ACKNOWLEDGEMENT
DAVID PHAT
After decades of civil war, the economy of
With abundant natural resources, incentive investment law and low labor cost, the investors think
Based on the above-mentioned reasons, I think it is the right time for me to make some contributions to our country and people prior to my departure to the states. Therefore, I determine to spend my valuable spare time from my tight schedule to collect the update information for rewriting Assessment of Cambodian Economy 2nd edition (01-06). My sole objective is only to help the foreign investors and economists realize more about the investment environment in
The information in this book is derived from the following books such as:
| 1 | National Strategic Development Plan (2006-2010) | By Ministry of Planning |
| 2 | Business Guide to --- Chinese version | By Mr. Sun Weiren, Mr. Sun Fei and others |
| 3 | Investment Law & Regulation of | By the Council for the Development of |
| 4 | Cambodian Investment Guidebook (December 2006) | By the Council for the Development of |
| 5 | The Cambodian Investment Challenges in Global Competitiveness | By Dr. Hing Thoraxy (JICA) |
| 6 | | By Economic of |
| 7 | | By Economic of institute of Cambodia (EIC) |
| 8 | Education Statistics of Private Institution 2005~2006 | By Ministry of Education, Youth and Sport |
| 9 | Education Strategic Plan 2004-2008 | By Ministry of Education, youth and Sport |
| 10 | Health Statistics from Ministry of Health 2006 | |
| 11 | The information from CDC, Ministry of Commerce, Ministry of Agriculture, Forestry and Fisheries and Ministry of Finance and Economy etc. | |
| 12 | Other documents and newspapers | |
I would like taking this opportunity to express my sincere gratitude to the following Ambassadors, government officers and entrepreneurs in Cambodia who have fully supported and suggested me lots of valuable opinions:
| 1 | | Minister of Ministry of Information |
| 2 | H.E. Dr. THONG KHON | Minister of Ministry of Tourism |
| 3 | H.E. Dr. PHU LEEWOOD | Secretary General of NIDA |
| 4 | H.E. BUN SAMBO | Advisor to Prime Minister |
| 5 | H.E. Dr. SUON SITHY | Deputy Secretary General of CDC |
| 6 | H.E. YAN TING AI | Former Ambassador of the People |
| | | Republic of |
| 7 | H.E. MASAKI SAITO | Former Ambassador of |
| 8 | H.E. MALCOME LEADER | Former Ambassador of |
| 9 | H.E. GOERGE EDDER | Former Ambassador of British |
| 10 | Mr. NEIL M. MAZO | Lawyer in |
| 11 | Mr. PETER CHIRCH OAM | Managing Director of Asean Focus Group |
| |
| and Writer |
I would like to show my special and sincere thanks to my friends who have fully sponsored and supported me to publish the first edition of Assessment of Cambodian Economy such as:
- Mr. C.W. TSAI
- Mr. HSU, ZHENG-HAO
- Mr. CHEN, TING-HUNG
- Prof. CHEN, CHIH-YUAN
- Mr. YANG, JIM-YUAN
Updated on March 25th, 2007
DAVID PHAT
ASSESSMENT OF CAMBODIAN ECONOMY
The
Cambodia went through many critical developments, the “year zero” from 1975-1979 during which the country was plunged into the darkest pages of its history, facing the disaster and genocide, but people’s expectations are currently high, wanting to move on from poverty and achieve the prosperity and national pride on the international stage.
Since the signing of the Paris Peace Accord in 1991, the reform process has been widened significantly. Until 1992,
Cambodia’s economy experienced quite strong growth between 2000 and 2006; in 2000, GDP 8.4%, in 2001 GDP 7.7%, in 2002,GDP 6.2 %, in 2003, GDP10.00%, in 2004, GDP10.00%, in 2005, GDP 13.4% due to the combination of favorable weather condition and irrigation renovation, sharply increase of construction , garment export and good import and tourism, in 2006 GDP 10.5% According the report of Economic Institute of Cambodia (EIC), the economic growth in Cambodia remains still strong; they had estimated GDP would reach 8.5 % in 2006, but recently Prime Minister Hun Sen had declared the GDP in 2006 surpassed the target and reached 10.5 %. With 9.5 percent average annual growth rate (2000~2006), per capita income is as below; US$
Much of the growth has been driven by garment export, tourism, construction and services. 85 % of population of
There are several bright spots in terms of economic progress which are noteworthy.
First, while external assistance is not something that is permanent or can be taken for grant, it looks as if the chances are good for
Second, there are some very competent people who work behind the scene to craft the institutional framework to run a modern economy.
Third,
The Royal Government has established and implemented many activities to strengthen its economic and public financial management and establish a good governance system including;
| Macroeconomic policy framework management. |
| Improving budget system. |
| Modernization tax system. |
| Developing national auditing system. |
| Privatizing public enterprises. |
| Strengthening state property management. |
Chapter 1 ADMINISTRATION STRUCTURE
KING OF THE
H.E. SAMDECH CHEA SIM PRESIDENT OF THE SENATE H.E. SAMDECH HENG SOMREN PRESIDENT OF THE NATIONAL ASSEMBLY H.E. SAMDECH HUN SEN PRIME MINISTER OF THE ROYAL GOVERNMENT OF
During a free national election by United Nations Transitional Authority in Cambodia (UNTAC) in May 1993,
The king is the Head of State for the life time, he holds the throne but does not hold power (the king reigns but he does not govern). He appoints the Prime Minister and Council of Ministers. The King signs decree of appointment, transfer and dismissal of high civil and military officials, extraordinary and plenipotentiary ambassadors…….etc.
The king also receives the letter of credential from foreign ambassadors. Upon the approval of National Assembly, he signs and ratifies international treaty. In absence of the king, the president of National Senate House assumes the dower as acting Head of State.
In March 1999, the second legislation body called the senate was created. The senate had 61 members. Currently the members of senate have been selected by political parties with representation in the National Assembly and the king. In the future; senators will be elected by the people. The senate has the right to review all laws passed by the National Assembly and to propose its own legislation. However, senate may return any law to the National Assembly for reconsideration if the National Assembly approved the laws a second time. It will come into effect 10 to 20 days after the law is signed by the king.
The National Assembly consists of at least 120 members. National Assembly members were elected by a free and fair election every five years. Candidates must be Cambodian citizens of both sexes, aged at least from 25 years old. National Assembly members stand for re-election. The National Assembly is the only organization to adopt the law. Subsequent to the approval by 2/3 (two/third) about the national budget and state planning, annual treaties, tax or international convention……etc., they have to submit them to the Senate House for the overview and decision.
The Royal Government is the executive organization of the state. It is in charge of overall executive of all national policies. The Prime Minister executes all decisions adopted by the Council of Ministers. He presents the decrees to the king for the signature and also can lead the negotiations of treaties, international conventions, economic and defense cooperation.
NEW
Chapter 2 OVERVIEW OF CAMBODIAN
ECONOMIC PERFORMANCE
At the overview of Cambodian economic performance in 2006, the tourism, garment exportation and construction are growing rapidly. The
With granting MFN from US and GSP from the other 28 countries, the garment industries have been strongly contributed to the domestic export growth in the recent years. The garment and textile are the promising industries in
After joining the World Trade Organization (WTO) on Oct. 13, 2004,
Cambodian economy is reliant on the agriculture which accounts 30.9 % of GDP and provides direct employment 80 % of the labor force. 85 % of the population lives in the rural area. The share of agriculture in GDP has dropped steadily from 45.9 percent in 1994 to 30.9 % in 2005. The average declining rate was approximately 1.70 % annually. For 2006, agriculture growth is expected to increase slightly at about 4 percent after a 16.4 percent increase in 2005. This is mainly due to expected rainfalls and the expansion of cultivated areas.
The industrial sectors expanded gradually compared to stagnated growth in the agriculture. The yearly industrial growth was on average 15 % between 2003 and 2004. It slightly dropped to 4.4 % in 1996 and 6.2 % in 1998 due to the civil war and Asian Financial Crisis. Total merchandize export are projected to reach about US$ 3.4 billions in 2006 up from 2.9 billion in 2005.
