2013 Investment Climate Statement
Bureau of Economic and Business Affairs
March 2013
Report

Openness to, and Restrictions upon, Foreign Investment

Cambodia, a developing country, began the transformation from a command economy to the free market in the late 1980s. It is now integrating into the regional and world trading framework. Cambodia joined the Association of Southeast Asian Nations (ASEAN) in 1999 and served as ASEAN chair in 2012. In 2001, the country joined the World Customs Organization and in September 2004, it became a member of the World Trade Organization (WTO).

Cambodia’s 1994 Law on Investment established an open and liberal foreign investment regime. All sectors of the economy are open to foreign investment and 100 percent foreign ownership is permitted in most sectors. In a few sectors, foreign investment is subject to conditions, local equity participation, or prior authorization from authorities. These include cigarette manufacturing, movie production, rice milling, gemstone mining and processing, publishing and printing, radio and television, wood and stone carving production, and silk weaving. There is little or no discrimination against foreign investors either at the time of initial investment or after investment. Some foreign businesses, however, have reported that they are at a disadvantage vis-a-vis Cambodian or other foreign rivals, who engage in acts of corruption or tax evasion or take advantage of Cambodia’s poor enforcement of laws and regulations.

Rankings

The following table lists Cambodia’s most recent rankings by organizations that monitor economies’ economic freedom, business regulations, and perceived level of corruption.

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Measure

Year

Index/Ranking

TI Corruption Index

2012

157/174

Heritage Economic Freedom

2012

57.6/179

World Bank Doing Business

2013

133/185

Millennium Challenge Corporation (MCC) Gov’t Effectiveness

FY2013

0.13/64 percent

MCC Rule of Law

FY2013

-0.12/40 percent

MCC Control of Corruption

FY2013

-0.23/35 percent

MCC Fiscal Policy

FY2013

-3.7/45 percent

MCC Trade Policy

FY2013

70.2/58 percent

MCC Regulatory Quality

FY2013

0.31/73 percent

MCC Business Start-Up

FY2013

0.764/22 percent

MCC Land Rights Access

FY2013

0.61/59 percent

MCC Natural Resource Protection

FY2013

100/100 percent


Conversion and Transfer Policies

There are no restrictions on the conversion of capital for investors. The Foreign Exchange Law allows the National Bank of Cambodia (NBC) to implement exchange controls in the event of a foreign exchange crisis. In the event of such a crisis, the NBC may issue regulations to be implemented for a maximum period of three months, imposing certain temporary restrictions on the activity of authorized intermediaries, or their foreign exchange position, or any loans in domestic currency extended to nonresidents. The Department of State is not aware of any cases in which investors have encountered obstacles in converting local to foreign currency or in sending capital out of the country.

Expropriation and Compensation

Land rights are a contentious issue in Cambodia, complicated by the fact that most property holders do not have legal documentation of their ownership rights as a result of the Khmer Rouge era. Numerous cases have been reported of influential individuals or groups acquiring land titles or concessions through political and/or financial connections, and then using strong arm measures to displace communities to make way for commercial enterprises. In late 2009, the National Assembly approved the Law on Expropriation, which sets broad guidelines on land-taking procedures for public interest purposes. It defines public interest activities to include construction, rehabilitation, preservation, or expansion of infrastructure projects, and development of buildings for national defense and civil security. This includes construction of border crossing posts, construction of facilities for research and exploitation of natural resources, and construction of oil pipeline and gas networks. Property can also be expropriated for natural disasters and emergencies, as determined by the government. Legal procedures regarding compensation and appeals are expected to be established in a forthcoming sub-decree. The Department of State is not aware of any cases in which Cambodia has expropriated a U.S. investment.

Dispute Settlement

American investors are generally reluctant to resort to the Cambodian judicial system to resolve commercial disputes because the courts are perceived as unreliable and susceptible to external political influence or bribery. Both local and foreign businesses report frequent problems with inconsistent judicial rulings, corruption, and difficulty enforcing judgments. For these reasons, most commercial disputes are currently resolved through negotiations facilitated by the Ministry of Commerce, the Council for the Development of Cambodia (CDC), the Cambodian Chamber of Commerce, and other concerned institutions.

