Setting up a business in Cambodia

Setting up a business is a popular venture in Cambodia, and the plethora of possibilities continue to attract ambitious entrepreneurs from overseas. The food and beverage industry, as well as tourism and hospitality, are two particularly popular fields, but entrepreneurs with a sharp eye and a keen spirit are continually spotting gaps in the market and have branched out into pet stores, coworking spaces and even franchises in recent years.

While it’s relatively easy to set up a business in Cambodia, it can be hard to ensure it flourishes, as the landscape is competitive. Value addition is key to survival and, whatever the type of business you start, it’s important to provide quality products or services, and focus a lot of time and effort on developing a loyal client base.

If you are thinking of starting a business in the Kingdom of Wonder, it’s important to thoroughly research the market and be sure of the feasibility of your brainchild beforehand. Though the market is growing, it’s still small and impressionable. Cambodia’s traumatic past is still relatively recent, and the country is consequently far less developed than many others. As a result, many things are still new to the people and there’s a tendency for locals to be easily influenced to sway between different products, places and brands. Source: expat.com

Market Overview

Cambodia has experienced rapid economic growth over the last decade. Cambodian gross domestic product (GDP) has grown at around seven percent over the past decade and it is expected to continue to grow at a similar rate in 2017. In 2016, Cambodia graduated to lower-middle income status as measured by the World Bank with a Gross National Income (GNI) per capita of $1,070. The country, however, remains one of the poorest in Asia. It is still reliant on foreign aid, with donor support totaling approximately 25 percent of the government’s budget in 2016. Despite the strong performance of the garment, tourism, and construction/real estate sectors, Cambodia remains an agrarian country.

Since Cambodia became the first least-developed country (LDC) to join the World Trade Organization (WTO) in 2004, trade has steadily increased. The United States is Cambodia’s largest single-country export destination. In 2015, approximately 25 percent of Cambodia’s total exports reached the United States – primarily garment and footwear products. In 2016, Cambodian exports to the United States were valued at $2.81 billion and U.S. exports to Cambodia totaled $361 million. The United States and Cambodia are signatories to a 2006 Trade and Investment Framework Agreement (TIFA) to promote greater trade and investment in both countries and to provide a forum for addressing bilateral trade and investment issues. In February 2016, the third TIFA meeting was held in Phnom Penh. The United States and Cambodia began exploratory discussions on a Bilateral Investment Treaty (BIT) in May 2013, but the Cambodian government has not yet officially indicated interested in negotiating a BIT. Cambodia is also a member of the Association of Southeast Asian Nations (ASEAN) and the Asia Free Trade Area (AFTA).

Market Challenges

Significant challenges to doing business in Cambodia commonly cited by the private sector include weak rule of law, poor infrastructure, high energy costs, corruption, and under-developed human resources. Disputes over land rights and limited enforcement of intellectual property rights, including the sale of counterfeit and pirated products, also remain major concerns for U.S. companies.

Market Opportunities

Cambodia offers potential business opportunities in agribusiness and food processing; tourism infrastructure and resorts; education; architecture, construction, and engineering services; household goods and appliances; used cars and automotive parts; power generation equipment and power transmission infrastructure; fast food and beverage franchises; pharmaceuticals; and medical supplies and equipment.

Market Entry Strategy

Working with a local partner, such as an agent or distributor, is the most effective way to reach Cambodian consumers. A local partner can facilitate and expedite market entry through market knowledge and established networks. In Cambodia, personal relationships can be the key to successful business transactions.Source: 2016.export.gov

Is Cambodia good for shopping?
Cambodia is a country rich in both tradition and culture. One always tends to dig in to take home the best possible souvenir as a memory of traveling to a certain place, and the Cambodian markets offer just that at pocket-friendly rates. This makes shopping in Cambodia the experience of a lifetime.

Are things cheap in Cambodia?
For an entire home or apartment, expect to pay closer to $30 USD per night. Food – Food is very cheap in Cambodia. Local street vendors will cost you about $1-2 USD per meal, and basic restaurant meals will cost between $3-5 USD. Western meals at nice restaurants go between $5-15 USD per person.

How much do I need to retire in Cambodia?
A single person can retire comfortably on about $1,250 a month, while a couple will spend about $2,000, according to the website. While that is great news for those on a small budget, it can also mean some luxuries as well.

Does Cambodia have a retirement visa?
Those who wish to retire in Cambodia must apply for a Cambodian E-class visa at the airport upon arrival at Phnom Penh, Siem Reap, or Sihanoukville airports. … People aged 55 and up can get this visa. There have been such visas issued to younger applicants, but this requires more paperwork.

Can US citizens retire in Cambodia?
You must have documentation of retirement in the United States and proof of funds to sustain your stay in Cambodia. You must also be 55 or older and may no longer be employed to qualify for this visa.

Is Cambodia a good place to live?
It is one of the best places in Asia to live as an expat. Over 100,000 expats are currently residing here, and life is good!

Is Cambodia safe for expats?
Cambodia is safe. Of course, like anywhere else in the world, crime happens and expats should be wary of bag snatches, which are a common occurrence, especially before major public holidays when Cambodians are expected to return to their homeland with stacks of cash for the family.

How much money do I need to move to Cambodia?
If you’ll be living in a city, plan on spending another $200 a week on food, transportation, and entertainment. If you’re willing to live quite frugally (and you aren’t planning on getting sauced every night), you can live on $600 or $700 a month in Phnom Penh or Siem Reap, but it won’t be nearly as much fun.

How much does a house in Cambodia Cost?
Single Unit Apartments
Housing Spaces price for rent Inside the City in average
Studio Apartment $250 to $500
Single Unit Apartment 1 Bedroom $650 to $800
Single Unit Apartment 3 Bedroom $1,200 to $1,500
Villa for Rent 3 Bedrooms $1,500 to $2,000