The share of service to GDP is steady, approximately 40 percent. The service sector includes transportation, telecommunication; wholesale, retail, hotel and restaurants, tourism, banking, insurance, education and healthcare etc. In short, comparing with the last six years, the successive annual growth is 13 percent on average.
The growth of Cambodian economy will be substantial if the inflation and Riel are stable. After the upward trend in 2004 and 2005,
As for exchange rate, the Riel depreciated about 2 percent to against the US dollar in 2005. The official yearly average rate depreciates 1.9 percent in 2005. Besides US dollars, the Thai bath and Vietnamese Dong are also widely used in Cambodian border provinces in view of the strong border trade activities.
As for the poverty reduction, the poverty reduction was decreased from 43 percent in 1993 to 34 percent in 2005. That means the average poverty reduction is about 1 percent annually. However, if we compare with our neighboring countries,
In
In the public administration reforms, effective human resource management practice such as the capacity building program and enforcement human resource and management information system have been implemented by the government. Consequently, the civil servant’s salary has been increased about 30 percent as the index value raise from US$ 300 to US$
In
The external assistance plays an important role in
Conclusion:
Chapter 3 AGRICULTURE
The agriculture sector is unpredictable because it depends mainly on geographical and weather condition. During 2006, agriculture growth was expected to increase slightly about 4 percent after 16.4 percent increased in 2005 on account of rainfall, expansion of cultivated areas, abundant fish production, continued increase of livestock production, and irrigation renovation. The effective irrigation system and natural resource management are urgent and needed for the agricultural development. The agriculture sector plays an important and main role to the poverty reduction because of the main source of income derived from the agriculture sector.
The share of agricultural sector in GDP was decreased from 45.6 % in 1993 to 30.9% in 2005. Rice remains the most important single agriculture output. Although frequent floods and draught affected rice yield, but the rice production was up 11.6 % with cultivated area increased by only 0.6 %.
While the strict measures were enforced to eliminate the illegal logging activities and to fight against the corruption in forest sector, forest productions were dropped by 32 % in 2004.
For the period of 1994-2005, the private investment in agriculture sector was US$ 182, 468,
1. Land tenure is the main concern that keeps the projects at bay. Most of land conflicts occur when the farmers occupy and build the houses. The land law is not expected to effectively solve the conflict problem unless all parties involved abide by the law and prepared to compromise.
2. Resolving the land issue is very crucial for the development of agriculture and agro-industry. Currently there are many lawsuits concerning land conflict, but the limited capacity of courts resulted in delays.
3. In 2006, the Royal of Cambodian Government established inter-ministries called “National Authority for Land Conflict Resolution”. The authority has been actively functional since its creation.
Rice Output Performance:
Production of rice contributes 15 percent of GDP and accounts for nearly 90 % of the available land area. The yield of rice has been improved from 1.64 metric tones per hectare in 2000 to around 2 metric tones per hectare in 2005 due to the improved irrigation renovation, which compare unfavorably with Thailand (2.1 metric tones per hectare), Philippines (2.7 metric tones per hectare) and Vietnam (3.2 metric tones per hectare) and Taiwan (5 metric tons per hectare). the yield of rice production is gradually increased from
| | 2003 | 2004 | 2005 | 2006 |
| Rice Production | 4,700,000 MT | 4,000,000 MT | 5,700,000 MT | 6,000,000 MT |
Currently, the cultivated areas in
The Royal of Cambodian Government has firmly stated the Royal government will continue its effort in the implement of water policy through conservation, rehabilitation and construction of main canal irrigation system and dam, and to construct additional pumping stations and organize the farmers to participate in the operation and maintenance of small scale irrigation systems for a better water resources management.
In order to promote agriculture products export, a committee chaired by Minister of Agriculture-Forest and Fishery was created on May 23, 2006. The committee is entrusted to promote the export of agriculture products and both quantity and quality must meet international and domestic demand.
Forestry:
Forests are one of
In the past years, The Royal government, private sector, NGOs and the International community have struggled to make progress in Cambodian forestry. On December 31, 1997, The Royal of Cambodian Government imposed bans on exports of unprocessed timber. In the past, imposition of the log export bans has been allowed by ad hoc exemptions to allow exports by special interests. These exceptions encourage continued the illegal logging.
In order to carry out the above-mentioned ban, The Ministry of Agriculture-Forestry and Fishery and the General Headquarter of Royal Armed Forces were ordered to fully cooperate together to control the illegal logging activities.
Livestock:
The livestock is potential income resource for the farmers beside the crop cultivation. The growth rate of livestock production is still moderate in view of the limited capital. For 2006, livestock production is expected to grow at the slower rate, approximately 4.1 percent compared to 5.8 percent in 2005. Based on the current trend, the growth rate of livestock production for next year remains moderate either. The statistic of livestock is as below:
| | Cattle | | Pig | Poultry |
| 2001 | 2,868,827 heads | 626,016 heads | 2,114,524 heads | 15,248,447 heads |
| 2002 | 2,924,457 heads | 625,915 heads | 2,105,435 heads | 16,677,864 heads |
| 2003 | 2,985,416 heads | 660,493 heads | 2,304,248 heads | 16,013,713 heads |
| 2004 | 3,035,400 heads | 680,500 heads | 2,484,250 heads | 16,033,700 heads |
※The above figures are derived from the Ministry of Agriculture, Forestry and Fisheries on
The Royal of Cambodian Government has to make some incentives to farmers; the government should provide farm animals and technical skills to initiate farmers in livestock production.
Fishery:
Fishery in
| | Inland Caught Fish | Marine Caught Fish | Aquaculture Fish |
| 2001 | 135,000T | 42,000T | 17,500 T |
| 2002 | 360,300T | 45,850T | 18,250 T |
| 2003 | 344,800T | 54,542T | 26,300 T |
| 2004 | 250,000T | 42,000T | 33,500 T |
Rubber:
The most important opportunity for developing commercial crop is the rubber. There is scope for increasing the cultivated area from 61,000 hectares to 330,000 hectares. The statistic figure of dry rubber is exported annually as below: 38,653 MT in 2001, 32,704 MT in 2002, 32,489 MT in 2003 and 26,056 MT in 2004. The statistic of the processing rubber is as below: 42,219 MT in 2001, 38,911 MT in 2002, 34,176 MT in 2003 and 30,611 MT in 2004. The cultivated Tapping is the following; 33,590 hectares in 2001, 29,119 hectares in 2002, 29,479 hectares in 2003 and 23,787 hectares in 2004. Privatization of seven states owned and three private plantations are being currently expanded. They provide 28,000 job opportunities for the local people; 68% of them are the rubber cutting workers. The Government also encourages the farmers and private sector to plant the rubbers because the rubber products are also a labor incentive crop
| | 2001 | 2002 | 2003 | 2004 |
| Dry Rubber | 38,653 MT | 32,704 MT | 32,489 MT | 26,056 MT |
| | 2001 | 2002 | 2003 | 2004 |
| Processing Rubber | 42,219 MT | 38,911 MT | 34,176 MT | 30,611 MT |
Tobacco:
Tobacco is a critical factor for
Tobacco field in
Conclusion:
The following is the current main impediments to develop the agriculture in
1. The poor irrigation system.
2. The lack of market information regarding the needs of the farmers, which impedes the efficient distribution of fertilizer and other agriculture inputs.
3. The Royal Government has to develop the human resources to train the creative and professional workforces and provide the legal frameworks and regulations of agriculture.
4. The concerned ministries have to encourage the private sector and foreign investors to invest on agriculture with incentive requirement as stipulated in the Investment Law of Cambodia.
5. Rehabilitate and reconstruct the existing irrigation and drainage system, particular in high poverty incidence areas and along the border areas.
