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Category: Money

Explore opportunities to boost your income in Cambodia with Angkor Times. From insightful blogs on starting a business, investing, and making money online, to updates on the latest trends in startups and SMEs in Cambodia, this category offers practical tips and strategies to help you succeed in the Cambodian market. Stay informed and take your financial journey to the next level.

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Angkor Times
Angkor TimesExperienced
Asked: November 8, 2023In: Money, Travel

Why Is Modernizing Cambodia’s Rail Network a Game-Changer for Economic Growth?

Advancing Cambodia’s Railways for Enhanced Economic Growth Prime Minister Hun Manet’s recent call to expedite upgrades to the Phnom Penh to Preah Sihanouk railway line marks a significant step towards enhancing Cambodia’s transportation infrastructure. In his effort to boost the country’s ...Read more

Advancing Cambodia’s Railways for Enhanced Economic Growth

Prime Minister Hun Manet’s recent call to expedite upgrades to the Phnom Penh to Preah Sihanouk railway line marks a significant step towards enhancing Cambodia’s transportation infrastructure. In his effort to boost the country’s economic growth, Manet suggested increasing the maximum speed on this line to 80km/h, aiming to facilitate the transportation of goods and provide numerous benefits to the nation.

Railway station in Phnom Penh in 2020 by Heng Chivoan
Railway station in Phnom Penh in 2020 by Heng Chivoan

While this initiative mainly focuses on improving logistics, the railways offer a host of advantages that extend beyond transportation speed and cost.

Environmental Sustainability: One of the most compelling benefits of railways is their environmental friendliness. Trains are more energy-efficient and produce fewer carbon emissions per ton-mile than trucks. By encouraging the use of railways for transporting goods, Cambodia can reduce its carbon footprint and contribute to a greener future.

Reduced Road Congestion: Upgrading the railway system will help alleviate road congestion, especially on critical routes like the Phnom Penh to Preah Sihanouk line. This not only results in smoother road traffic for commuters but also reduces wear and tear on the road infrastructure, leading to lower maintenance costs.

Safer Transportation: Railways are inherently safer than highways, as train accidents are relatively rare compared to road accidents. By promoting the use of trains for transporting goods, the government can enhance overall safety and reduce accidents on the road, resulting in fewer casualties and property damage.

Cost Savings: Rail transport is often more cost-effective than road transport for the carriage of heavy and bulk goods. The reduced need for labor, lower fuel consumption, and minimized wear and tear on vehicles can lead to considerable cost savings for businesses and consumers alike.

Job Creation: Investing in railway infrastructure and upgrading existing lines can create employment opportunities in construction, maintenance, and rail operation. This boost in employment can help improve the livelihoods of many Cambodians and stimulate local economies.

Economic Integration: A well-connected railway network can foster economic integration by facilitating the efficient movement of goods and people across the country. This, in turn, can attract foreign investment and bolster Cambodia’s position as a regional trade hub.

Tourism Development: Improved rail connectivity can enhance the appeal of Cambodia’s tourist destinations. Travelers prefer the convenience and scenic routes that railways often offer, attracting more tourists and boosting the tourism industry.

Regional Connectivity: Cambodia’s railways can play a pivotal role in connecting neighboring countries and promoting regional trade. It can serve as an essential part of the ASEAN railway network, opening up new trade routes and economic opportunities.

Prime Minister Manet’s vision of an integrated transportation system that includes railways holds immense potential for Cambodia. While addressing the need to expedite studies into upgrades to the Phnom Penh to Preah Sihanouk railway line, it’s essential to recognize the broader benefits that railways bring to the nation. By investing in railway infrastructure and modernization, Cambodia can foster economic growth, protect the environment, improve safety, and enjoy numerous other advantages that will shape the country’s future for the better.

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Angkor Times
Angkor TimesExperienced
Asked: November 8, 2023In: Money

What’s behind the astonishing rise of consumer credit to $14.93 billion in Cambodia, and how are potential financial storms brewing on the horizon?

