Doing Business in Cambodia Phnom Penh. Cambodian Foreign Trade

 Educational level: Continuing education / Executive education programs.

Course summary (Doing Business in Cambodia)

The Kingdom of Cambodia is situated in Southeast Asia, bordering the Gulf of Thailand, Thailand, Laos, and Vietnam. 90% of Cambodia's population is ethnically Cambodian. Theravada Buddhism is the religion of 95% of the population. Phnom Penh (2 million people) is the economic and political center of Cambodia.

The country is a member of most major international organizations, including the United Nations and its specialized agencies, and became a member of the Association of Southeast Asian Nations (ASEAN) in 1998.

Cambodia is a member of the World Bank, the International Monetary Fund, and the Asian Development Bank (ADB). On October 13, 2004, Cambodia became the 148th member of the World Trade Organization (WTO).

Over the last decade of peace and stability, Cambodia has achieved high economic growth at an average of 9.4% per annum. Economic growth reached 10.6% per annum over the last 5 years. Manufacturing output is concentrated in the garment sector, and garments dominate Cambodia's exports, especially to the United States. The service sector is heavily concentrated in trading activities and catering-related services.

According to the data from the Customs and Excise Department showed in third quarter 2010, the total value of import increased by 21.03% -from 1.990 to 2.409 billion riels, compared to the same last year’s. Total value of export amount 1.045 million dollar, an increased by 30.04% -from 804 million dollars, compared to same period last year.

- Main exports products: garments, shoes, cigarettes, natural rubber, rice, pepper, wood, fish.
- Major export partners: United States, Germany, U.K., Singapore, Japan, Vietnam
- Main imports: fuels, cigarettes, vehicles, consumer goods, machinery.
- Major import partners: Thailand, Singapore, China, Hong Kong, Vietnam, Taiwan, United States.
- Economic aid received: $989 million in grants or concessional loans were disbursed in 2009. Major donors: Asian Development Bank (ADB), UN Development Program (UNDP), World Bank, International Monetary Fund, Australia, Canada, China, Denmark, the EU, France, Germany, Italy, Japan, Sweden, Thailand, the U.K., and the U.S.

Cambodia has opened its economy for Foreign Direct Investment (FDI) in all sectors including banking, insurance and telecommunications. Unlike in other countries, investors in Cambodia are allowed to control 100 per cent of the shareholding, without local participation requirement. Principal foreign commercial investors: Korea, China, Russia, Thailand, the U.S., and Vietnam.

The Royal Government has approved a total of 21 Special Economic Zones (SEZs) located along the border with Thailand and Vietnam (Koh Kong, Poipet, Savet, Phnom Den), at Sihanoukville and Phnom Penh. Of the 21, 6 have commenced operations. Businesses within the SEZs benefit from a number of fiscal incentives, including income tax, customs, and VAT benefits.

The Cambodia General Deparment of Customs and Excise (GDCE) was established in 1951. The operations of the GDCE were suspended from 1975 to 1979 during the Khmer Rouge regime. It resumed operations on 13 August 1979 under the guidance of the Ministry of Commerce, and was transferred to the Ministry of Economy and Finance (MEF) by sub-decree. The GDCE became the 155 th member of the World Customs Organization (WCO) in June 2001. Tariff structure was changed in 2001 when the number of tariff bands was reduced from 12 to 4 and the maximum rate dropped from 120% to 35%, thus narrowing the spread.

The Sihanoukville Autonomous Port (PAS) is the sole international and commercial deep seaport of the Kingdom of Cambodia. PAS is strategically located in a geographically ideal point of the deep water area of Cambodian coast line which connects Cambodia to other major world-class ports positioned on Asia/Pacific trade routes.

International Economic Relations. Cambodia is member of: Association of Southeast Asian Nations (ASEAN) - ASEAN Economic Community - ASEAN Free Trade Area (AFTA), Mekong Economic Cooperation Strategy (ACMECS), Mekong River Commission (MRC), Boao Forum For Asia (BFA), Asia Cooperation Dialogue (ACD), Asia - Middle East Dialogue (AMED), Asia-Europe Economic Meeting (ASEM), Forum for East Asia-Latin America Cooperation (FEALAC), Asian Development Bank (ADB), Economic and Social Commission for Asia and the Pacific (ESCAP)

Cambodia has Free Trade Agreements (FTAs of ASEAN) with: Australia New Zealand, Canada, China, India, European Union, Japan, Korea, Russia, US, Pakistan.  Is beneficiary of EU's Generalised System of Preferences (GSP)