Cambodia, officially known as the Kingdom of Cambodia, is a vibrant nation in the heart of Southeast Asia, renowned for its rich cultural heritage and remarkable resilience. Once the seat of the powerful Khmer Empire, which built the majestic Angkor Wat, the largest religious monument in the world, Cambodia today blends ancient tradition with a rapidly modernizing society. The country enjoys a peaceful environment with strong internal security, political stability, and a welcoming culture known for its hospitality and friendliness. With a predominantly Buddhist population of about 17.8 million (2025), Cambodians are known for their hard work, optimism, and community spirit qualities that continue to shape the nation’s growing economy.

Geographically, Cambodia is strategically located in the Indochina Peninsula, sharing land borders with Thailand to the west and northwest, Laos to the north, Vietnam to the east and southeast, and a southern coastline along the Gulf of Thailand, giving it access to important maritime routes. Its central location positions it as a natural logistics and trade hub within the ASEAN region, enabling connectivity through major international gateways. Cambodia currently operates four international airports, in Phnom Penh, Siem Reap, Sihanoukville, and the newly built Techo International Airport, and maintains a growing network of highways and expressways that enhance transport efficiency across the country.

Economically, Cambodia has made steady progress over the last decade. After the challenges of the global pandemic, the economy rebounded strongly with GDP growth rising from 3.0% in 2020 to a projected 6.3% in 2025, driven by manufacturing, tourism, construction, and agriculture. The nation’s economic diversification is further supported by its 32 operational Special Economic Zones (SEZs) and development of modern infrastructure including expressways, deep-sea ports, and industrial parks. Key urban centers such as Phnom Penh, Siem Reap, Sihanoukville, Battambang, and Kampot are leading Cambodia’s urban and investment transformation, attracting both local and foreign investors. With its youthful population over 60% under the age of 35 and a national focus on skill development and digital transformation, Cambodia offers one of the most dynamic and promising business environments in Southeast Asia.

Peace, Political and Macroeconomic Stability

The Royal Government of Cambodia (RGC) firmly safeguards the hard-earned peace and political stability as the core principle and value for Cambodia as a whole, to create a secure environment for long-term business operation.

Cambodia has achieved remarkable economic success, boasting an average annual growth rate of over 7% before the pandemic. This momentum has continued even amidst global challenges, with a projected growth of 6.0% in 2024 and a promising 6.3% for 2025. The kingdom also offers a predictable business environment, characterized by manageable inflation, stable exchange rate, and low unemployment rate.

Key Figures (2025e):
– GDP Growth: 5.2%
– GDP per Capita: $2,896
– Inflation Rate: 3.0%
– Foreign Reserves: $22.5 Billion
(Source: Ministry of Economy and Finance)

Strategic Location with Broad Market Access

Cambodia sits at the heart of Southeast Asia, a strategic location granting access to dynamic regional markets. Cambodia is an open economy and quickly integrates itself into regional and global markets by embracing bilateral and multilateral FTAs, granting investors preferential access to diverse markets, enabling businesses to reach new heights.

Read more: Why Cambodia for Textile and Aparel?

Investors in Cambodia have access to the Mekong subregion market, home to over 300 million people, a member of ASEAN with a population of over 670 million (2023), and the Regional Comprehensive Economic Partnership (RCEP) with a population of 2.3 billion and GDP of $25.8 trillion. On top of that, Cambodia also has bilateral FTAs with China, Korea and a Comprehensive Economic Partnership Agreement with the UAE. Additionally, Cambodian exports have benefited from duty-free quota-free access to the EU, US and UK markets thanks to their preferential trade schemes offered to Cambodia as an LDC.

Key Figures:
– ASEAN GDP (2023): $3.8 Trillion
– RCEP’s Share of Global GDP: 30%
– Population in RCEP Region: 2.3 Billion
– FTAs Established: 10
(Source: Ministry of Commerce and ASEAN Secretariat)

Dynamic and Dexterous, Young Workforce

Cambodia is blessed with a demographic dividend, possessing an abundant young workforce with competitive wages. The Royal Government has embarked on an ambitious skill development program to provide vocational and technical training for around 1.5 million youths from poor and vulnerable households across the nation. Investors will find it easy to recruit young and hard-working talents in Cambodia with a wide range of certified skills.