“Breaking Records and Tides: Cambodia’s Consumer Credit Soars to $14.93 Billion in Q3, but Storm Clouds Loom” In the ever-expanding world of Cambodian consumer credit, the third quarter of 2023 was nothing short of a blockbuster. The total outstanding loan balance ...Read more

“Breaking Records and Tides: Cambodia’s Consumer Credit Soars to $14.93 Billion in Q3, but Storm Clouds Loom”

In the ever-expanding world of Cambodian consumer credit, the third quarter of 2023 was nothing short of a blockbuster. The total outstanding loan balance surged to a jaw-dropping $14.93 billion. It’s a financial crescendo that leaves you in awe, but as the numbers rise, so do the risks. A staggering 20% hike in overdue payments from July to September, reaching a concerning 4.71%, is a stark reminder that this financial high-wire act isn’t without its challenges, as revealed by the data from the Credit Bureau of Cambodia.

Consumer credit, the financial jigsaw made up of personal finance, mortgage loans, and credit cards, continues to be the fuel that keeps Cambodia’s economic engine humming. The overall loan balance may have seen a modest 1.00% uptick from the previous quarter, but it underscores the unshakable confidence Cambodian consumers have in leveraging credit facilities. The number of consumer loan accounts also rose by 1.78%, reaching a grand total of approximately 1.68 million accounts across the country.

But wait, there’s a wave building on the horizon. A concerning trend, like the rumble before a storm, is the increase in the ratio of 30+ Days Past Due (DPD), which now stands at 4.71%, marking a significant rise from the 3.96% recorded in the second quarter of 2023. This metric, measuring accounts with payments overdue by over a month, is a canary in the credit mine, signaling emerging credit risks and borrowers’ financial stress.

The most significant increase in overdue payments was observed in the Plain region, which saw a whopping 25% escalation, followed by the Tonle Sap, Plateau, and Coastal regions. This surge in late repayments suggests a potential ripple effect that could cast a shadow over the overall financial sector if this trend persists.

Now, as the seas grow rough, it’s fascinating to see the way loans are distributed. Mortgage loans, representing just 12.04% of the total number of loan accounts, account for over half of the total outstanding balance, revealing a substantial average loan size in the property sector. On the flip side, personal finance loans, making up a hefty 79.80% of loan accounts, represent just under 44% of the total loan balance. It’s a fascinating interplay of numbers in this financial symphony.

Amidst the crescendo of financial data, consumer credit applications soared by 11% overall, underscoring the enduring thirst for credit. The Personal Finance and Credit Card sectors witnessed applications soaring by 16% and 25%, respectively, showcasing consumers’ appetite for financial flexibility. In contrast, Mortgage Applications took a 29% dip, signifying a shift in consumer borrowing preferences.

Mr. Oeur Sothearoath, CEO of CBC, shed light on the situation, saying, “The demand for consumer credit in terms of both the number and amount of applications has increased. Consumer credit performance was positive in terms of both the number of loan accounts and loan balance this quarter.” However, he sounded a cautionary note, pointing out that “loan quality dropped with an increase in the 30+ DPD ratio from 3.96% in the second quarter of 2023 to 4.71% in this quarter.”

The final act of 2023 and the first half of 2024 will be pivotal in deciding whether this financial opera can continue its symphonic growth while ensuring the financial well-being of its performers – the borrowers. It’s a delicate balancing act, one that will be pivotal in maintaining Cambodia’s economic stability and growth. As the curtain rises on this critical chapter, the question remains: will Cambodia’s economy continue to hit the high notes, or will the rising tides of overdue payments wash ashore, causing a different kind of credit crisis?

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Angkor Times
Angkor TimesExperienced
Asked: November 7, 2023In: Money

How Will DEFA Impact Small Businesses in the ASEAN Region?

Cambodia Takes the Lead in Digital Economy as ASEAN Negotiates DEFA Deal As ASEAN launches negotiations for the world’s first regional Digital Economy Framework Agreement (DEFA), Cambodia stands out as a key player in promoting digital corridors within the region. The ...Read more

Cambodia Takes the Lead in Digital Economy as ASEAN Negotiates DEFA Deal

As ASEAN launches negotiations for the world’s first regional Digital Economy Framework Agreement (DEFA), Cambodia stands out as a key player in promoting digital corridors within the region. The ambitious initiative was launched during the ASEAN Economic Ministers (AEM) meeting held in Semarang, Indonesia, and seeks to pave the way for the integration of digital trade and digital payments in Southeast Asia. DEFA’s potential impact is substantial, with the successful implementation expected to double the value of the regional digital economy to $2 trillion by 2030, a goal that some experts consider challenging due to the tight timeline set for negotiations.