Cambodia adopted a Commercial Arbitration Law in 2006. In 2010, the government provided for the establishment of the National Arbitration Center, Cambodia’s first alternative dispute resolution mechanism, to enable companies to resolve commercial disputes more quickly and inexpensively than through the court system. The opening of the center, however, has been delayed and, according to the Ministry of Commerce, is now scheduled for early 2013. Commercial disputes can also be resolved through international arbitration, where the arbitration occurs at a location outside Cambodia. In 2009, the World Bank’s International Center for the Settlement of Investment Disputes approved a U.S. investor’s Request for Arbitration in a case against the Kingdom of Cambodia; the case is ongoing.

Performance Requirements and Incentives

Under Cambodian law, most foreign investments and foreign investors will be affected by the following taxes: corporate profit tax (20 percent), tax on individual salaries (0 to 20 percent), withholding taxes (4 to 15 percent), value-added taxes (0 to 10 percent), and import duties (rates vary from 0% to 35%).

All investments need to be registered with the Ministry of Commerce. Cambodia’s Law on Investment also provides a mechanism for investment incentives (there are varying types of incentives) that meet specified criteria. Investors seeking an investment incentive must submit an application to the Cambodian Investment Board, the division of the CDC charged with reviewing investment applications. Investment activities excluded from incentives are detailed in the September 2005 Sub-Decree on the Implementation of the Amendment to the Law on Investment. These include the following sectors: retail, wholesale, and duty-free stores; entertainment establishments (including restaurants, bars, nightclubs, massage parlors, and casinos); tourism service providers; currency and financial services; press and media related activities; professional services; and production and processing of tobacco and wood products. Incentives also may not be applied to investments in the production of certain products if the investment is less than US$500,000. This includes food and beverages; textiles, garments, and footwear; and plastic, rubber, and paper products. Investors are not required to place a deposit guaranteeing their investment except in cases involving a concession contract or real estate development project. Investors who wish to apply are required to pay an application fee of seven million riel (approximately US$1,750), which represents the administration fees for securing necessary approvals, authorizations, licenses, or registrations from all relevant ministries and entities, including stamp duties. Under a 2008 sub-decree, the CDC is required to seek approval from the Council of Ministers for investment proposals that involve an investment of capital of US$50 million or more, politically sensitive issues, the exploration and exploitation of mineral or natural resources, or infrastructure concessions. The CDC is also required to seek approval from the Council of Ministers for investment proposals that will have a negative impact on the environment or the government’s long-term strategy.

Right to Private Ownership and Establishment

There are no limits on the rights of foreign and domestic entities to establish and own business enterprises or to compete with public enterprises. Only Cambodian citizens or legal entities, however, have the right to own land. Under the 2001 Land Law, foreign investors may secure control over land through Economic Land Concessions (ELCs), long-term leases, or renewable short-term leases. In May 2012, the government issued a moratorium on ELCs. Since that time, however, there have been several new ELCs granted, which the government justified by stating that any ELC in which the parties were in private negotiations or had reached an agreement “in principle” prior to the directive may continue through to issuance. In October 2012, Prime Minister Hun Sen reiterated that until his retirement, no new ELCs will be granted. Qualified investors approved by the CDC have the right to own buildings built on leased property. However, the law is unclear as to whether buildings from qualified projects can be transferred between foreign investors or whether foreign investors can own buildings built through projects not approved by the CDC. In 2010, Cambodia adopted a law allowing limited foreign ownership in multi-story buildings from the second floor up, such that ownership may not exceed 70 percent of the area of all private units of the co-owned building. Foreigners are not authorized to acquire ownership rights in buildings located within 30 kilometers of the land borders of Cambodia, except in Special Economic Zones or other areas, as determined by the government.