6. Develop and apply measures in flood and draught mitigation and management.
7. Encouraging the private investment in irrigation, drainage and other aspects of agriculture water management.
8. Preparing a comprehensive strategy for agriculture sector.
Chapter 4 TRADE PERFORMANCE
With granting Most Favored Nation (MFN) status from US and Generalized System of Preference (GSP) from 28 countries, the garment industries have been strongly contributed to the domestic export growths in recent years. Until the end of 2005, there were 446 factories, which provided approximately 481, 516 job opportunities for the local people. In 2004, the garment industry shared 14 % in the GDP with 250,000 jobs provided and about one million people received the indirect benefit from this sector. The export of garment products increased 11.6 % in 2005 compared to 24.6 % in 2004. There was an increase of 22 % for the
Total merchandises export including the garment and footwear was increased steadily from US$ 1,571 million in 2001, US$ 1,770 million in 2002, US$ 2,087 million in 2003, US$ 2,589 million in 2004, US$ 2,910 million in 2005 and US$ 3,365 million in. 2006.
Total merchandises import including fuel, vehicles, motorbikes and raw materials was increased steadily from US$ 2,094 million in 2001, US$ 2,361 million in 2002, US$ 2,668 million in 2003, US$ 3,269 million in 2004, US$ 3,928 million in 2005 and US$ 4,740 million in 2006. The main import sources in 2006 were
According to the statistic from Ministry of Commerce, the garment export figure is as below: in 1995 US$ 267,100,000, in 2001, US$ 1.16 billion and in 2005, 2.2 3 billion, 10% increased from 2004, occupying 87% of total export. Between 1995-2005, total garment export is 10.558 billion; the garments export to the United States market US$ 7.464 billion, to European US$ 2.776 billion, occupying the garment export share 70.64% and 26.2% respectively.
2005 Ten Top Trade Partner Countries and Area in
| Country | Export | Import | Percentage |
| U S A | US$ 1,636,660,000 | US$ 36,190,000 | 29.3 % |
| | US$ 540,870,000 | US$ 449,730,000 | 17.0 % |
| | US$ 14,240,000 | US$ 423,639,000 | 7.9 % |
| | US$ 15,220,000 | US$ 290,500,000 | 5.5 % |
| | US$ 4,850,000 | US$ 291,140,000 | 5.3 % |
| | US$ 225,060,000 | US$ 8,650,000 | 4.2 % |
| | US$ 176,780,000 | US$ 46,050,000 | 4.1 % |
| | US$ 46,050,000 | US$ 181,610,000 | 4.0 % |
| | US$ 40,050,000 | US$ 163,166,000 | 3.7 % |
Currently
The Royal Government should introduce some forms of duty drawback mechanism to limit the loss of revenue due to the leakage through re-export. The government has to strictly carry out the Anti Smuggling plan at the border to stop the large scale of smuggling and prevent the corruption. With the incentive investment law and low cost labor, Cambodian Government further encourages the foreign investors to increase Foreign Direct Investment (FDI) and continue to the diversification of economic activities.
Conclusion:
The garment sector is still experiencing a large number of noticeable difficulties as below:
1. The lack of good cooperation between the company and worker
2. The quality of exported products does not fully response to conditions of foreign orders because of the apparently limited skills and timely delivery.
3. Late and insufficient or interrupted orders and high production cost as a result of weak infrastructure and service.
4. High cost of transportation and rather more complicated export procedure.
5.
6. Importing and exporting fees in
7. The more expensive electricity and transportation costs.
CHAPTER 5 TOURISM
The world renowned ANGKOR WAT
From 1994 to the end of 2005, the private investment in the tourist sector consist of 81 projects amounting to US$ 2,351,653,761.59 (or US$ 747,653,685) of these projects were in hotel construction while 22 projects (or US$1,604,000,076 in the tourist resources and center. Due to the rapid growth in the tourism, net revenue generated from tourism is estimated to reach US$ 1.5 billion or 12 percent of GDP in 2006
In order to attract more tourists and whole national profit, Prime Minister, Hun Sen, had announced the open-sky plan and signed an order for the direct flight to Siem Reap from Vietnam, Thailand, Malaysia, Singapore, Hong Kong, Japan, Indonesia, South Korea .because he had said “ the government has to look at the jungle, not just the trees”. That means he does not mind the loss of Royal Air Cambodge, but he needs the whole nation to survive.
The government opens the new entry points for the visitors who arrive by boats in Koh Kong, Sihanouklville and Khoam Samnor in Prey Veng provinces. Due to the stable situation in
Categories of Foreign Visitors:
The foreign visitors to
International Tourists
Transit Tourists
Excursionist Visitors (Same Day visitors)
International Visitors are those who come to
Transit Tourists are those tourists who visit neighboring countries, and arrive in
Excursionist Visitors (Same Day Visitors) are visitors from neighboring countries enter
By Air:
1. Phnom Penh International airport
2. Siem Reap International Airport (Direct flights from the neighboring countries)
3.
By Road:
From
Bavet: located in Svay Rieng province: It is a major point of entry for Vietnamese travelers.
from
Poi Pet located in Banteay Meanchey province. It is a major point Entry for Thai travelers.
Preah Vihear located in Preah Vihear province. Normally, the Travelers visit
By Boat:
From
Cham Yeam located in Koh Kong province.
Currently there are two entry points by air international tourists to the
1. Lao Aviation
2.
3.
4.
5. Silk Airlines
6. Thai International Airlines
7. Southern
8. Dragon Airlines
9. Eastern Airline
10. Jet Stars
11. Eva Air
12.
13. President Airlines
14.
15.
16. Siem Reap Airlines
The number of tourists is as below:
| - 604,918 | 2001 |
| - 786,524 | 2002 |
| - 701,014 | 2003 |
| - 1,005,202 | 2004 |
| - 1,421,615 | 2005 (34.75% increased) |
| - 1,700,041 | 2006 (19.59 % increased) |
| - 2,000,000 | 2007 (estimated number) |
| - 3,000,000 | 2010 (estimated number) |
☆Beautiful beaches located at Kampot/Kep, Sihanoukvile and the northern coast.
☆Angkor complex is composed of Angkor Wat, Angkor Thom, other temples located of Siem Reap province.
☆Museums including National Tuol Sleng and Cheung Ek museums and Independent monument.
☆Floating village at
☆Evening entertainment including disco, night clubs, karaoke, traditional drama and dancing performances, snooker and the restaurants at the riverside.
The tourist facilities include the hotels, accommodation, restaurants, cafes, travel and tour agency, bank and money exchange, shopping, medical and postal facilities.
Restaurants:
There are 778 licensed restaurants in
Hotels and Guest Houses:
There are 125 hotels and 144 guest houses in Phnom Penh, 68 hotels and 153 guest houses in Siem Reap province, 44 hotels and 84 guest houses in Sihanoukville and other provinces 62 hotels and 237 guesthouses. Total 17,000 rooms for hotel in 2006, 14,771 rooms for hotels in 2005, 20% increased. There are 8,954 rooms for guest houses in
The above-mention five stars hotels have the conference center facility with large and medium and interpretation facility. In addition to the conference center, other new large and medium size hotels also provide meeting and banquet facilities.
Tour and Travel Operations:
Over 383 travel and tour companies have been approved in
Bank and Money Exchange:
Banking Services are available in the various banks in
Supermarkets in
Due to rapid growth of the population and economy, there are a large number of modern supermarkets in the capital of
www.thaihuot.com
Conclusion:
Chapter 6 HEALTHCARE
Due to the long civil war, most of the hospital and medical equipment have been utterly destroyed. Most of the doctors and nurses have been killed during the Khmer Rouge regime. Cambodian Red Cross under the leadership of Lok Chumtev BUN RANY HUN SEN has made the great effort to contact the NGOs and the donor’s countries to seek for the assistance for improvement the hospital equipment and medicines and medical training program for the doctors, nurses and midwives etc.
