PHNOM PENH – Prime Minister Hun Manet has affirmed that local and foreign investors will receive extensive incentives beyond investment law, encouraging them to invest in agriculture, agro-industry and tourism in four northeastern provinces. 

The PM spoke of the policies during the launch of a program to promote investment in Kratie, Stung Treng, Mondulkiri and Ratanakiri.

All have great potential, thanks to a favorable climate, natural resources, forests and wildlife sanctuaries which have also transformed them into potential natural tourism and eco-tourism destinations.

“What we need to focus on now is how to transform these four northeastern provinces into independent economic poles, with development levels comparable to other provinces,” Hun Manet said while launching the programme for 2025 to 2028. 

“To achieve this, the three priorities include people, economic activity and connectivity.”

Hun Manet said the program stands out due to its extensive incentives that go beyond the current investment law. It also expands the scope of support beyond Qualified Investment Projects (QIP) in the priority sectors, including general sectors and QIP. 

Acknowledging financial challenges, he said the government has allocated funds to launch financing programs at reasonable interest rates, primarily targeting small and medium enterprises (SMEs), modern agricultural communities and tourism communities. 

“These programs will be implemented through the Agricultural and Rural Development Bank and the Small and Medium Enterprise Bank,” he added. 

While noting the shortage of human resources in the agricultural and agro-industrial sectors in these provinces, the government has decided to exempt payroll taxes for workers earning 2,000,000 riel or less per month who are employed by QIP-registered companies operating in these four provinces.

“I hope this special program will contribute to boosting economic activity in these northeastern provinces, but it requires close collaboration between the public and private sectors,” he said.

He also urged the provincial governors to carefully plan zoning, ensuring that industrial factories are built separately and at a distance from natural tourism destinations.

Most importantly, he called for greater attention to security and public order, especially online crime.

“The growth of these four provinces does not depend on online crimes, so we must continue progressing without relying on them. We need to encourage investment in real sectors, avoiding any involvement in illegal activities,” he said.

The government has also announced a 12-year exemption on income tax, prepayment of income tax and minimum tax for investments in agriculture, agro-industry and tourism in these provinces.

Priorities for tax exemption include the development of special tourist areas, eco-tourism sites, zoos, resorts, hotels, parks and sports facilities.

Regarding the tax exemption, Ministry of Economy and Finance spokesperson Meas Soksensan said the government aims to redirect investor attention to regions that have long been overlooked, despite their high potential.

“We expect that through this special programme, both local and foreign investors will take full advantage of the opportunities to promote positive economic growth in these northeastern provinces, which are currently distant from the country’s central economic hubs,” Soksensan said.

According to a 2023 report from the Ministry of Agriculture, Forestry and Fisheries, Mondulkiri, Ratanakiri, Stung Treng and Kratie collectively have more than 560,000 hectares of land with high potential for agricultural development. 

Figures from 2023 show that key crops includes more than 17 tonnes of rubber, more than 180,000 tonnes of cashew nuts, more than 2.8 million tonnes of cassava and more than 250,000 tonnes of robusta bananas.

Lay Sopheavotey contributed to the story.