Protection of Property Rights

Cambodia has adopted legislation concerning the protection of property rights, including the Land Law, the Law on Copyrights, and the Law on Patent and Industrial Design. Cambodia is a member of the World Intellectual Property Organization (WIPO), the Paris Convention for the Protection of Industrial Property, and is a party to the ASEAN Framework Agreement on Intellectual Property Cooperation. Cambodia has also concluded bilateral agreements on intellectual property protection and cooperation with the United States and Thailand.

Chattel and Real Property: The 2001 Land Law provides a framework for real property security and a system for recording titles and ownership. Land titles issued prior to the end of the Khmer Rouge regime in 1979 are not recognized due to the severe dislocations that occurred during the Khmer Rouge period. The government is making efforts to accelerate the issuance of land titles, but in practice, the titling system is cumbersome, expensive, and subject to corruption. The majority of property owners lack documentation proving ownership. Even where title records exist, recognition of legal title to land has not been uniform, and there are reports of court cases in which judges have sought additional proof of ownership. Although foreigners are constitutionally forbidden to own land, the 2001 law allows long- or short-term leases to foreigners. As noted above, Cambodia also allows foreign ownership in multi-story buildings from the second floor up.

Intellectual Property Rights (IPR): Cambodia has enacted several laws pursuant to its WTO commitments. Copyrights are governed by the Law on Copyrights and Related Rights, which was enacted in January 2003. Trademarks are governed by the Law Concerning Marks, Trade Names and Acts of Unfair Competition, which was enacted in 2002. A patent law has been in place since 2003. Some gaps in intellectual property protection remain, however, and outstanding legislation includes a draft law for protecting trade secrets, a law on integrated circuit protection, and legislation on protecting encrypted satellite signals required by WIPO. Infringement of IPR is pervasive, particularly involving software, compact discs and music, photocopied books, cigarettes, alcohol, pharmaceuticals, other counterfeited goods. In 2008, the Business Software Alliance estimated a 95 percent software piracy rate in Cambodia that cost the industry US$47 million in 2007. Although Cambodia is not a major center for the production and export of pirated CDs, DVDs, and other copyrighted materials, local businesses report Cambodia is growing as a source of pirated material due to weak enforcement. An inter-ministerial committee was established to combat piracy of video compact discs and DVDs in the domestic market. Infringement complaints may be made to the Economic Police, Customs, the Cambodia Import-Export Inspection and Fraud Repression Directorate General (CamControl), or the Ministry of Commerce. However, the division of responsibility among each agency is not clearly defined. The National IPR Committee is planning to create two new sub-committees: a sub-committee on IPR law enforcement and a sub-committee on the education and dissemination of IPR rules and regulations. The sub-decree on the establishment of the two sub-committees is currently under review by the Council of Ministers.

Transparency of the Regulatory System

There is no pattern of systematic discrimination by the government against foreign investors in Cambodia. Numerous issues of transparency in the regulatory regime arise, however, from the lack of legislation and capacity of key institutions. Investors often complain that the decisions of Cambodian regulatory agencies are inconsistent, irrational, or corrupt. Cambodia has indicated a desire to discourage monopolistic trading arrangements in most sectors but it has yet to pass the Law on Competition as part of its WTO accession obligations. The Ministry of Commerce expects to submit the draft Law on Competition to the Council of Ministers in early 2013. Under the draft law, a National Committee on Competition will be established.

Efficient Capital Markets and Portfolio Investment

The Cambodian government does not use regulation of capital markets to restrict foreign investment. Domestic financing is difficult to obtain at competitive interest rates. Banks have been free to set their own interest rates since 1995, and increased competition between local institutions has led to a gradual lowering of interest rate from year to year. The average annual interest rate on loans in U.S. dollars stood at 11.97 percent in August 2012, a decrease of 2.92 percentage points compared to the same period last year. A law addressing secured transactions, which includes a system for registering such secured interests, was promulgated in May 2007. Most loans are secured by real property mortgages or deposits of cash or other liquid assets, as provided for in existing contract and real property laws. In 2011, credit (through commercial and specialized banks)[1] grew by 33 percent or US$1.085 billion, which was a result of deposit growth of 20 percent (US$880 million) and growth in the capital base of 9.85 percent (US$112 million). The ratio of non-performing loans dropped to 2.43 percent at the end of 2011, compared to 3.05 percent in 2010. Complete figures for 2012 are not yet available.[2]