Key Figures:
– 60% of population under the age of 35
– Minimum wage per month (2025): $208
– Skilled labor force (2023): 29,000
– University Graduates (2023): 42,000
(Source: Ministry of Planning and Ministry of Labour and Vocational Training)

Transition to Green and Digital Economy

Around 61% of the energy production in Cambodia is from renewable energy sources (as of 2024). Cambodia has one of the lowest levels of CO2 emissions among the ASEAN region. Adhering to the notion of sustainable development goals, the RGC is committed to achieving country-wide carbon neutrality by 2050, as set forth in the ‘Long-Term Strategy for Carbon Neutrality.’

Read more: Why Cambodia for Automotive?

Digital technology-wise, the country’s digital boom is evident and transforming public institutions, businesses and individual lives. Phnom Penh, Battambang, Siem Reap and the coastal provinces are at the forefront of this technological revolution, with digital services in various sectors emerging. Mobile services in Cambodia are very affordable, and the internet can be accessed with fast speeds and reliable connections. With fast-rising internet penetration, mobile and social media use, the RGC is actively building Cambodia’s digital readiness and designing policies to transform Cambodia into a digital economy in the long run.

Key Figures:
– Share of Renewable Energy Capacity (2024): 61%
– Mobile Users (2024): 21 Million
– Hi-Speed Internet Penetration (2023): 109% per 100 Users
– Hi-Speed Internet Coverage in Inhabited Areas (2023): 93%
(Source: Electricity Authority of Cambodia and Ministry of Post and Telecommunications)

Enabling Business Environment

The RGC actively fosters an investment-friendly environment for both domestic and foreign investors, adhering to the principles of openness, transparency, predictability and competitiveness on a level playing field without discrimination.

Investors are offered generous tax incentives, investment guarantees, and streamlined administrative procedures. Cambodia is open to foreign business ownership and free capital repatriation. Particularly, Cambodia allows 100% foreign ownership in most sectors (except land ownership), and allows investors to freely purchase and repatriate foreign currencies. The RGC strongly commits to assisting investors at all stages and strengthening public-private sector dialogues and partnerships.

Key Figures:
– Up to 15 years Tax Relief
– 100% Foreign Ownership Allowed in Most Sectors
– Online Investment Registration via cdcIPM
– 20 Working Days for Investment Registration

Growing Logistical Infrastructure and Special Economic Zones

To optimize efficient access to competitive and diversified export markets, Cambodia is expanding infrastructure connectivity to integrate and connect its transport network to key economic hubs and corridors in the region.

Read more: Why Cambodia for Electronics?

Substantial investments have been made in major infrastructure such as expressways, international airports, multimodal logistic hubs, deep seaports and inland waterways. The development of electricity infrastructure has also seen notable progress, with costs declining significantly and capacity increasing fifteen-fold over the past 15 years. In addition, several special economic zones (SEZs) have been established across main economic poles in Cambodia, connected by road, rail, sea, and air to key international trade hubs. Investments inside any SEZ receive the same incentive schemes as those outside the zone, but enjoy better administrative facilitation with the advantage of industrial clusters.

Key Figures:
– 4 International Airports
– 3 International Ports
– 17 Expressways Planned Until 2050
– 32 Operational SEZs

Source: Cambodian Investment Board (CIB)

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Exploring the Cultural and Historical Roots of Cambodia’s Water Festival.

The Cambodian Water Festival, known locally as Bon Om Touk, is one of the nation’s most vibrant and symbolic celebrations. While today it draws millions to Phnom Penh for three days of festivities, its origins are deeply rooted in Cambodia’s royal history, local traditions, and spiritual beliefs that reflect the close bond between people and water.

