The Law on Investment in Cambodia, promulgated on October 15, 2021, aims to create an open and transparent legal framework to attract and promote quality, efficient, and effective investment in the Kingdom of Cambodia. The law replaces the previous Law on Investment of 1993, as revised in 2003, and is designed to support socio-economic development by increasing Cambodia’s competitiveness, modernizing local industries, and establishing an investment incentive regime.
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The new Law on Investment has several key objectives. Firstly, it seeks to increase Cambodia’s competitiveness and make its economic structure more diversified and resilient to crises. This includes strengthening connectivity with regional and global supply chains and promoting capital inflows, technology transfer, and knowledge sharing. The law also aims to modernize and increase the productivity of local industries.
Transparency, predictability, non-discrimination, and competitiveness are emphasized in the investment incentive regime established by the law. The goal is to support socio-economic development policies and create an environment that encourages investment.
To facilitate the implementation of the Law on Investment, Sub-Decree 139 was introduced. This sub-decree provides detailed procedures for the registration of investment projects and clarifies the eligibility criteria for qualified investment projects (QIPs). It also introduces a negative list that outlines projects ineligible for QIP registration.
The Law on Investment ensures that foreign investors are not treated in a discriminatory manner, except in relation to land ownership as specified in the Land Law. The law also prohibits nationalization policies that would adversely affect private properties of investors in Cambodia.
Efforts to attract foreign direct investment (FDI) in Cambodia have been ongoing, and the Law on Investment plays a crucial role in encouraging investments. The country has seen significant growth in FDI inflows, particularly after joining the World Trade Organization (WTO) in 2004. The law allows investments in various sectors, with the exception of land ownership.
The Cambodian government, through the Council for the Development of Cambodia (CDC), has been actively involved in creating laws and regulations to govern FDI and promote investments in the country. The aim is to encourage economic growth and development while ensuring a favorable investment environment.
The Law on Investment in Cambodia reflects the government’s commitment to attracting and promoting investment, fostering economic development, and creating a transparent and competitive business environment. It serves as a foundation for both local and foreign investors to explore opportunities and contribute to Cambodia’s growing economy.
Source:The Council for the Development of Cambodia (CDC)
Photo by: Samdech Thipadei Hun Manet, Prime Minister of Cambodia.