In November 2011, Standard & Poor’s gave Cambodia’s banks a “B/B” rating with stable outlook. The ranking is based on a variety of factors, including Cambodia’s “low income and narrowly based economy, centralized political and policy-making environment, low payment culture, and a highly dollarized financial system.” In 2008, the NBC raised the minimum capital reserve requirements for banks from US$13 million to US$37.5 million. As of March 2012, the banking system in Cambodia consisted of 32 commercial banks, seven specialized banks (banks set up to finance specific turn-key projects such as real estate development), 33 licensed microfinance institutions, of which seven were licensed microfinance deposit taking institutions, and 31 registered rural credit operators. Compared to 2010, total assets in the banking system grew by 24.39 percent in 2011 and reached US$7.9 billion, equivalent to 63 percent of GDP. Such growth was largely due to the capital of new banking entrants and additional customer deposits.

In a move designed to address the need for capital markets in Cambodia, the Cambodian Securities Exchange was launched on July 11, 2011. In April 2012, Phnom Penh Water Supply Authority, a state-owned enterprise, was the first domestically registered company on the Cambodian Security Exchange. Two other state-owned enterprises -- the Autonomous Port of Sihanoukville and Telecom Cambodia -- are preparing for initial public offerings but a listing date has yet to be announced. In November 2006, the National Assembly passed legislation to permit the government to issue bonds to make up budget deficits. No bonds, however, have been issued since 2007 and Prime Minister Hun Sen said in 2008 that the government does not plan to issue bonds in the near future. Also in 2007, the government passed the Law on the Issuance and Trading of Non-government Securities.

Competition from State Owned Enterprises

Cambodia has several state-owned enterprises (SOEs) and two joint-venture enterprises in which the government has a majority stake. These include seven rubber plantations; the Agricultural Inputs Company, which is engaged in the importation, purchase and sale of agricultural products; the Green Trade Company, which manages Cambodia’s national reserve of rice through purchases and sales made at market prices; infrastructure operating companies, such as the Phnom Penh Water Supply, the Electricity Authority of Cambodia, and the Rural Development Bank; and two joint-venture companies – telecommunications operator Camintel and the Cambodian Pharmaceutical Enterprise. Currently, the country does not have a sovereign wealth fund. Each SOE is under the supervision of a line ministry or government institution and is overseen by a board of directors drawn from among senior government officials. Private enterprises are generally allowed to compete with public enterprises under the same terms and conditions.

Corporate Social Responsibility

Corporate social responsibility (CSR) is a new concept to Cambodia and is not widely understood among local producers or consumers. However, certain labor and social standards have been established in key industries, particularly in the garment sector. Under the terms of the 1999 U.S.-Cambodia Bilateral Textile Agreement, the U.S. government committed to increase the size of Cambodia’s garment export quota if the country demonstrated improvements in labor standards. This was the first bilateral trade agreement to positively link market access with progress in compliance with labor obligations. The International Labor Office (ILO), in coordination with the government, monitors labor adherence to standards in the garment sector. The ILO project succeeded in improving compliance with labor standards, virtually eliminating the worst labor abuses, such as forced labor and child labor in the garment sector. Socially responsible businesses continue to source garments from Cambodia due to its well-deserved reputation for high labor standards. The ILO’s Better Work and Better Factories Cambodia program provides a variety of training opportunities, including advisory services for the garment industry, that focus on improving working conditions, productivity, and quality through workplace cooperation. In addition, several multinational enterprises, including a number of U.S. companies, conduct CSR programs in Cambodia that are viewed favorably by the local community.

Political Violence

The risk of political violence directed at foreign companies operating in Cambodia is small. Some violent protests have occurred in the past, such as anti-Thai riots in 2003 against the Embassy of Thailand and Thai-owned commercial establishments. However, the Department of State is unaware of any recent incidents directed at American or other Western interests.

