The Kingdom’s new investment law is expected to be online soon because the draft law is already 95 percent complete, according to an official from the Ministry of Economy and Finance (MEF).
Phan Phalla, the MEF’s secretary of state, said at a news conference on Government Measures in Response to the Impact of COVID-19 at the MEF yesterday that it will be put in place soon because it was sufficiently ready.
He said the new law is better than the old one and will solve any issues of concern to investors and make the Cambodian investment environment more attractive.
“This new law will provide a smart incentive to new industry and for the long term, what Cambodia needs to do is to improve competition and eliminate trade barriers for which we have already completed the preparations,” he said.
He added the new investment law will be more attractive and absorb more investors because Cambodia has already finished a free-trade agreement (FTA) with China while negotiating with South Korea.
Cambodia’s first investment law was established in 1993 and revised in 2003 to adjust the progress of investment.
The government drafted the new investment law over the last few years by gathering input from the private sector and development partners to make the country a more attractive destination for foreign investment.
The government aims at transforming Cambodia to become an upper-middle-income country by 2030 and Prime Minister Hun Sen expressed optimism that Cambodia is on track to make the transition by 2030 and to achieve high-income status by 2050. He will lead a delegation to Beijing on Aug 12 to witness the FTA signing between Cambodia and China.
Economists say for the near future, labour-intensive, export-oriented industries would be important for Cambodia.
Hiroshi Suzuki, chief executive officer (CEO) of the Business Research Institute for Cambodia (BRIC) said the most likely industry for Cambodia is parts manufacturing for automobiles and electronics.
“It would be necessary for the government to make efforts to attract this kind of Japanese manufacturing investment to Cambodia, possibly shifting it from neighbouring countries,” he said.
The CEO added information technology (IT), financial technology and 5G would have huge potential for the country. Better higher education and training, as well as support for innovation and startups would be necessary.
The MEF’s Phalla said with the trend of more factories shifting from China, Cambodia needs to take this chance to diversify its production chain.
“Because we cannot rely on the garment sector or tourism and with our new investment law we need to move to a new industry,” he said.
On the edge of a more digital Cambodia, the Minister of Commerce has also been preparing and drafting more trade policies to promote the Kingdom’s business potential.