According to the Social Economic Survey, it reveals the poverty of
Only 34 % of Cambodians have access to safe water. The rest of the people rely on the well, rainwater, ponds, or rivers. The water has to be bottled for a long time, using up time, fuel and money. Many Cambodians are stricken by water borne diseases such as diarrheas and typhoid. Due to such illness, children miss school and adults lose out on income. In order to prevent the diseases before it occurs, the Royal of Cambodian Government should provide a source of clean water as well as education on health, hygiene and sanitation because the access to basic sanitation and adequate drink water makes the people healthier and more economically and socially productive. In 2006, Hagar Water Filter Project provided a Bio-San Water Filter (BSF) to each beneficiary, constructing and install 5,000 water filters and 300 latrines and built 20 water systems, increased and improved children on health, sanitation, domestic violence and child right.
Nutrition is also a serious problem in
The government recognizes that the public health system in
They will self-medicate, that means they purchase the medicines from the drug store or traditional healer. An average Cambodian has only 0.35 medical contacts with public health service annually. The main cause of mortality is malaria and tuberculosis. Each year 500,000 cases of malaria occur in
According to the report of UNICEF, the maternal mortality ratio is estimated to be 900 per 100,000 live births. 90 % of deliveries take place at home or in other-non-medical facilities. Only 8 % of births take place in public facilities. During delivery, 34% of women are assisted by doctor, nurse or rained midwife, two-third of women receive the assistance from Traditional Birth Attendants (TBA).
Health indicators related to the access of services, safe water and sanitation are much lower in
Provisions of public health services in
Reduce Child Morality and other improvement:
In these few years, child health has been greatly improved. The child under-five mortality rate is estimated at 82 per 1,000 live births in 2005 compared at 124 in 1998. The target for 2005 was 105. The infant mortality rate is estimated at 66 per 1,000 live births in 2005 compared with its target of 75 in 1998. Such trends are consistent with rapid decline in total fertility rate and the reported increase in immunization, both DPT3 and measles. The proportion of children less than one year immunized against DPT3 increased from 43% in 2000 to 83% in 2005, surpassing the target of 80%. For immunization against measles, the coverage was increased from 41% in 2000 to 85% in 2005. The total fertility has declined from 4.0 % in 1998 to 3.3 % in 2005, surpassing the target of 3.5 %. The married women use the modern birth spacing method through the public sector has increased 20% in 2005. The share of pregnant women with two or more ante-natal care (ANC) from the skilled health personnel in the public sector has increased from 25.4 % to 47%.
As HIV/AIDS, the prevalence rate among adult aged 15-24 has also declined to 2.1 % in 2005 from 2.5 % in 1998. Condom use rate by sex worker was increased from 91% in 2001 to 98% in 2005. The malaria fertility was decreased from 0.4 % in 2000 to 0.36 % in 2005. As for the dengue, the fertility has significantly declined from 1.5% in 2000 to 0.74 % in 2005, surpassing the target of 1%.
Health System Reform:
The Ministry of Health (MOH) faces the problems concerning the poor access and the quality of public health services and a rapid development of the private clinics and hospitals. Due to the low salary, most of the staffs are poorly motivated and have inadequate skill. The hospitals are equipped with out of date health infrastructure.
In order to regain people’s confidence, the Ministry of Health under the supported by the donors has increased lots of new medical access to improve the healthcare for the Cambodian people. At the present, 79 referral hospitals were built and 74 were renovated of 499 of health centers 446 were built and 53 renovated, 5 health posts were built and 8 national hospitals for the nationwide health system. Among them, the most famous one is
According to the report of Ministry of Public Health, there were 2,397 doctors and medical assistants, 6,855 primary and secondary nurses, 2,739 primary and secondary midwives and 23,434 health workers at all levels of Ministry of Health working at municipal and province (districts/commune levels).
As for the private sector, it has been rapidly developed in the unregulated manner. The number of registered private clinics, laboratories and supporting clinic facilities was 330 with 395 beds, they are perceived as having better equipment, more caning and medicines, but are also associated with the high cost. In short, the health expenditure in
- Structure of the Ministry of Health:
As for the structure o the Ministry of Health (MOH), the health system is organized into central, provincial and district levels. The central level consists of the central MOH, National Programs and Central Institutions.
Its role mainly relates to the development, implementation and monitoring concerning national health policy, strategy and planning….etc.
The provincial level refers to the 24 provincial and Municipal Health Departments. Its role is to link the Central Level and the Operational Districts. The Operational Districts Level consists of a referral hospital and health center (HCs). Its main role is to implement OD health objectives. The number of centers and their locations are decided by the population density. There is one health center for every 10,000 people.
The Royal of Cambodian Government has paid attention to the healthcare. At the Consultant Group meeting with the donors, Cambodian Government delegate listed the following achievements in health sector.
1. A decrease in children under 5 years mortality rate from 124 per 1,000 live birth in 1998 to 68 per 1,000 live births in 2005.
2. A decrease in the infant’s mortality rate from 115 per 1,000 live births in 1988 to 82 per 1,000 live births in 2005.
3. The development of First Health workforce Development Plan for The human resource in healthcare field from 1996-2005 including save training.
4. The improvement for performance of health care delivery.
5. At the expansion of National Immunization Program, the children Aged 12-23 months with completing vaccination 68%.
6. Contraceptive Prevalence Rate has increased from 18 % in 1998 to25 %n 2005.
Chapter 7 EDUCATION
Traditional education in
During the Khmer Rouge regime, most of the schools were utterly destroyed and the teachers were killed by the cultural genocide. After the liberation on January 7, 1979, the Government of the People Republic of Cambodia did her best to restore and re-establish the entire social infrastructure and structure, especially in the field of education. More than 1,429 pre-schools, 6,277 primary schools, 670 Junior High schools and 252 High schools have been built in
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12. Svey Reong University (SRU) Svey Reng province
13.
14. National Institute of Education ( N I E)
15.
16.
17. The
18.
19.
20. Pannnasatra University of Cambodia ( PUC)
21.
22. Chamreun University of Poly Technology ( C U P )
23.
24. C U P branches Siem Reap, Battambang and Kongpong Cham
25.
26.
27. W L U branches, Sihanoulville, Battambang
28.
29.
30.
31.
32. I C S University ( I C S U)
33.
34.
35.
36.
37.
38.
39. I M S branches, Siem Reap, Kampot, BonteayMeanchey, Battambang
40. Institute of technology and Management ( I T M)
41. International Institute of
42.
43. I M E branches, Kampot, Pursat and Kampong Cham provinces
44. Vanda Institute ( V U )
45. Angkor City Institute ( A C I )
46. A C I branch, Kongpong Thom
47. SETEC Institute ( S I )
48. Asia Pacific Institute ( A P I )
49. SITC Institute ( SITC)
50. The
51. Intered Institute ( I I )
52. Institute Management of
53. Sachak Asia Development Institute ( S A D I )
54. Department of Higher Education ( D H E )
55. American Intercon Institute ( A I I )
The Ministry of Education, Youth and Sport is mandated to ensure development of an effective human resource base through providing and enabling education opportunities for all Cambodian people in order to increase economic growth, enhance living conditions and enable a well-trained and educational workforce. With past 5 years, net enrollment rate (NER) in primary in 2004-2005 was 88.9 %, compared with 14.2% in 1999. For upper secondary education, NER has slightly increased to 6.7 % in 2004-2005, compared with 6.4 % in 1999. The transition rate from primary to lower secondary education in 1998-1999 was 74.3 %, compared with 83.2% in 2005, an 8.9 % increased (11.2 % for girls)). The transition rate from lower to upper secondary education in 1998-1999 was 39.4 %, compared to 59.2 % in 2005, a 19.8 % increase (22.8 % for girls).
In comply with the current need, the Cambodian Government encourages developing the human resource, Under such circumstance, a large number of Chinese schools (more 60 schools with over 30,000 students), English and vocational schools have been greatly increased in recent years. Among them, the most famous ones are called
In 2006 new budget for education was increased 18.5 % to improve the education system, school environment and living condition of the teachers. The Royal Government of Cambodia is committed to achieve the goal of “Education for All” by ensuring equity in the attainment of nine years of basic education for all children and ensure the access by the children of poor households to education, especially by improving the quality and number of public education institutes and providing more scholarships to the poor students. The Royal Government will continue to strengthen its partnerships with the private sector and national and international community to enhance and improve the quality of education services, both in vocational and technical training and higher education, consistent with international standards and the development needs of the nation.