Corruption

Business people, both local and foreign, have identified corruption, particularly within the judiciary, as the single greatest deterrent to investment in Cambodia. Corruption was cited by a plurality of respondents to the World Economic Forum survey as the most problematic factor for doing business in Cambodia. Public sector salaries for lower level officials are approximately US$40 per month (the average base salary for all civil servants is about US$105 per month). Although there is an annual salary increase of 10-15 percent, these wages are far below the level required to maintain a suitable quality of life in Cambodia, and as a result, public employees are susceptible to corruption and conflicts of interest. Local and foreign businesses report that they must often pay extra facilitation fees to expedite any business transaction. Additionally, for those seeking to enter the Cambodian market, the process for awarding government contracts is not transparent and is subject to significant irregularities.

The Anti-Corruption Law was adopted in 2010 with the objective to combat corruption through education, prevention, and law enforcement with public participation and support and with international cooperation. Under this law, all civil servants are obligated to declare their financial assets to the government every two years. The second round of asset and debt declaration will take place during the month of January 2013. The newly formed Anti-Corruption Unit has launched several high-profile prosecutions against public officials, including members of the police and judiciary, since its inception in 2010.

Bilateral Investment Agreements

Bilateral investment treaties (BITs) provide reciprocal national treatment to investors, excluding benefits deriving from membership in future customs unions or free trade areas and agreements relating to taxation. These agreements preclude expropriations, except those that are undertaken for a lawful or public purpose, are non-discriminatory, and are accompanied by prompt, adequate and effective compensation at the fair market value of the property prior to expropriation. The agreements also guarantee repatriation of investments and provide for settlement of investment disputes via arbitration. In July 2006, Cambodia signed a Trade and Investment Framework Agreement with the United States to promote greater trade and investment in both countries and provide a forum to address bilateral trade and investment issues. In August 2012, the United States and Cambodia agreed to begin exploratory discussions on a potential BIT. Those negotiations are ongoing. Cambodia has signed bilateral investment agreements with Austria, Australia, China, Croatia, Cuba, Czech Republic, France, Germany, Indonesia, Kuwait, Japan, Laos, Malaysia, the Netherlands, Democratic People’s Republic of Korea, Pakistan, the Philippines, Singapore, Republic of Korea, Switzerland, Thailand, Vietnam, and the Organization of the Petroleum Exporting Countries. Cambodia also has an agreement with the Overseas Private Investment Corporation to encourage investment. Future agreements with Algeria, Bangladesh, Belarus, Belgium-Luxembourg Economic Union, Bulgaria, Myanmar, Egypt, Hungary, Israel, Iran, Libya, Macedonia, Malta, Qatar, Russia, Turkey, the United Kingdom, and Ukraine are planned.

OPIC and Other Investment Insurance Programs

Cambodia is eligible for the Quick Cover Program under which the Overseas Private Investment Corporation offers financing and political risk insurance coverage for projects on an expedited basis. With most investment contracts written in U.S. dollars, there is little exchange rate risk. Even for riel-denominated transactions, the fact that Cambodia has adopted a managed floating exchange rate regime based on the US dollar means that exchange rates are likely to remain stable. Cambodia is a member of the Multilateral Investment Guarantee Agency of the World Bank, which offers political-risk insurance to foreign investors. The Export-Import Bank of the United States (Ex-Im Bank) provides financing for purchases of U.S. exports by private-sector buyers in Cambodia on repayment terms of up to seven years. Ex-Im Bank support typically will be limited to transactions with a commercial bank functioning as an obligor or guarantor. The Ex-Im Bank will, however, consider transactions without a bank undertaking on a case-by-case basis.

