Population (2020)1: 16.8 million
GDP (2020)1: USD $26.32 billion
World Bank “Ease of Doing Business” Rank (2018): 144
1 World Bank, 2020
Cambodia’s economy has sustained an average real growth rate of 7.7% between 1998 and 2019, largely driven by an expansion in agriculture, construction, garment manufacturing, real estate, and tourism sectors2.
Given a population size of 16.8 million and rapidly evolving business landscape, there is much potential for Singapore businesses to leverage Cambodia’s growth and development and seek out opportunities, especially in the areas of consumer and retail, digitalisation, education, healthcare, and tourism.
2 Moody’s Analytics, 2020
In terms of physical connectivity, there has been growth in the logistics and transport solutions sector, and demand is expected to rise further. Approved in 2020, Cambodia’s Interim Master Plan on Intermodal Transport Connectivity and Logistics System3 strengthens the country’s connectivity with broader intra-regional trade flows, particularly among the Mekong countries and Southwestern China, hence contributing to its long-term economic growth.
Logistics is a priority sector for Cambodia to achieve its target of being an upper middle-income country by 2030 and high-income country by 20504. YCH Logistics, a Singapore company has been chosen by the Cambodian government to develop the new Phnom Penh Logistics Centre (PPLC), an integrated port and logistics operations centre that serves as an intermodal transit centre, startup hub and training academy to develop Cambodia’s local human capital in the logistics sector5.
As Cambodia develops into an export-driven economy, there is a strong need for the country to develop its connectivity infrastructure to further enhance the flow of goods around the country.
In addition to developments in physical connectivity, Cambodia is also shifting towards becoming a digital economy. Over the past two decades, mobile operators have expanded their coverage to rural areas, with 52.6% of the population having access to internet connection in 20216. COVID-19 provided the catalyst for businesses to digitalise and move online onto e-commerce platforms and social media, such as Telegram, which in turn generates opportunities for businesses as consumers move online to purchase goods. Rapid growth in Cambodia’s e-commerce sector highlights opportunities for Singapore companies with unique digital solutions in advertising, digital media, digital marketplaces, e-commerce, fintech (digital payments, peer-to-peer lending), and other development services.
This digital shift has also resulted in the adoption of digital tools and solutions across multiple sectors including agriculture, education, logistics – to enhance data monitoring and business efficiency.
3 Ministry of Public Works and Transport, 2017
4 World Bank, 2021
5 Port Calls Asia, 2021
6 Datareportal, Digital 2021: Cambodia, 2021
Cambodia has one of the youngest populations in Southeast Asia, with a median age of 25.6 years7 and approximately 69% of the population under the age of 358. This translates into a large pool of manpower that Singapore businesses can access when expanding their business to Cambodia. The younger generation of Cambodian business owners have a global mindset and are open to working with foreign companies, including Singapore companies.
With Cambodia’s slew of business-friendly policies and incentives for investors, many Singapore companies have ventured in-market to establish their businesses.
7 Statista, 2021
8 CBRE Cambodia, 2020
The Cambodian government has enacted investor-focused policies providing incentives to foreign companies with few restrictions on imports. These include 100% foreign ownership of companies, a “Qualified Investment Project” tax exemption for up to nine years, duty-free import of capital goods, and no restrictions on capital repatriation9.
9 Santander, 2021