Cambodia Takes the Lead in Digital Economy as ASEAN Negotiates DEFA Deal
Cambodia Takes the Lead in Digital Economy as ASEAN Negotiates DEFA Deal

ASEAN member states have made significant headway in bilateral digital economy cooperation through arrangements such as cross-border payment agreements. These smaller-scale initiatives, like bilateral Digital Economy Agreements (DEAs), are guiding the development of DEFA provisions on a regional scale. The commitment and momentum displayed by ASEAN Member States (AMS) to move forward with DEFA negotiations are evident, and there is optimism regarding the prospect of DEFA becoming a reality.

Cambodia plays a vital role in expanding digital economy cooperation, having finalized cross-border payment agreements with neighboring countries like Thailand and Laos, with plans for similar agreements with Vietnam and other nations beyond the region. These cross-border payment agreements enable Cambodians to make digital payments for goods and services using KHQR, the universal QR code for Cambodian commercial banks and financial institutions, facilitating remittances and cross-border money transfers. The Director General of Central Banking at the National Bank of Cambodia (NBC) also envisions establishing cross-border digital payment corridors with countries like China, India, Japan, and Malaysia in the near future, with negotiations underway for agreements with Indonesia and Morocco.

Cambodia’s government and the NBC have prioritized promoting digital payments, recognizing their positive impact on social and economic development, as well as facilitating remittances from migrant workers. The adoption of digital technologies has accelerated due to healthy competition among Cambodian banks.

The digitalization of trade documents, such as the ASEAN Single Window and electronic Certificate of Origin form, aims to reduce transaction time, costs, and promote international trade, particularly benefiting small and medium-sized enterprises (MSMEs). These initiatives provide a platform for AMS to learn from best practices and exchange information on relevant topics, promoting seamless cross-border trade within the region.

DEFA covers nine core elements, including digital trade, cross-border e-commerce, cybersecurity, digital identities, digital payments, cross-border data flows, and emerging topics like Artificial Intelligence (AI) governance and ethics. The Framework for Negotiating DEFA sets the stage for discussions and negotiation processes. Thailand chairs the ASEAN DEFA Negotiating Committee, with participation from all ten AMS, and negotiations are set to conclude by 2025, with meetings scheduled for 2023, 2024, and 2025.

The ASEAN Digital Integration Index (ADII) assesses digital readiness and logistics in the region. Different levels of readiness among member states are observed, with some ready for DEFA implementation while others require support. Challenges related to data protection and cybersecurity need to be addressed to ensure a smooth transition to the digital economy, considering the varying regulations and practices related to data protection across borders.

Cambodia’s active role and experience in bilateral agreements position it as a key player in the ASEAN Digital Economy Framework Agreement (DEFA) negotiations, holding the potential to significantly impact the regional digital economy. Nevertheless, challenges like data protection and cybersecurity need to be addressed as ASEAN strives to accelerate digital integration and increase the participation of micro, small, and medium enterprises (MSMEs) in the economy.

Recap

Launching the ASEAN Digital Economy Framework Agreement (DEFA)

ASEAN embarks on negotiations for the world’s first regional Digital Economy Framework Agreement (DEFA). Cambodia stands out as a key player in promoting digital corridors within the region.

DEFA’s Potential Impact

DEFA’s successful implementation could potentially double the regional digital economy’s value to $2 trillion by 2030. Ambitious timeline set for DEFA negotiations, aiming to complete them by 2025.

Leveraging Bilateral Agreements

ASEAN member states have made headway in bilateral digital economy cooperation, such as cross-border payment agreements. Smaller-scale initiatives, like bilateral Digital Economy Agreements (DEAs), guide the development of DEFA provisions.

Cambodia’s Expanding Role

Cambodia actively participates in cross-border payment agreements with neighboring countries and plans to expand to more nations. The use of KHQR (universal QR code) facilitates digital payments, remittances, and cross-border money transfers.

