Cambodia is one of the most open economies to foreign investment in the developing world. Based on The Index of Economic Freedom from the Heritage Foundation in the United States, it concluded Cambodia ranked 102nd among 179 countries in 2012. Cambodia is well ahead of several neighbours (Indonesia, 115th, Vietnam, 136th, and Lao People’s Democratic Republic, 150th). The Index reflects that Cambodia is in the favour and considerable interest to potential investors: the fiscal burden, regulatory barriers, labour market restrictions, natural resources and trade policy. The economy of Cambodia has been experienced a strong growth through the last decade. Good reasons why we should invest in Cambodia.
1. Very competitive investment incentives
Many foreign investors are concerned with the risk and returns when they are about to invest in a least develop country (LDC). It can’t denied that investing in LDC can be a complicated business with many uncertainty and much inconvenience issues such as weak transportation, communication barrier, but an LDC is not always riskier than other location and frequently more profitable. With the new investment law of Cambodia, it offers the best business incentive package in Southeast Asia; making the Kingdom’s outward-looking economy a very attractive place to invest. The following are the highlights of the new law:
- 9% corporate/income tax
- Tax holidays of up to 3 years
- No withholding tax on dividends
- 1% of repatriation profits
- No nationalization and price controls
- No discrimination between foreign and local investors
- Land leases of up to 70 years
2. Ample supply of labour and natural resources
Cambodia has its potential in the market due to the population in Cambodia. It has approximately 13 million of people of which 51% are in the “working age” group. This show that the people have the spending power and the market has room to growth. Besides, the labour force is hard working and motivated. As compared to other Asian countries, the labour costs in Cambodia are low and the natural resources especially oil and minerals are only now being discovered.
3. Low cost, high return
In Cambodia, it is common to trade in USD. If you had been travelled to Cambodia, you can see people in the market are usually trade in USD. In other words, our products costs are in Ringgit Malaysia, where we are trading in USD. Thus, there will be a favourable profit. On the other hands, investors can benefit from very low tariffs on most goods traded in Cambodia.
4. Low barrier to entry into the market
Cambodia has low barrier to entry into the market for investors. Why say so? As the government of Cambodia is seeking for the foreign investors to invest in the market, many of the regulations such as licensing requirements will be loosen. Besides, many tariff as such tax exemption will be given to the foreign investor. According to ASEAN Free Trade Area is aiming to completely eliminate all tariffs by 2018. Therefore, grab your opportunity to invest your business in Cambodia while there are still not many competitors yet in the market.
5. Repeating of our previous success experience
The development path of a country is always in a similar trend. Cambodia is a newly developed country and current, the total business circumstances and conditions are similar as the early 80’ of Malaysia, a period when people have great confidence towards their national domestic economic and government performance. Thus, this is the time when people are slowly stepping into basic standard living environment, and thus, purchasing of normal goods and services, basic make up products, pursuing basic language and computer skill training program are a necessary for Cambodians now.
Malaysia SMEs have great experience in these industries and our products have proved its quality and pricing flexibility long ago. Thus, by going to Cambodia, we are just repeating again of what we have done and success before, and duplicating our previous glory which the tactics are already well known by us.
Myanmar is the largest country on mainland South-East Asia with a total land area of 676,577 sq.km. The population is around 56 milion. The people in Myanmar enjoys religious tolerance and has full freedom of worship for followers of different religious:
- Buddhism 89.9%
- Christians 5.6%
- Islam 3.8%
- Hinduism 0.5%
- Traditional animistic beliefs 0.2%
Myanmar has abundant natural resources, talented workforce and adequate infrastructure to set up new business ventures by local own, joint venture or 100% foreign owned businesses.
The followings are the potential investment areas:
- Labor intensive industries
- Food processing industries
- Supporting industries for the heavy machineries
- Assembly firms
- Electronic and Electronic components manufacturing
- Control farming
- Establishment of Seed firms
- Oil and Gas exploration
- Research and Development firms
- Exemption or relief from income tax (re-invested) within one year
- Accelerated depreciation rates
- 50% relief from income tax from export profits
- Right to pay income tax – Right to deduct
- Right to deduct R&D expenditure
- Right to carry forward and set off losses
- Exemption or relief from customs duty or other internal tax
- Exemption or relief on customs duty or other internal tax (raw material)
- Myanmar has abundant natural resources and there are lots of opportunities in the agriculture sector and trading can be done in rice, pulses and beans, maize, sesamum, rubber, coffee, tea, sugarcane, jute, fruits, veggies etc.
- Another sector is livestock and fisheries as Myanmar is endowed with rich and varied marine and inland fishery resources.
- Myanmar has a long coastline which provides a very good base for the development of shrimp prawn culture.
- Another potential is the forestry sector. Myanmar is indeed very rich in forest resources and Myanmar teak is highly reputable in the world market and enjoys the largest share of the world teak trade.
- Another sector is the mining sector and Myanmar ranks high among the Asian countries in terms of mineral potential. Myanmar gems-rubies and jade are highly popular in the world.
- Reverting to energy, oil and gas exploration under the energy sector is the highest in the foreign investment in Myanmar.
- Another booming sector is the tourism sector. Myanmar is a cultural destination with its rich cultural heritage and is also blessed with natural environment like snow-capped mountains, beautiful lakes, long rivers, lush tropical forests, unspoilt beaches and archipelagos.
- Myanmar is a new and emerging tourists destination in SE Asia. There are over 100 national races with their colourful costumes and customs, traditional arts and crafts all make up Myanmar the most exotic and fascinating destination in Asia.
- You will find Myanmar a beautiful and peaceful place with the most hospitable people in the world.
Vietnam is emerging as a potential market for investment. Incentive policies and laws of Vietnam, as well as great natural resources and huge population of 90 million people of this country, have created an outstanding attraction in South East Asia.
Vietnam is currently ranked by World Bank on the 90th position for ease of doing business and is one of the fastest-growing economies in South East Asia. Since 2015, it has become easier for foreigners to register a company in most industries. You only require one shareholder, either a corporate entity or an individual with any nationality and residency, to incorporate a company.
There are three business structures available for those who want to start a business in Vietnam:
- A 100% foreign-owned sole proprietorship or partnership
- A joint venture enterprise
- A business cooperative that is owned and controlled by the people who use its services
The followings are the potential investment areas:
- Home furniture making and remodelling
- Garment and textile items
- Construction and building components
- Detergents and cosmetics
- Agricultural items processing
- Real estate
- Restaurant and bar
- Used car seller
Vietnam government encourages foreign investment in certain sectors, including:
- The production of items for export
- Animal husbandry, farming and the processing of agricultural, forest and aquaculture products
- The utilisation of high technology and modern manufacturing techniques
- The protection of ecological environments
- Research and development
- Labour intensive activities
- The processing of raw materials
- The efficient utilisation of natural resources
- Construction of infrastructure facilities and important industrial production establishments
- Investment in mountainous and remote regions
- Investment in regions with difficult economic and social conditions