Conclusion:
Education is an investment for the future generations. The rapid development in the education will bring the great and bright prosperity to the society and improving the living condition. It is also a main factor to develop the human resources for the urgent need in the country. The education is a key enabling factor in income generation, job creation and the poverty reduction. The disable people are the poorest of poor. They are unable to attend the education and employment opportunities. Many disable men, women and children live as outcast along the streets for their survival. Their own concern is to find a way out from the poverty, equal opportunities to education. The employment must be available to disable people who can break the cycle of poverty. Therefore, the Royal of Cambodian Government has to take the full responsibility for the social integration of this large disadvantage group.
Chapter 8 TELECOMMUNICATION SERVICE
Before 1993, the telecommunication sector in
The current telephone rate is still so high that most of people can’t afford, especially the international phone call. Under the assistance of International Telecommunication Union (ITU), the new National Development Master Plan in
According to the ITU statistic, there were 0.8 phones per 1,000 people in
Currently there are four operated mobile phone companies in
1. CAMGSM Company joint-ventured by Royal Group (
2. CAMSHINE Company owned by
3. CASACOM Company owned by
4. CAMINTEL Company owned by
Currently, the demand of telecommunication in
Conclusion:
The Ministry is lacking the specialists in pricing and tariff formation, procedure rules and market economy mechanisms. The international calls have a 20% discount on weekends, but preferential day/night tariff are not adopted yet for the lack of experts. In this particular field, The Ministry of Posts and Telecommunication and Private Mobile phone companies have to closely work together to train, educate and upgrade the Cambodia staff in order to improve the management skill, price control, services and to build the local capacities because the high cost of telephone rate is also a main obstacle to the development of economic growth.
Chapter 9 BANKING
The financial sector in
The new Central Bank law, which is promulgated in January 1996, was to set up a modern legal framework for the financial system to maintain price stability and providing a number of monetary policy instruments. An immediate priority for NBC is to increase its capital to strengthen its supervisory capabilities and develop the human resources and on-sign and off-sign inspections. The NBC has also adopted the new reporting forms for commercial banks.
Foreign assets represented more than a third of their assets in the first half of 1997. In addition, a large part of bank paid-in capital is placed outside Cambodia (The increase from 5% to 10 % of bank’s capital is required to be deposited at NBC since February 1999 and the minimum paid-up capital is currently been increased to 50 (Fifty) billions Riels (approximately US$ 13,089, 005.00) in according with the new law on the Bank promulgated in November 1999.
The Banking System balance sheet illustrates this tendency towards an outflow of domestic saving largely into foreign assets. In fact, credits to the economy represented only (4%) of GDP, which is much below the ratios achieved by neighboring countries such as
Another feature of banking system, largely resulting from the lack of a proper legal and regulatory framework, is the weak role of the central bank, bank’s lack of confidence in counterparts and the fact that there are virtually no Inter-Bank transactions. There is no cleaning mechanism, except for some clearing operations organized at times by National Bank of
Currently, there is no credit information system in
Currently the financial system in
The money supply was increased only 16 % in 2005, but it sharply increased in 2006. Total money supply reached CR 6,325 billion in August of 2006, 33 % increased from 2005. This trend is due to the impressive increase in foreign currencies deposits. Total money supply was reached 21.6 percent in 2006, a slight increase from 19.8 percent in 2005. The growth in foreign currency remains strong activity in garment sector and tourism.
Foreign Exchange:
The “Law on the Foreign Exchange “of Sept. 1997, stipulates that “there shall be no restriction on foreign operation….” Through authorized bank but the authorized banks shall report to the National Bank of
The import or export of raw gold, uncut precious stones or other raw precious metals shall be free, but subject to the prior declaration to the National Bank of Cambodia, and import or export of the means of payment equaling or exceeding 10,000 US dollars in foreign currencies or the equivalent amount in domestic currencies by a traveler shall be declared to custom’s office.
Loan and borrowing including trade credit may be freely contracted between residents and nonresidents as long as the loans disbursement and repayment are made through authorized bank.
Remittance:
The article 11 of the Amend Law on Investment of 2003 guarantees that the investor can fully remit abroad foreign currencies, brought through the authorized banks, for the discharge of financial obligation include:
1. Payment of import to a repayment of principle and interest on International loan.
2. Payment royalties and management fees.
3. Remittance of profit.
4. Repatriation of invested capital in case of dissolution.
National Bank of
Chapter 10 TRANSPORTATION
Due to the long time civil war and lack of maintenance, most of Cambodian national roads and the city streets were in extremely bad condition. The cost of transportation was highly expensive. The main transportation in
| 1 | Main Airports : | |
| | | Siem Reap |
| | | |
| 2 | Main Seaport: | Sihanoukville Seaport |
| 3 | | |
In August 1995, the improvement of
Sihanoukville seaport is only deep seaport in
Due to the Open Sea Policies of Cambodian Government, another small private port was recently opened nearby
The current maritime routes connect with Sihanoukville are the United States, the European countries, China, Hong Kong, Indonesia, Japan, Malaysia, Philippines, Singapore, South Korea, Thailand and Vietnam.
The
| 1 | |
| 2 | Kongpong Cham Port.( on |
| 3 | |
| 4 | Stung |
| 5 | Neak Loeang |
| 6 | Kongpong Chnang Port. |
| 7 | Chong Khneas ( Siem Reap) Port ( on |
The container freight is available only for the rubber plants between
Currently, there are two lines of railway in
Between 1998 and 2003,
In addition to the bridge over
Currently there are 14,000 vehicles and 600, 000 motor bicycles in
With the assistances from many donors, the rehabilitation of road network is still underway. Approximately 98 % of the rehabilitation and improvement works of National Road No1 to NR No 7 are expected to be completed by 2008, and the improvement works for the remaining section of National Road No 1 is supposed to be completed by 2010.
Currently there are three international highway plans going through
Conclusion:
The transportation plays an import role for the economic growth. The high cost of transportation will affect and increase the capital of the production. It is also main obstacle of national economic growth. In these few years, most of the national roads and city streets have been repaired and rehabilitated with the assistances or loans from ADB or other agencies and the governments own budgets Under the assistance of ADB and Chinese Government, the railways including the north line and south line will be rehabilitated or repaired in the near future. According the national plan, it is estimated to be completed at the end of 2009.
Chapter 11 LABOR LAW
The labor code passed in 1997 provides a framework for the relationship between the employee and employer. It outlines the responsibility of employer scope of apprenticeship, general working conditions and framework for the settlement of the labor disputes, strike and labor courts.
Under the labor code, the employees should be entitled to:
l Khmer citizen of either sex shall enjoy the right to choose any employment according to their ability and the need of the society.
l Khmer citizen of either sex shall receive the equal pay for the equal work.
l Khmer citizen of either sex shall have the right to form and to be a member of the trade unions. (Article 36).
l The organization and conduct of trade union shall be determined by law.
l The right to strike and to non-violent demonstration shall be implemented in the framework of a law.
l The women shall not lose her job because of the pregnancy. Women shall have the right to take maternity leave with full pay and with no loss other social benefits.
l All forms of discrimination against the women shall be abolished. The exploitation of women in employment shall prohibit.
Working Hours:
The number of hours worked by of either sex can’t exceed eight hours per day.
Work shifts:
When the work schedule consists of split shifts, the enterprise’s management can normally set up only two shifts; one is in the morning and the other in the afternoon.
Overtime:
If the workers are required to work overtime for the exceptional and urgent job, the overtime hours shall be paid at the rate of fifteen percent higher than the normal hours. If the overtime hours are worked at night or during the weekly time off, the rate of overtime shall be one hundred percent.
Wage:
The wage must be at lease equal the guaranteed minimum wage; that is, it must ensure every worker a decent standard of living compatible with human dignity.