Prioritizing Digital Payments

Cambodia’s government and National Bank are committed to promoting digital payments to boost social and economic development. Competition among Cambodian banks accelerates the adoption of digital technologies.

Beyond Payments: ASEAN Single Window

Initiatives like ASEAN Single Window and electronic Certificate of Origin form enhance trade among member states. The digitalization of trade documents aims to reduce transaction time, costs, and promote international trade, especially for MSMEs.

Core Elements of DEFA

DEFA covers nine core elements, including digital trade, cross-border e-commerce, cybersecurity, digital identities, digital payments, cross-border data flows, and emerging topics like AI governance and ethics. The Framework for Negotiating DEFA sets the stage for discussions and negotiation processes.

DEFA Negotiation Timeline

Thailand chairs the ASEAN DEFA Negotiating Committee, with participation from all ten ASEAN member states. Negotiations are scheduled to conclude by 2025, with meetings set for 2023, 2024, and 2025.

Digital Integration and Challenges

The ASEAN Digital Integration Index (ADII) assesses digital readiness and logistics in the region. Different levels of readiness among member states, with some ready for DEFA implementation, while others require support.

Data Protection and Cybersecurity

Cross-border data flow presents challenges related to privacy and data protection regulations. Stakeholders urged to create cybersecurity awareness and develop a more robust data protection framework.

Financial Inclusion and KHQR

Digital payment initiatives contribute to increased financial inclusion in Cambodia. The KHQR system records substantial transactions, supporting Cambodia’s digitalization goals.

In Conclusion

Cambodia’s active role and experience in bilateral agreements position it as a key player in the ASEAN Digital Economy Framework Agreement (DEFA) negotiations.

DEFA’s potential impact is significant, with the goal of doubling the regional digital economy’s value by 2030.

Challenges like data protection and cybersecurity need to be addressed to ensure a smooth transition to the digital economy.

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Angkor Times
Angkor TimesExperienced
Asked: November 3, 2023In: Money

What Role Does Public Debt Play in Fostering Infrastructure-Led Economic Growth in Cambodia?

How Cambodia’s Public Debt Has Contributed to Economic Development through Infrastructure Growth During a gathering with garment workers in Takmao city, Kandal province, Prime Minister Hun Manet emphasized that Cambodia’s public debt has played a vital role in advancing the country’s ...Read more

How Cambodia’s Public Debt Has Contributed to Economic Development through Infrastructure Growth

During a gathering with garment workers in Takmao city, Kandal province, Prime Minister Hun Manet emphasized that Cambodia’s public debt has played a vital role in advancing the country’s economic development. He stated that public debt in Cambodia has been a driving force behind economic growth, primarily through the construction of essential physical infrastructure, which has subsequently contributed to the nation’s overall economic progress.

How Cambodia's Public Debt Has Contributed to Economic Development through Infrastructure Growth
How Cambodia’s Public Debt Has Contributed to Economic Development through Infrastructure Growth

The Prime Minister stressed the responsible and deliberate manner in which the country borrows funds for the common good, ensuring that they are invested in public assets for the benefit of the nation. He reiterated that this statement was made in response to unfounded criticisms regarding Cambodia’s level of public debt.

As of the end of the first half of the year, Cambodia’s public debt amounted to $10.72 billion, as reported by the Ministry of Economy and Finance. Notably, the country’s public debt remained at a low-risk level.

The report revealed that the majority of the public debt, 64 percent, was acquired through borrowings from bilateral development partners, with the remaining 36 percent coming from multilateral development partners. A minimal portion, 0.43 percent, constituted public domestic debt.

China emerged as Cambodia’s principal concessional loan provider among bilateral partners, contributing $4.08 billion, which represented 38.2 percent of the total public external debt. Japan and Korea followed with $1.13 billion and $528 million, respectively. For multilateral loans, Cambodia’s borrowings from the Asian Development Bank reached $2.22 billion, while the World Bank provided $1.26 billion. Notably, these loans were highly concessional, with an average grant element of approximately 42 percent.

Despite challenges like the Covid-19 pandemic and other external factors, Cambodia’s public debt situation continued to be sustainable and low-risk, as affirmed by the Ministry of Economy and Finance.

