Sheraton, and Marriott, etc…) at the moment there are only Raffles, Hyatt, Le Meridien, Sofitel, Aman resorts and Orient Express, with approximately 800 rooms. o Amusement park / recreational activities o Golf course (there are three existing golf courses)  Sihanoukville o High-end hotel (Four Seasons, Hyatt, etc…) o Golf Course

26 Manufacturing & Export  Competitive labor cost  Tax incentives  Market access  Asean Economic Community 2015

27 MFN/GSP Market Access  Australia  Austria  Belarus  Belgium  Bulgaria  Canada  China  Czech Republic  Denmark  Finland  Poland  Portugal  ROK  Russian Federation  Slovakia  Spain  Sweden  Switzerland  UK  USA  EBA (everything but arms initiative for LDCs)  France  Germany  Hungary  Ireland  Italy  Luxemburg  Japan  Netherlands  New Zealand  Norway … and the ASEAN integration System Of Preferences (AISP) from the ASEAN 6

28 JOININGWTO JOININGASEAN Everything But Arms (EBA) Cambodia has embraced the globalization process as part of its outward looking economic development strategy …. ASEAN Economic Community

29 Reasons to invest in Cambodia  Open economy  Sound Macroeconomic Environment  Competitive Investment Incentives  One Stop Service – Fast-Track Investment Approval Process (28 days)  Low Labor Cost  Strategic Location  Preferential Trading Status  Access to ASEAN and World Markets

30 . Phnom Penh The Philippines Singapore Indonesia Myanmar Southern China Manila Bangkok Kunming Yangon Brunei Jakarta Begawan Hanoi Laos o Vientiane CAMBODIA Malaysia Kuala Lumpur Thailand Vietnam

31 Invest in Cambodia and you have 15 million consumers Invest in Cambodia and you have 15 million consumers Invest in Cambodia and you have 325 million consumers virtually at your doorstep Invest in Cambodia and you have 325 million consumers virtually at your doorstep Invest in Cambodia and you have 600 million consumers at your doorstep

32 General Tariff Rates Applicable RateMajor Commodities 0%Pharmaceutical products (HS Code 30), Printed books (HS Code 4901), Ores, slag and ash (HS Code26), Petroleum gases and other gaseous hydrocarbons (HS Code 2711) 7%Edible fruit and nuts (HS Code 8), Animal or vegetable fats and oil and their cleavage products (HS code 15), Sugar and sugar confectionery (HS Code 17), Raw hides and skins (other than fur skins) and leather (HS Code 41), Articles of jewelry and parts thereof, of precious metal or of metal clad with precious metal (HS Code 7113), Bicycles and other cycles (including delivery tricycles), not motorized (HS Code 8712), Musical instruments (HS Code 92) 15%Alcohol (other than beer) (HS Code 22), Motorcycle (HS Code 78711), Clocks and watches and parts of thereof (HS Code 91) 35%Manufactures if straw, of esparto or of other planting materials (HS Code 46), Electro-mechanical domestic appliances (HS Code 8509), Motor cars and other motor vehicles principally designed for the transport of persons (HS Code 8703) 32

33 Jewelry Import Duty Import Duty is 7% On CIF. Import VAT is 10% on CIF + Duty. 33

34 Thailand Export to Cambodia Goods Value – Million Dollars est.2015 est. Jewelry Goods Growth Rate - % est.2015 est. Jewelry Goods Proportion - % est.2015 est. Jewelry

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