With Cambodia’s three international airports welcoming 4.7 million passengers from January to November 2024, it’s clear the nation is on an upward trajectory post-pandemic. However, returning to pre-pandemic levels remains the benchmark for sustainable growth. The State Secretariat of Civil Aviation (SSCA) projects a 67% growth in air traffic for 2024 compared to 2019, signaling significant recovery.
But how can Cambodia ensure it continues to attract tourists and investors? Let’s explore key strategies, reforms, and improvements that position the Kingdom as a global destination for tourism and investment.
Key Facts about Investment in Cambodia
Cambodia presents an attractive investment destination due to its strategic location, peace, stability, and progressive government reforms, supported by prudent financial management. Over the past two decades, Cambodia has experienced an average GDP growth of 6.91%, surpassing ASEAN and global averages, ranking it as the 10th fastest-growing economy worldwide. Key sectors driving foreign direct investment include financial activities, manufacturing, and real estate, bolstered by supply chain shifts and tariff avoidance, particularly in industries like solar panels and tire manufacturing for export. Infrastructure advancements, such as airports, ports, and highways, have positioned Cambodia as a regional hub, while the nation’s economic diversification extends beyond its traditional pillars—garments, real estate, tourism, and agriculture—to include financial services, manufacturing, and technology. However, further development in electricity capacity and cost reduction is essential to attract big tech investments in emerging fields like data centers and blockchain. Sustainability and ESG reporting are gaining prominence, ensuring companies’ adherence to environmental and governance standards. Tax incentives, favorable investment laws, and export advantages to markets like the US and ASEAN further solidify Cambodia’s appeal. Strategic partnerships, such as China’s One Belt One Road initiative, have also enhanced investment opportunities, creating a robust environment for global players like Alibaba and BYD to capitalize on local benefits.
Recent PM introduced 2 high-level mechanisms to enhance support for both domestic and foreign investors.
Prime Minister Hun Manet has introduced two high-level mechanisms to enhance support for both domestic and foreign investors. These mechanisms, which fall under his direct oversight, aim to facilitate business growth and resolve issues effectively.
- Trade Policy Advisory Committee: This committee acts as a strategic advisor to the government, monitors global trends, and ensures Cambodia’s policies remain competitive.
- Private Sector Dispute Resolution Promotion Committee: This committee addresses business disputes quickly and efficiently.
These initiatives were announced at the Global Chinese Economic & Technology Summit 2024. The Prime Minister emphasized the government’s commitment to supporting businesses through digitized company registration, streamlined investment approvals, and stable, predictable policies. According to Fresh News
Enhancing Seamless Travel Experiences
Cambodia has made commendable strides in simplifying visitor arrivals and modernizing payment systems. The Digital Economy and Society Policy Framework 2021–2035 outlines an ambitious roadmap for enhancing the visitor experience.
Recent improvements include:
- E-Visas for numerous countries, allowing travelers to apply online.
- Cashless payments for visas on arrival, promoting transparency.
- The Cambodia eArrival app, eliminating paper forms for customs and immigration (though there’s room for improvement).
- The Bakong Tourists app, which, while in its soft phase, shows promise in providing a more streamlined travel experience.
While some stakeholders advocate for scrapping visa fees entirely, the government faces fiscal constraints, making this revenue stream essential. Cambodia is also exploring a regional ASEAN Schengen-style visa, potentially simplifying cross-border travel through the “6 Countries, 1 Destination” policy.
Seamless digital arrivals, improved communication about processes, and user-friendly systems are essential for Cambodia to leave a positive first impression.
Economic Reforms and Diversified Investments
Deputy Prime Minister Sun Chanthol recently reaffirmed Cambodia’s vision for economic reform and investment diversification. Cambodia’s policies are notably inclusive, welcoming investors from all nations, including the EU, Canada, and the United States.
Key Milestones:
- A 75% increase in foreign investment projects and a 162% rise in investment capital in 2024.
- Strategic shifts toward high-growth industries as outlined in the Industrial Policy 2015–2035.
- Infrastructure investments, including $36 billion allocated for transportation improvements from 2023–2033.
Major infrastructure projects, such as the $1.2 billion Techo Takhmao International Airport (set to open in 2025), aim to enhance connectivity, trade, and tourism. However, lessons from the Siem Reap-Angkor International Airport’s lukewarm response underscore the need for effective communication and flawless execution.
“The private sector is a key engine for economic growth,” Sun Chanthol emphasized, highlighting Cambodia’s liberal investment regime and robust mechanisms for property ownership.
Confronting Challenges to Build International Trust
While Cambodia offers rich cultural heritage and investment opportunities, its reputation has been tarnished by reports of human trafficking and scam centers. Addressing these issues is crucial for fostering trust and confidence among potential visitors and investors.
Efforts to Combat Trafficking
Chou Bun Eng, Vice-Chair of the National Committee for Counter Trafficking, acknowledged the complexities of these crimes and emphasized decisive action:
“Authorities must feel the urgency to act when Cambodia is placed in the lowest tier of global rankings for combating human trafficking. We must act decisively to address this issue and avoid complacency.”
Cambodia’s ranking in the US Department of State’s Trafficking in Persons Report (Tier 3) serves as a wake-up call, prompting both local and international collaboration to address these challenges effectively.
Diversifying Markets and Strengthening Trade
Cambodia continues to diversify its target markets, establishing trade agreements and cross-border payment systems with regions such as the Middle East, Eastern Europe, and Africa. For instance, Realestate.com.kh’s partnership with Bazanova Management showcases proactive efforts to tap into new opportunities.
Additionally, the country’s political stability has fostered confidence among investors, creating a favorable environment for long-term growth.
Building a Bright Future
As Cambodia enters its peak tourist season, it’s imperative that all stakeholders – from government officials to local businesses – work collaboratively to ensure visitors leave with positive stories to share. After all, word of mouth remains one of the most powerful marketing tools.
With a strategic focus on improving infrastructure, enhancing visitor experiences, and addressing challenges head-on, Cambodia can confidently position itself as a premier destination for tourists and investors alike.
Cambodia has made remarkable progress, but there’s always room for improvement. What do you think are the most critical steps the Kingdom should take to attract more tourists and investors? Share your thoughts in the comments below!