The wage must be paid directly to the workers concerned, unless the workers agree to get paid by other methods. The wage shall be paid in coin or bank note. (Article 113)
The laborers’ wage shall be paid at lease two times per month, at the minimum of six days interval and employees’ wages must be paid at lease once per month.
Leave:
It is prohibited from using the same worker for more than six days per week.
Weekly time off shall last for a minimum of twenty four consecutive hours and shall, in principle, be given on Sunday (article 147)
All workers are entitled to pay annual leave at the rate of one and half work day per month of continuous service. The length of paid leave increases according the seniority of workers at the rate one day per three years of service. (Article 170)
Annual leave is given for Khmer New Year. In every case of paid annual leave exceeding fifteen days, the employers have the right to grant the remaining day-off at another time of the year.
The employer has the right to grant his worker special leave during an event directly affecting the worker’s immediate family (up to a maximum of seven days during any event directly affecting the worker’s immediate family.
Women shall be entitled to a maternity leave of ninety days. After the maternity leave and during the first two months after returning to work, they are only expected to perform light work. During the maternity leave, women are entitled to half of their wage.
In every enterprise or establishment where at lease eight workers are normally employed, the workers shall elect a shop steward to be the sole representative who is eligible to vote in the enterprise or establishment.
A strike must be preceded by prior notice of at least seven days and be filed with the enterprise or establishment. The prior notice must be sent to the Ministry in charge of Labor.
The strike must be peaceful. Committing violent such during a strike is considered serious misconduct that could punished including work suspension or disciplinary layoff (article 330). Freedom of work for non-strikers shall be protected against all forms of threat (article 331).
Foreign employees:
With regards to the foreign employees, the 1997 Labor law sets out the following regulations:
No foreigners can work unless they posses the work permit and employment card issued by Ministry in charge of Labor. These foreigners must meet the following conditions:
A. Employers must beforehand have a legal work permit to work in The Kingdom of Cambodia.
B. The employer must ensure the foreigner has legally entered
C. These foreigners must posses the valid passport.
D. These foreigners must posses the valid residency permit.
E. These foreigners must be fit for their jobs and have no contagious diseases. These conditions must be determined from the Ministry of Health with the approval o the Ministry of Labor.
The work permit is valid for one year and may be extended as long as the validity of extension does not exceed the fixed period in the residency permit of the person in question. (Article 261). The Ministry of in charge of Labor shall issue Ministerial Order for the issuance of work permits and employment cards to foreign workers. (Article 262).
The maximum percentage of foreigners who can be employed in each of the enterprises shall be determined by a Prakas of the Minister of Labor based on each of the categories of personnel as follow:
A- Office personnel
B- Specialized personnel
C- Non-specialized personnel
In order to improve the working condition and ensure to protect the workers’ right, a labor law is in force. The International Labor Organization (ILO) has declared that the garment and footwear industries in
Chapter 12 LAND AND CONSTRUCTION
All investments involve the ownership, lease or concession of immovable property. According to the investment Law on the Use of Land, the foreign investors can’t own the land in
The land has three categories which are defined as below:
l Land for Domicile shall be provided for ownership by the provincial committee or municipal.
l
l
Of these three categories, private ownership rights could be obtained only on land for domicile; whereas on cultivation land and concession land respectively, only possession and use rights and the right to exclusively occupy could be obtained.
Tax on Unused Land:
In accordance with the announcement on Measures for Management and Collection of Tax on
A 2% tax is levied on the assessed value of unused land and its payment is responsible for the registered owner by the size (square meters) and value which is determined by the committee for evaluation of underdeveloped land. A 4% registration tax is levied on the registration of ownership of real property.
Construction Permit:
Before building any structure on the land or remodeling a building, the owner of the land or building must obtain a Construction Permit signed by the government. For the commercial building (more than 3,000 square meters) including the hotel, the permit must be approved by the newly created Ministry of Urbanization and Construction after submitting the documents to the construction office, the construction office will make the decision within 45 days.
The construction must be started within one year subsequent to issuance the permit. If necessary, the extension is allowed. Upon completion, the construction must be approved by issuance of a certificate to attest the completion of the construction.
Ownership
It is prohibited for any foreigners, either a national person or legal entity, to own land. The Constitute stipulated that “All persons, individuals or collectively, shall have the right to ownership. Only Khmer legal entity and citizens of Khmer nationality shall have the right to own the land (article 44). The 2001 Land Law also says that only national or legal entities of Khmer nationality have the right to ownership of the land in
Land law (article
The major provisions of 2001 Land Law regarding immoveable properties ownership, which may be of the keen interest to prospective investors, are as follows:
l Any regime of ownership of immoveable property prior to 1979 shall not be recognized. (Article 7).
l Any entering into possession of properties in the public and private property of the State, through any means, that occurs after this law comes into effect, is null and void (Article 18).
l Possession of immovable property, which was recognized since 1998, may constitute a right in rem over immovable property and may lead to the acquisition of ownership by the holder of the property (Article 29).
l Any person who, for no less than five years, prior to the promulgation of Law, enjoyed peaceful, uncontested possession of immovable property can lawfully be privately possessed, has the right to request definitive Title of Ownership (Article 30).
l After the law comes into force, any new occupant without title to an immovable property shall be considered as an illegal occupant.
l In order to transform into ownership of immovable property, the possession shall be unambiguous, non-violent, and notorious to the public, continuous and in good faith. (Article 38)
Land concessions:
In
Land concession may only create right for the time fixed by the concession contract (Article52). Land concession areas shall not be more than 10,000 hectares and maximum duration is limited to ninety-nine year. (Article 59 & 61)
The law on Concessions has already drafted and in waiting to be passed by the National Assembly.
Land Lease:
There are two types of land lease for an indefinite period of time and a definite period of time. A lease with an option can renew and a long-term lease for 15 years or more. A long-term lease constitutes a right in rem over immovable property and such right may be assigned for valuable consideration or transferred by succession. (Article 106&108)
Limitation on land use:
“Law on Land Use Planning, Urbanization and Construction” of 1994 regulation are used the nationwide in
Chapter 13 ELECTRICITY
With the rapid population and economic growth, we need more and more electricity to comply with the urgent need in
Currently about 7% of the rural residents has access to reliable electricity supply. Another 45% has less dependable battery powered electricity. For the improvement of the electricity, the government has developed five major strategies as below:
1. An annual 9% increase in the number of households with the reliable electricity.
2. Encouraging E.D.C. and private electric producers to find new sources of hydro-electricity and solar energy.
3. Training course provided by the government for 6000 existing rural electricity enterprises.
4. Forming the collectives in the remote area who would invest their own money in the partnerships with the government for the donor fund.
5. Encouraging the government to promptly approve the Joint-Venture License between the private investors and the local collectives.
Asian Development Bank (ADB) has approved the loan US$ 18 millions for the electricity projects in Udor Meanchey, Kampot, Kongpong Speu, Prey Veng, Kratie, Takeo, Ratanakiri, and Svey Rien provinces. It is estimated at least 170,000 persons will be benefited in the above projects. In order to comply with current market need, most of the cities will change the new diesel generators.
The generator capacity consists of mostly of small diesel generating set and a 3 x 6 MW and fired steam turbine station. In
Under the World Bank Fund, a 115 KW network is being constructed around
The rehabilitation of the generating sets and distribution system has been funded by the World Bank, Asian Development Bank and bilateral donors. The remaining 21 small system caters for the need of provincial towns with a total installed generating capacity of about 20 MW, ranging in size from 100 KW at Preah Vihear to 4,450 KW at Sihanoukville.