Labor

Approximately 65 - 70 percent of the labor force is engaged in subsistence agriculture. Around 300,000 people, the majority of whom are women, are employed in the garment sector. An additional 300,000 Cambodians are employed in the tourism sector, and a further 50,000 people in construction. The economy is not able to generate enough jobs in the formal sector to handle the large number of new entrants to the job market every year. This dilemma is likely to become more pronounced over the next decade since Cambodia suffers from a large demographic imbalance. According to the 2008 General Population Census of Cambodia, the country’s annual population growth rate is 1.54 percent. Over 70 percent of the population is under the age of 30. As a result, over the next decade at least 275,000 new job seekers will enter the labor market each year. Given the severe disruption to the Cambodian education system and loss of skilled Cambodians during the 1975-79 Khmer Rouge period, workers with higher education or specialized skills are few and in high demand. The Cambodia Socio-Economic Survey conducted in 2011 found that about 27.3 percent of the labor force had completed an elementary education. Only 2.5 percent of the labor force had completed post-secondary education. The 2012-2013 Global Competitiveness Report of the World Economic Forum identified an inadequately educated workforce as one of the most serious problems in doing business in Cambodia.

Cambodia's 1997 Labor Code protects the right of association and the right to organize and bargain collectively. The code prohibits forced or compulsory labor, establishes 15 as the minimum allowable age for paid work, and 18 as the minimum age for anyone engaged in work that is hazardous, unhealthy, or unsafe. The statute also guarantees an eight-hour workday and 48-hour work week, and provides for time-and-a-half pay for overtime or work on an employee's day off. As of October 2010, the minimum wage for garment and footwear workers was officially set at US$61 per month. In November 2011, to help workers meet basic needs like health care, the government awarded a US$5 per month pay raise starting in January 2012, thus bringing the minimum monthly wage up to US$66. There is no minimum wage for any other industry. To increase competitiveness of garment manufacturers, the labor code was amended in 2007 to establish a night shift wage of 130 percent of daytime wages.

Enforcement of many aspects of the labor code is poor but it is improving. Labor disputes can be problematic and may involve workers simply demanding conditions to which they are legally entitled. Collective labor disputes between employers and employees may be resolved through conciliation and arbitration by the arbitration council, which is an independent, national institution with quasi-judicial authority derived from Cambodian labor law. The U.S. government, the ILO, and others are working closely with Cambodia to improve enforcement of the labor code and workers' rights in general. The U.S.-Cambodia Bilateral Textile Agreement linked Cambodian compliance with internationally recognized core labor standards with the level of textile quota the United States granted to Cambodia. While the quota regime ended on January 1, 2005, a “Better Factories” program continues to work towards improving existing labor standards.

Foreign Trade Zones/Free Trade Zones

To facilitate the country's development, the Cambodian government has shown great interest in increasing exports via geographically defined special economic zones (SEZs). The government adopted the Sub-Decree on Special Economic Zones, which defines SEZs and establishes the rules under which they operate. In December 2005, the Council of Ministers passed the Sub-Decree on Establishment and Management of Special Economic Zones to speed up the creation of the zones. The sub-decree details procedures, conditions, and incentives for the investors in the zone. Since issuing the sub-decree, the Cambodia Special Economic Zones Board had approved 25 SEZs, of which nine are in operation. These SEZs are located near the borders of Thailand and Vietnam, and in Phnom Penh, Kampot, and Sihanoukville. Others are at different stages of development and some remain undeveloped. The main sectors of investment in SEZs include garments, shoes, bicycles, food processing, car and motorcycle assembly, and electrical equipment industries.

Foreign Direct Investment Statistics

Foreign direct investment (FDI) registered capital in Cambodia has been modest since 1998, with an average inflow of US$192 million in the period 1998-2011. The FDI registered capital figures probably understate actual investment, since Cambodia reports only registered capital and not fixed assets. While the CDC provides statistics for fixed assets, these numbers are based on projections and not actual investments. During the first 11 months of 2012, investment was concentrated in the following sectors: industries (68.72 percent, of which 70 percent is garment factory investment), agriculture (16.08 percent), services (13.32 percent), and tourism (1.88 percent).

