• Economics

Cambodia Approves Nearly $600 million investments in Preah Sihanouk Province

• By Ou Sokmean
• and Meng Seavmey
• March 2, 2024 3:30 PM

PHNOM PENH — The Council for the Development of Cambodia (CDC) has approved two projects worth nearly $600 million and funded by U.S. investors in Preah Sihanouk province.

According to information on the provincial administration’s Facebook page on Feb. 28, one project will consist of the construction of a five-star hotel by the Ban Dao Investment Co. Ltd. The 2,870-room hotel, whose cost is estimated at $574 million, will be located in Sangkat Lek IV in Sihanoukville.

The second project will consist of building a fruit processing factory in Kampong Seila district and commune. The Haoruidar (Cambodia) Co., Ltd will invest more than $12 million in the factory where will be processed a variety of fruits including mango, pineapple, jackfruit and durian, according to the Preah Sihanouk province information.

During their meeting on Feb. 28, the CDC and the provincial Sub-Committee on Investment agreed on the investment terms and supports for fiscal, non-fiscal and other tax incentives.

Both projects will significantly contribute to the economy of the province and the country as a whole, the committee said, according to the information on Facebook.

Hong Vannak, an economist and researcher at the Royal Academy of Cambodia’s International Relations Institute, believes that the investments from U.S. investors will indeed affect the country positively in a long run because U.S. investments are long-term and resilient.

"U.S. investors will not come to a small state that gives them a small benefit, meaning that the small amount of sale and small market will not attract U.S. investors,” he said during an interview on March 1. "They have to consider many aspects, including the livelihood of the country's people and the political situation.”

Investors must ensure their company’s market and growth when considering a major investment in a country, Vannak said. “Thus far, there are only a few of American major brands in Cambodia,” he said. These include Ford Motor Company, Facebook, Starbucks Coffee Company, and Coca‑Cola Company.

The CDC and Preah Sihanouk Provincial Administration at a meeting on Feb. 28. Photo: Preah Sihanouk Provincial Administration Facebook

Offering tax incentives and benefits for investments in Preah Sihanouk Province

The city of Sihanoukville has been touted as a multi-purpose, new economic region with great potential for both tourism and transportation, Prime Minister Hun Manet said on Jan. 31 in his speech at the Special Programme to Promote Investment in Preah Sihanouk Province 2024 event.

To improve the province’s economy and resolve its problem of unfinished construction projects, Cambodia is offering tax incentives and provides other benefits for investors interested in the province.

Manet has put in place some measures for the investors of unfinished construction projects, completed buildings, and existing projects.

Those measures include three years of tax exemption and tax relief on incomes, and minimum taxes; full value-added-tax (VAT) exemption for building construction, and for finishing or repairing buildings; five years of tax exemption on rental real estate; and property-tax and administrative sanction exemptions.

Among other incentives, investors will receive facilitation when applying for licenses, certificates, and permits for their investments and businesses. The provincial authorities will also create a real estate market, provide investor-matching services including reference pricing for real estate in Sihanoukville, and promote out-of-court dispute resolution for investment-related disputes