Where to invest in Cambodia in 2023?

PHNOM PENH: Garment manufacturing, tourism, agriculture, and construction are considered the main engines of growth. The priorities of middle-class consumers, such as health and education are creating opportunities for investors. Technology, COVID-19, and economic development have impacted Cambodia, creating new trends and niche opportunities to address the growing needs of the country in the face of 21st-century challenges.

The Law on Investment (LOI), promulgated in October 2021, reflects these trends and identifies more than 18 sectors and activities where investment incentives apply. These incentives include income tax exemptions, deductions of capital expenditure through a special depreciation mechanism, and
exemptions for export customs duties. Eligible can also receive an exemption from customs duties, special tax, and value-added tax for the import of construction material, construction equipment, production inputs, and production equipment, among other items.

While the Law on Investment, which came into effect in October 2021, places priority on more than 18 key sectors, the following sectors are particularly interesting for investors:


Favorable location: most of the population is concentrated in lowlands and hills where freshwater (from rivers, lakes, and underground sources) is abundant.

Weather: thanks to heavy rainfall during the monsoon season (May to October), Cambodia enjoys favorable climate conditions, with temperatures remaining high during the period.

Cambodian agriculture is experiencing rapid transformation due to a combination of increased yields, more productive use of labor due to mechanization, and the expansion of farmland.


Cambodia has a growing number of automotive startups and suppliers, with untapped linkages to the regional and global value chains.

According to the data from CDC, investment capital in automotive assembly and components manufacturing from 2020 to 2022 was USD 1.38 billion.

Automotive components manufacturers and vehicle assemblers have been growing in Cambodia.

Japan, Korea, and China are major investors, while the main export markets include Thailand and Japan.

The Royal Government has adopted the Cambodia Automotive and Electronics Sectors Development Roadmap in 2022, an indicator of the importance of the sector for further economic growth.

According to calculations based on data from GDCE, from 2020 to 2022, exports of automotive components were USD 484.78 million and the compound annual growth rate in exports of automotive components was 10 percent.

Cambodia has a thriving domestic motorcycle market, attracting both assembly and component manufacturing.

Electrics and Electronics

Electronics is a fast-growing sector in Cambodia with Japanese and Chinese firms as major

Cambodia's electrical and electronics (E&E) exports have significantly increased in recent years,
especially to the United States in 2021, when investors steered sourcing orders to Cambodia
following supply chain disruptions. The positive trend will likely last.

According to the data from CDC, investment capital in electrics and electronics from 2020
to 2022 was USD 264.62 million.

From wire manufacturers to PCB assemblers, Cambodia is home to some of Asia's top
electronic manufacturers. According to the calculation based on data from GDCE, annual exports in 2022 were USD 1,970.20 million (up 22 percent from 2021).

Based on the same calculation, the compound annual growth rate was 34 percent, from 2020 to 2022.

In 2022, the top 5 export markets were the United States, , China, Japan, and South Korea.
Industrial development in Cambodia offers opportunities for firms operating in neighboring
countries such as Thailand and Vietnam to form a regional supply chain model to benefit from
the comparative advantages of both nations.

Bike and Parts

According to data from MOC, Cambodia now ranks first in ASEAN and fifth globally for exports
of bikes and bike parts. More than 1.5 million bicycles are exported from Special Economic
Zones each year.

According to a calculation based on data from GDCE, exports in 2022 reached around USD 1
billion (an increase of 54 percent from 2021).

In 2022, Cambodia has become the major exporter to Europe, the destination of more than two-thirds
of exports.

Textile and Apparel

A major powerhouse, Cambodia's textile and apparel sector has been serving the global market and growing at a solid pace over the years. While diversification of the economy takes place, the garment sector will remain the largest employer for a while. Cambodia is a major garment producer in the world.

In 2022, according to GDCE, the total exports of garment and footwear were approximately USD 13 billion and the sector accounted for 63 percent of Cambodia's export earnings.

In 2022, Cambodia had a total of 1,968 large-scale factories, and two-thirds of their production are exported to foreign markets.

Moving from a labor-intensive model to a high-value and skills-intensive garment production model is key for the sector to develop in the future.

Furniture and Plywood

The furniture and plywood industry is one of Cambodia's rapidly rising sectors and is attracting major investments and increased export potential.

According to CDC, Cambodia exports furniture and plywood products to many destinations, including ASEAN, the United States, and the United Kingdom, with a total value of approximately USD 99 million in 2019 and approximately USD 147 million in 2020.

Total investment capital in furniture and plywood is USD 332 million. The sector employs currently more than 9,000 local workers.


Agricultural development has benefited from Cambodia's geographical location. The Cambodia
Industrial Development Policy 2015-2025, Cambodia's Trade Integration Strategy 2019-2023, and Agriculture Development Strategy 2019-2023 recognize agriculture as a key enabler to drive Cambodia's economic growth, job creation, and social advancement.

This can be achieved by focusing on moving up the agricultural value chain by producing agricultural commodities with added value, research and development, capacity-building, product diversification, targeting new export destinations, and improving product quality.

For Cambodia's agriculture sector, there is untapped potential in some niche markets such as organic products or sustainable agriculture.

Cambodia's agriculture sector also offers market opportunities for agricultural inputs and machinery; investment opportunities in mid-downstream supply chain activities; and opportunities in contract

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