Looking ahead to 2023, the government planned to raise $200 million through bond issuance, a move intended to generate direct revenue and ensure the efficiency and sustainability of debt management. In 2024, the Government of Cambodia is also preparing to raise $108 million through government bond issuance, with these funds earmarked for financing infrastructure expenses and servicing the principal and interest of previously issued bonds, as outlined in the Ministry of Economy and Finance’s draft national budget law for 2024.

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Angkor Times
Angkor TimesExperienced
Asked: November 3, 2023In: Money

What Drove Angkor Park’s Remarkable Revenue Surge in 2023?

In 2023, the revenue generated by Angkor Park witnessed a remarkable surge, with over 600,000 international tourists purchasing tickets to explore the Angkor Archaeological Park within the first ten months of the year. This surge in visitor numbers led to ...Read more

In 2023, the revenue generated by Angkor Park witnessed a remarkable surge, with over 600,000 international tourists purchasing tickets to explore the Angkor Archaeological Park within the first ten months of the year. This surge in visitor numbers led to a substantial boost in revenue for Angkor Enterprise, the state entity responsible for overseeing ticket sales, with the total revenue nearing $28 million. This figure represents an astounding increase of over 300% when compared to the same period in 2022.

The data outlined in the November 1 report reveals that 602,570 foreign tourists graced the Angkor Park with their presence between January and October, contributing to total ticket sales of $27.88 million. When compared to the corresponding period in the prior year, there was a notable 255.82% increase in visitor numbers and an even more impressive 312.35% rise in revenue. These statistics underscore the growing popularity of this archaeological treasure in Cambodia.

Furthermore, Angkor Enterprise diversified its revenue streams by accumulating $590,948 from ticket sales at the Koh Ker archaeological site. This site, another UNESCO World Heritage Site, served as the capital of the Khmer Empire between 921 and 944 CE and is located in the neighboring Preah Vihear province. Additionally, Angkor Enterprise generated revenue from the Chong Kneas floating village in Siem Reap, with ticket sales reaching values of $149,010 and $441,938, respectively.

Kong Sambath, the vice-president of the Cambodia Chinese Tour Guide Association (CCTGA), noted that despite the waning concerns related to Covid-19, the influx of tourists to Siem Reap’s temples has not yet matched the pre-2020 levels. Nonetheless, he remains optimistic about future growth. Sambath anticipates that the upcoming inauguration of the new Siem Reap-Angkor International Airport (SAI) and diplomatic visits by Cambodian officials, particularly to China, will further boost tourist numbers. As a tour guide, he holds hope that these diplomatic interactions, particularly with China, will play a pivotal role in amplifying the number of tourists visiting Cambodia.

Khieu Thy, president of the Khmer Angkor Tourist Guide Association, observed that while there has been a steady increase in visitors to Siem Reap’s temples, the global economic crisis has cast a shadow on the rate of growth. This crisis has impacted potential tourists’ disposable income, emerging as a new challenge for travelers. Though travel restrictions have eased in comparison to the years 2020-2022, financial constraints have become a prevailing concern for those considering a visit to the region. However, Thy expects a positive shift in the fourth quarter, traditionally a busy period for the province.

For reference, it’s worth noting that in 2022, Angkor Enterprise reported earnings of $11,783,916 from foreign visitor ticket sales. This figure included a breakdown of $11,528,158 from the Angkor Archaeological Park, $90,450 from Koh Ker, and $165,308 from Chong Kneas. This context serves as a reference point to understand the significant increase in revenue in 2023.

The year 2019 marked a milestone with a record number of tourists, welcoming over 6.6 million arrivals and leading to ticket sales that surpassed an impressive $80.7 million.

Established in 2016, Angkor Enterprise operates under the technical guidance of the tourism ministry and the financial guidance of the Ministry of Economy and Finance. The entity’s revenue sources extend beyond the Angkor park, encompassing ticket sales for the Koh Ker temple complex and boat tickets at the Chong Kneas floating village.

The ticketing structure for the Angkor park features three tiers, catering to different visitor preferences and durations of stay. These include one-day passes priced at $37, three-day passes at $62, and seven-day passes at $72. This tiered pricing system allows visitors to choose the option that best suits their exploration plans within the park.

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