The total electricity in
Currently, electricity in
1. Electricite De Combodge (E.D.C), a government enterprise.
2. Private entities including Independent enterprises (IPPs) in the provincial town.
3. Licensees in small town.
4. Rural Electricity Enterprises (REE).
EDC has a consolidated license (generation, distribution and transmission) for electricity supply in
For the southern region, a Power Purchase Agreement (PPA) has been signed to import power from
For the northern region, a PPA for electricity imported from
In Cambodia, electricity was used to be supplied by two hydropower plants (one is Kirirom 1 connected to Phnom Penh power system and other at Ratnakiri connected to Ratanakiri power system of EDC 1 turbine power plant, which is installed at C2 power plant at Phnom Penh and several number of diesel power plants using HPO or LDO. In 2005, 43,542 million KWH, which account for 5.0% of total electricity supply in Cambodia, was provided by two hydropower plants, 28,185 million KWH or 3.2% by HFO burnt steam power and 807,325 KWH or 91,8% diesel/ HPO generators. Steam C2 power plant has been restricted since 2005 due to high operating cost and unavailable spare parts.
Currently, the electricity supply still does not meet the basic demand for electricity, especially in the rural areas, where 24 hours supply of electricity is still not assured, or the quality of electricity is not reliable.
The electricity power plants being constructed are as follows:
1. The construction of a transmission line for 60 KW from
2. Due to the expected higher consumption of electricity in the area, the existing 22 KV transmission line from
3. A new Kamchay hydropower plant with a capacity 193.2 MW will be developed by 2010 and other coal power plant (200 MW) in Sihanoukville will be completed by 2010, which will start to generate 100 MW by 2010.
Except the above-mentioned electricity projects, there are other electricity development plants such as the lower Stoang Russey Chrum hydropower project (207 MWh), Metoat project, Ta Tay project under private financing and Thy Phat project under private financing.
Electricity Tariff:
The electricity tariff charged by IPPs is quite high compared with the international standard. IPPs average tariff in the whole year in 2005 was approximately US$ 0.17 per KWH, but some suppliers in
Conclusion:
The abundant and low cost electricity is the key to develop the country. High cost rate of electricity will affect all productive sectors and hinder the industrial investments and competitiveness. The current electricity rate is still high and expensive. The Royal Government and private sector should work closely together to look for the best way to solve the above-mentioned problems because the high cost rate of electricity is also the main obstacle for the industrial development. According to my observation, I am strongly confident that
Chapter 14 INSURANCE
Because of decades of civil war and political instability,
At the present, the insurance companies operating in
1. CAMINICO Insurance Company (State owned) was started in 1993.
2. CONTINENTIALINDOCHINE ( branch of Continental Union)was started in 1993
3. INDOCHINA Insurance Union: broking Insurance firm registered in
4. ASIA Insurance branch of Asia Insurance was started in 1996.
5. FORTE Insurance Company was started in 1996.
6. World Trade Insurance was started in 1996.
Conclusion:
The development of insurance in
Chapter 15 NATURAL AND WATER RESOURCES
Although some laws and regulations concerning the natural resources have been drafted, the laws are seldom enacted yet.
Petroleum:
Cambodian National Petroleum Authority under the direct management of Prime Minister and Council of Ministers has been established since 1998. Its duty is to manage overseas and provide the guideline and advice, and to coordinate the activities relevant to the petroleum exploration and development. The government currently implements the open tender system. Oil and gas exploration rights are negotiated on case by case basis. Expended licensing of blocks of share exploration areas is being undertaken based on surveys to asses the ability of island fossil fuel deposits in the
In 1997, The Royal Government of Cambodia has granted the conditional licenses to five companies to drill in four blocks in
In compliance with international standard, the government is preparing the new Mineral and Petroleum Laws.
Currently there are eight petroleum companies in
| | Name of Company | Country |
| 1 | Caltex Company | |
| 2 | Shell Company | British |
| 3 | Total Company | |
| 4 | PTT Company | |
| 5 | Petronas Company | |
| 6 | Sokimex Company | |
| 7 | Tela Company | |
| 8 | Mittapheap Perta Company | |
Among them, the largest company is Sokimex, which occupies 45 % of the market shares.
With the rapid economic growth, the vehicles and motorbikes are sharply increased. Currently there are 140,000 vehicles including all kinds of car and 600,000 motorbikes in
Mineral:
In the mineral sector, potential exists in respect of gold, gemstones (aspire and ruby), limestone, phosphate, iron, aluminum and granite……..etc. The government strongly encourages the foreign investors to invest in the mineral sector. Concessions are usually for the term of 20 to 50 years. An Australian company has already signed a contract for investment about 2.0 billion US dollars with Cambodian government for the Aluminum project.
Freshwater Resources:
The large share of
Water Supply-Urban Water System
In order to improve the water system, the government is looking for the financing for completing water supply system rehabilitation for towns in provinces. About 65% of the residents in
With the eternal assistance, the Royal Government of Cambodia has been focusing its efforts on capital investment on the rehabilitation of sanitation and sewage systems in
Rural Water System:
Provisions of safe water in the rural area are very important to the people. About one-four (1/4) of population, the water well with pumps will be needed. 39,000 new water points will be built in the rural area before 2000. Finance and technique will be supplies by NGOs. Public investment sector needs the amount to US$ 16 million over the next three years.
The Ministry of Water Resources and Meteorology is responsible for developing and managing water resources in
For industrial use in Sihanoukville, the groundwater can be counted as stable supply source, although the water quality does not meet the requirement on account of salt contents. Both Pailin and Koh Kong are in better condition because they have surface water supply.
Chapter 16 RURAL DEVELOPMENT
As for the rural development, it is a major consecutive issue, which covers with health, education, agriculture, water, sanitation and other sectors. It is also the central to the poverty reduction because 85 % of population lives in the rural areas. The Royal Government of Cambodia has adopted a multi-pronged approach to booster the rural development and empowers the local communities. During 1998-2003, more than 3, 000 civil servants and 75,000 elected village representatives have been received the training in the variety of technical participatory planning, financial management, contract management, bidding and procurement, monitoring and evaluation. During 1998-2003, 1,928 projects were approved out of 3,272 applications received. 90.8% of these were in the rural areas and the rest in the urban areas.
Until the end of 2005, the Royal Government of Cambodia has already rehabilitated or reconstructed works in the rural areas including
Under the encouragement of the government, currently there are 15 macro-finance institutions working in the rural areas along with 40 operators, Specialized Banks and Rural Development Banks. But the demand exceeds the supply. The issue of high interest rates is to be addressed.
Conclusion:
In order to promote the rural development and improve the living condition of the residents in the rural areas, some suggestions are as below:
1. The government should encourage the private sector to involve in the farm and village enterprises including the small scale of commercial market oriented agriculture, crop and livelihood production.
2. Assist to protect the rural areas from the natural calamities such as the flood and draught etc.
3. Provide the vocational training.
4. Expand the micro-finance and reduce the high interest rate by pro- active measures.
5. Rehabilitate or reconstruct the existing irrigate system and drainages.
6. Build more schools and dispensaries in the rural areas.
Chapter 17 SPECIAL ECONOMIC ZONE
A sub-decree on the Establishment and Management of Special Economic zone (SEZ) is adopted on December 21, 2005. Currently there are eleven Special Economic Zones in
| Cambodia’s Special Economic Zone | |||
| | NAMES OF SEZ | AREA | LOCATION |
| 1 | Koh Kong SEZ | | |
| 2 | Buoy Chheng SEZ | | |
| 3 | SNC SEZ SEZ | | Sihanoukville |
| 4 | Stung Hoa SEZ | | Sihanoulville |
| 5 | Sihanoukville SEZ | | Sihanoukville |
| 6 | N.L.G. SEZ | | |
| 7 | Mahattan SEZ | | |
| 8 | Chay Chay SEZ | | |
| 9 | Duong Chiv SEZ | | |
| 10 | Phnom Penh SEZ | | 8 kms from |
| 11 | Kampot SEZ | | |
The object of Special Economic Zone is to create the better investment climate and to develop the areas along with borders with the neighboring countries and turn them into agricultural, industrial, trade and investment development zone sources such as telecommunications, water and electricity supply and other ancillary facilities and social and legal infrastructure will be mobilized for boosting economic activities and condition for the Special Economic Zone.
