Why Invest in Cambodia?

Here are some reasons why you should consider investing in a property at Cambodia:

 

  1.  Macroeconomic Stability

 

Today Cambodia is one of the fast growing economies among other countries in ASEAN region with significant investment opportunities for both local and international investors.

 

Cambodia’s GDP has been growing at an average of 7.7% for the last 20 years. The World Bank calls Cambodia, the sixth fastest growing economy in the world for the last 20 years. The inflation rate is less than 5%. The exchange rate has been stable for the last 20 years. Their debt-to-GDP ratio is below 30% with small budget deficit.

 

Cambodia is expected to grow at an average of 7% to 7.5% for the next five to six years.

 

On the performance of the Cambodia real estate in 2014 has played very important role to generate revenue to the country.

The property market price in Phnom Penh for the year of 2014 approximately increase 25% for the commercial area and 40% for residential area compared to 2013 as well as good occupancies rate of office rental about 95%, retail approximate 79% with total supply of 370,000sqm, apartments with occupancies rate of 95% with total supply about 4,500 units, for sale result of condominium approximate 80% with total supply around 12,000 units, and Borey’s sale result approximate 77% with total supply approximate 42,000 units.

  1. Political Stability

Among countries within Indo China, Cambodia has been enjoying great political stability. It’s important for investors to invest in a country that is politically stable. They had a little hiccup in the elections of 2013 — the opposition boycotted the national assembly for 10 months — but that’s all sorted now. Today, politically, Cambodia is very stable.

 

  1. Pro-business Government

The private sector is considered to be the engine of economic growth. They have created “technical working groups,” co-chaired by the private sector and ministers in the Cambodian government, working on infrastructure, banking, tourism, culture, etc. These groups work together on a regular basis to resolve any problems that the private sector might have. Once a year, the Prime Minister invites the private sector — 300 representatives, plus the diplomatic corps, the ADB [Asian Development Bank], World Bank, IMF [International Monetary Fund] — to a “government private sector forum,” which they can raise any problem with the prime minister.

 

  1. Competitive Investment Incentives

Cambodia corporate income tax is only 20% and there is no exchange control. There’s no restriction on any sector because there is no alien business law. Every economic sector is open to a foreign investor. Their investment laws provide very generous incentives to investors and Foreign investors and local investors are treated equally in Cambodia.

 

  1. Location, Location, Location

 

Cambodia is centrally located within ASEAN. Considering Cambodia, Vietnam and Thailand, Cambodia is in the middle. As such, in terms of shipping or for major transportation, Cambodia can be a part of regional supply chain.

 

  1. Real Estate Investment

 

In comparison to neighboring countries, Cambodia is a good place for investors with suitable property price which provide high return of investment.   There has been an increasing number of condominiums is year on year,  Developers have been coming to invest in Cambodia especially in real estate industry, and many projects condo is booming. When looking at the gross rental yields for these same Asian markets, Cambodia’s investment advantage becomes clear. It currently gains return investment advantage about 6% to 8% per year on annual rental, and about 40% on selling.

 

Demand for condominiums by locals and a foreigner is likely to continue to grow in the coming years. In terms of modern developments, the residential property market here is still in its infancy compared with other Asian markets like Thailand and Malaysia. The market’s lack of maturity offers unique opportunities for investors.

  • New Property Launches

 

  1.   The Peak Cambodia by Oxley Holdings
  2.   The Gateway by Tiong Aik – TACC (C.R.) Ltd

 

(Reference: Knowledge@Wharton, Will Cambodia Become The Gateway to ASEAN’s 600 m customers?)