CDC registered capital figures for the top 15 approved projects, including domestic investment and broken down by country of origin, are provided below. The FDI registered capital figures below may overstate investment because they include projects that have not yet been, or may never be, fully completed. Retention of dormant or defunct projects from earlier years makes the investment figures appear higher.

Total Cumulative Registered Investment Projects by Country of Origin

August 1994 to November 2012 (Source: CDC)

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Countries

US$Million

Percent

Cambodia

1,658

25.56

Malaysia

1,607

24.77

China

788

12.15

Taiwan

501

7.73

Vietnam

394

6.07

Korea

271

4.18

Thailand

227

3.50

Singapore

221

3.41

Hong Kong

180

2.78

United Kingdom

129

1.99

United States

78

1.20

Japan

69

1.06

Canada

67

1.03

Australia

58

0.90

Indonesia

56

0.86

Other

182

2.81

Total

6,486

100.00

As of November 2012, the CDC has registered approximately US$77.9 million in U.S. investment since August 1994. Caltex has a nationwide chain of service stations and a petroleum holding facility in Sihanoukville; Crown Beverage Cans Cambodia Limited, a part of Crown Holdings Inc., produces aluminum cans; CBRE Group, Inc. is one of the biggest real estate companies in Cambodia; Motorola Solutions Inc. has invested in a trunk radio system for the Cambodia Ministry of Interior; RM Asia owns a Ford automobile assembly plant, a John Deere distributorship, Swensen’s Ice Cream, Pizza Company, Kohler, and Dairy Queen; GE Health Care and GE Consumer and Industrial have local distributors, and Chevron is actively exploring offshore petroleum deposits. W2E Siang Phong Co., Ltd., a joint venture between U.S. and Dutch investors, has invested in biogas power generation. There are also U.S. investors in a number of Cambodia's garment factories. In 2008, several Cambodia-focused private equity funds emerged seeking to raise between US$100 million and US$500 million each for investments in infrastructure, agriculture, tourism, and real estate development, among other sectors. However, it appears the global economic slowdown is limiting fundraising success and widespread investments by these funds have not yet materialized.

Major non-U.S. foreign investors include Asia Pacific Breweries (Singapore), Asia Insurance (Hong Kong), ANZ Bank (Australia), BHP Billiton (Australia), Oxiana (Australia), Infinity Financial Solutions (Malaysia), Total (France), Cambodia Airport Management Services (CAMS) (France), Manulife Cambodia PLC (Canada), Prudential (United Kingdom), Smart Mobile Phone (Malaysia), Shinawatra Mobile Phone (Singapore), Thakral Cambodia Industries (Singapore), Petronas Cambodia (Malaysia), Charoeun Pokphand (Thailand), Siam Cement (Thailand), Bank of China (China), and Cambrew (Malaysia).

Since 2007, several well known U.S. companies opened or upgraded their presence in Cambodia. General Electric and DuPont have representative offices. Otis Elevators, a division of United Technologies, also upgraded to a branch office, and Microsoft initiated a presence through its Market Development Program.

Some major local companies and their sectors are: Sokimex Group (petroleum, tourism, and garments), Royal Group of Companies (telecommunications and information technology, banking and insurance, media and entertainment, hotel and resort, properties and development, trading, and transportation), AZ Distribution (construction and telecommunication), Mong Rethy Groups (construction, agro-industry, and rubber and palm oil plantations), KT Pacific Group (airport projects, construction, tobacco, food, and electronics distribution), Hero King (cigarettes, casinos, and power), Anco Brothers (cigarettes, casinos, and power), Canadia Bank (banking and real estate), Acleda Bank (banking), Men Sarun Import and Export (agro-industry and rice and rubber exports), and Vattanac Capital (banking, real estate, and golf resorts). In 2009, Acleda Bank opened its first bank branch outside of Cambodia in Laos and has announced plans for further expansion into Vietnam and China. The bank also expects to expand its operations into Myanmar in 2013. Statistics on Cambodian investment overseas are not available, but such investments are likely minimal.



[1] This figure does not include micro-finance institutions.

[2] Annual Bank Supervision Report.

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