Cambodia is an agrarian country with many underdeveloped areas. Even so, it is experiencing rapid economic growth with major contributors from tourism, garment, agriculture and construction. Rising to be one of the world’s fastest growing economies, it has garnered wide-spread and continued interest from investors worldwide to set up operations in the Kingdom. What is it about Cambodia that attracts the interest from the rest of the world?
1. Last Investment Frontier Market in ASEAN
Although there is a grey area as to what constitutes a frontier market, it typically refers to countries that are less developed and economically under-valued. Investing in a frontier market offers high yields although it comes with higher risk as compared to emerging or developed markets. Touted to be the last frontier market in South East Asia, Cambodia has attracted an abundance of foreign investors into the country due to its tremendous growth potential.
2. Strategic Location
With its location at the centre of Southeast Asia, Cambodia is strategically situated with influx of economic activities from countries in close proximity, namely Thailand, Vietnam, China and India. Its favourable geographical location creates countless opportunities for businesses in the nation.
3. Teem With Untapped Natural Resources
Natural resources such as mineral deposits, oil and gas reserves as well as tourism spots remain mostly untapped. With an abundant fertile land and natural resources, Cambodia is a country with immense growth potential.
4. Strong and Steady Economic Growth
Cambodia is one of the fastest growing economies in Southeast Asia. With a growth rate of around 7% year-on-year, the country is enjoying a strong and steady economic growth with main contributions from garment, construction and property sectors.
5. Political Stability
After a long duration of social unrest and political instability, Cambodia is currently enjoying peace and political stability. Democracy has improved vastly. With a strong political climate, foreign investors will flock to the nation. In turn, it will lead to a stronger economy.
6. Low Inflation and Stable Exchange Rate
Even though Cambodia’s economy has been growing steadily over the years, inflation remains low. The exchange rate has maintained a stable rate of 4,050 riels per US dollar. A low inflation and stable exchange rate will attract more investments as firms and investors will be more confident in investing in the nation. This will lead to higher rates of economic growth in the long run.
7. Relatively Young Population
Cambodia’s population is relatively young, with approximately half of its population under the age of 25. Having a young population sure has its advantages such as a more efficient workforce, greater productivity and an abundance of young citizens ready to join the workforce any time.
8. Openness to Foreign Investments
As a frontier market, Cambodia is brimming with opportunities for growth and development. The government is very welcoming of businesses entering the nation. In support of foreign investments , the pro-business government allows businesses to be 100% fully owned by foreign investors. An Anti-Corruption Law has been passed to boost potential investors’ confidence.
Cambodia, Truly A Hidden Gem
With favourable investment conditions such as strategic location, dynamic workforce, natural resources, stable economic and political climate, there lies an abundance of opportunities for investment. Like a diamond waiting to be polished in order to shine brightly, Cambodia is truly a hidden investment gem in Southeast Asia.
All information in this article is correct to the best of our knowledge and belief at the time at which the article was originally published.
This article was written in the author’s personal capacity. Any opinion expressed in this article are the author’s own and
do not reflect the view of Vivaz Capital Pte Ltd.
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