From Modest Village Races to a Royal Celebration

In ancient times, boat races were not the grand spectacles we know today but humble village competitions. Fishermen used their everyday fishing boats to race for fun, marking the end of the rainy season. However, when King Norodom relocated the capital from Oudong to Phnom Penh between 1860 and 1904, the Water Festival evolved into a royal event. This shift elevated the local pastime into a national celebration symbolizing unity, gratitude, and royal prestige.

As Professor Ang Choulean, an ethnologist from the APSARA National Authority, explained in an interview with Cambodianess journalist Ky Soklim, “The complete official name of the celebration is preah reach pithi bon om tuk, bandet pratit, sampeah preah khae & ok ambok,” meaning the Royal Boat Racing Festival, the Floating Lantern Festival, the Worship of the Moon, and the Eating of Roasted Flattened Rice.

He noted that this combined festival dates back around 100 to 150 years, coinciding with the establishment of Phnom Penh as the new capital. While rural communities continued to celebrate their own events such as Bon Chenh Vassa, which marks the end of Buddhist Lent, and Ok Ambok, which follows a month later King Norodom’s court merged the two in the capital to create a more elaborate royal celebration.

Why the Water Festival Takes Place in Front of the Royal Palace?

Phnom Penh was chosen for the royal festivities not by chance but by geography. “In Phnom Penh, it is celebrated in front of the Royal Palace since the four-faced river exhibits a unique flow,” said Ang Choulean. The convergence of four rivers, including the Tonle Sap River, which connects to the vast Tonle Sap Lake, creates a natural wonder: every year, the river’s flow reverses direction.

A boat preparing for boat racing at Kampong Thom province. Photo: Kampong Thom Administration

During the rainy season, water from the Mekong River pushes into the Tonle Sap Lake, expanding it like a natural reservoir. When the dry season arrives, the lake releases this water back toward the sea. This remarkable reversal is a symbol of renewal and abundance an occasion worth celebrating.

In the past, royal Brahman priests, known as Bakou, would perform a symbolic ritual on the river, cutting a ceremonial ribbon to mark the moment when the water begins to flow back downstream. Although the water naturally reverses on its own, the ritual underscored the spiritual connection between nature, the monarchy, and the divine.

From Ancient Roots to Modern Splendor

While some link the Water Festival to depictions of naval battles on temple bas-reliefs, Professor Choulean disagrees. “As a researcher, I do not consider this story a correlation with the historical naval combat. I do not believe it at all, but also, I do not interfere with anyone who believes in it,” he said. Instead, the festival is a cultural evolution of local practices, rituals that were later elevated by royal patronage to express national identity.

By the time of the Sangkum Reastr Niyum regime (1953–1970), the Water Festival had become a cornerstone of Cambodian heritage, drawing more boats and spectators than ever before. Smaller boats of around 30 rowers then evolved into the long, majestic racing vessels seen today, each carrying over 70 oarsmen.

Spiritual Beliefs Behind the Racing Boats

Every racing boat, or khae, is treated with deep respect, not merely as a vessel but as a sacred spirit. “The dancer does of course play a part in boosting the morale and the synchronisation of the rowers. However, we also need to know that people consider these racing boats as spirits,” said Professor Choulean.

Boats are often adorned with symbolic decorations eyes, hair, and even names to embody their spiritual essence. They are stored in pagodas, believed to be the only places capable of containing their powerful energy. The ethnologist explained that pregnant women are traditionally forbidden from approaching the boats as they are thought to bring misfortune. During training or races, dancers or senior men guide the rhythm of the rowers with chants and ritual gestures, invoking blessings for strength and success.

A Celebration of Water, Unity, and Faith

Today, the Water Festival continues to unite Cambodians across generations and regions. It is more than a celebration of a river’s reversal, it is a living tradition symbolizing gratitude for nature’s bounty, respect for ancestral beliefs, and the shared joy of community. Each November, when the river changes course, Phnom Penh’s riverfront bursts with color, faith, and national pride, reflecting a legacy that has flowed through Cambodia’s history for more than a century.

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