Basic Concept and Condition for the SEZ
With reference to the basic concept and condition for the SEZ, the SEZ Sub-decree defines as follow:
l SEZ refers the special area for the development of economic sectors which brings all industrial and other related activities including General Industrial Zone and or Export Processing Zone.
l SEZ must have a land of over 50 hectares with precise location and geographic boundaries.
l It must have a surrounding fen (for Export Processing Zone, the Free Trade Zone and the premises of each investor in each region).
l It must have the management office building and Zone Administration Office building and Zone administration and all necessary infrastructures must be provided.
l It must have the water sewage network, waste water treatment network, location of storage and management of solid wastes, environment-protection measure etc.
Application Process for the development of the SEZ
Zone developer has to have the following ability and duties (article 4.4 the SEZ sub-decree)
l They must have the sufficient capital and means to develop the infrastructures in the zone including the human resource to manage the activities of the zone.
l Construct the infrastructure in the zone.
l Lease the land and provide services to the zone investors.
l Arrange the security personnel and ensure good public order in the zone at all time.
Management Structure of the SEZ
The Cambodian Special Economic Zone Board (CSEZB) under CDC is the “One-Stop-Service” organization and also in charge of development, management and supervision of operation of SEZ.
The Special Economic Zone Shooting Committee (SEZTSC), which is located at CDC, has a duty to promptly settle all issue occurring in the Special Economic Zone, whether pertaining to the technical or legal aspects, or the issue under the joint jurisdiction of ministries or institute and beyond competence of the Special Economic Zone Administration or Cambodian Special Zone Board. It has the further duty to be a mechanism to receive any complaints and seek for the solution for the complaint filed by Zone developer.
The composition of the SEZ TSC is as follows:
| 1 | Chairman of Council for the Development | Chairman |
| 2 | Minister of Council Ministers | Member |
| 3 | Minister of Economy and Finance | Member |
| 4 | Minister of Commerce | Member |
| 5 | Minister of Land Management Urbanism and Construction | Member |
| 6 | Minster of Environment | Member |
| 7 | Minister of Industry, Mines and Energy | Member |
| 8 | Minister of Public Works and Transportation | Member |
| 9 | Minster of Labor and Vocational Training | Member |
| 10 | Secretary General of CDC | Member |
| 11 | Secretary General of Cambodian SEZB | Secretary |
Chapter 18 INVESTMENT
The Council for the Development of Cambodia is the sole and one-stop-service organization responsible for rehabilitation, development and over-seeing investment activities. The Council for the Development of Cambodia’s Etat-Major”is responsible for the evaluation and the decision making on all rehabilitation and development, and investment project activities.
The Council for the Development of Cambodia (CDC) comprises of two operational Boards:
1. The
2. The
In terms of foreign investment, the Royal Government of Cambodia has enacted a new investment law with great incentives and this law has been in effect since August 4, 1994.
Investment Procedures
The investors have to submit investment applications to the Council for the Development of Cambodia for review and decision. The Council for Development of Cambodia shall response as to its decision to all investors/applications within a period of a maximum of forty five (45) days following the date of submission of the complete investment application.
Investment Guarantees:
The investors shall be treated in a non-discriminatory manner as set by law, except for ownership of land as set forth in the Constitution of Kingdom of Cambodia
The Royal Government of Cambodia shall not impose price control on the products or services of investors who have received prior approval from the Government.
In accordance with the relevant laws issued and published for the public by the National Bank of
- Payment for imports and repayment of principal and interest on international loans;
- Payment of royalties and management fees;
- Remittance of profits;
- Repatriation of invested capital in compliance with Chapter 8.
- Repatriation of wage and salaries of foreign employees.
Investment Incentives
The Royal Government shall make available incentives to encourage investments in such important fields such as:
1. Pioneer and/ or high technology industries;
2. Job creation;
3. Export-oriented;
4. Tourism industry;
5. Agro-industry and Transformation industry.
6. Physical infrastructure and energy.
7. Provincial and rural development;
8. Investment in Special Promotion Zone (SPZ) as shall be created by law.
9. Incentives shall include the exemption, in whole or in part, of duty and tax.
Tax Incentives:
1. A corporate tax rate of 9% except the tax rate on the exploration and Exploitation of natural resources such as timber, oil, mines, gold and precious stones.
2. A corporate tax exemption of up to 8 years depending on the Characteristics of the projects and the priority of the government which are set in a Sub-Decree. Corporate tax exemption is to take effect beginning year the project derives its first profit. A 5 years loss-forward is also allowed. In the event the profits are being reinvested in the country, such profits are exempted from all corporate tax.
3. Non-taxation on the distribution of dividends or profit or proceeds of investments. Whether they will be transferred abroad or distributed in the country.
4. 100% import exemption on construction materials, means of production, equipment, intermediate goods, raw materials and spare parts used by:
A. An export-oriented project with a minimum of 80% of the productions set apart for export, and
B. Located in designated Special Promotion Zone (SPZ) listed in the development priority list issued by the Council;
C. Tourism industry.
D. Labor intensive industry, transformation industry, and Agro-Industry and
E. Physical infrastructure and energy industry.
These 100% exemption of duty and taxes mentioned above shall be in effect according to the terms of the agreement or requirement book of the investment projects which will produce goods for export in minimum of 80 percent of overall productivities as stipulated in the above points (A4) and for the investment projects which are located in Special Promotion Zone (SPZ) as set in (4B).
Beside these kinds of investment projects in the above points (4A) and (4B), the 100% exemption of duties and taxes are only authorized for an arrangement of construction period of the enterprises, factories, buildings, and the first year of operation business production.
5. 100% exemption of export tax, if any
6. The permission to bring into the
A. Management personnel and experts
B. Technical personnel
C. Skilled Workers
D. Spouses and dependants of the above persons as authorized by the Council for Development of Cambodia and in compliance with the immigration and Labor Law.
Investment Projects:
The Council for Development of Cambodia shall submit for the approval of the Council of Ministers, any of the following investment projects involving:
1. Capital investment of USD 50 million and above
2. The exploration and the exploitation of mineral and natural resources.
3. Possible negative impact on the environment
4. Long-term strategy.
5. Projects on Built-Own Operate (BOO) or Built-Lease Transfer (BLT) basis.
Investment Procedures:
The basic procedural steps to obtain an investment license and incentives are as follow:
1. Prepare the following documents for presentation to the Cambodian Investment Board (CIB):
2. CIB Application form and related documents
3. Memorandum and Articles of Association of the investment company; or the contract for the Business Corporation Contract (BCC) or Built-Own-Transfer (BOT).
4. Technical and Financial Feasible Study.
5. File application with CIB and pay for first part of application fee:
US$ 100 for investment of USD 1 million or less
US$ 200 for investment over USD 1 million.
6. Meet with CDC and CIB officials to present the project and answer any questions. Usually meetings will be required with the Department of Investment Assessment at CIB.
7. Provide any additional documents required to complete the application. Once the CDC considers the application complete, it is required to issue an approval or rejection of the application within 28 working days under new CDC investment support policies set out at the beginning of this section. Please keep in mind that this 28 days limit in a new initiative of the CDC and that in the past. It was not uncommon for a 45 days limit to be surpassed.
8. Receive the approval in principle from the CDC and pay second part of application fee:
US$ 500 for investment of USD 1 million or less
US$ 1,000 for investment of over US$ 1 million.
9. Register legal entitle at the Ministry of Commerce.
10. Receive Formal Investment License from CDC.
11. Proceed with investment within 6 months.
Form of Investment and Business in
When considering to invest in
1. Wholly owned domestic capital (100%)
2. Wholly owned foreign capital (100%)
3. Joint Venture.
4. Built-Operate-Transfer (BOT)
5. Built Cooperate Contract (BCC).
6. Branch Office
7. Representative Office
Limited Liability Company
The liability company is the most common form of investment for projects approved by Cambodian Development Council (CDC). It can be 100% owned by Cambodians, 100% of foreigners or any Cambodians of two or more foreign or Cambodian shareholders.
A Limited Liability Company is formed by registration of Memorandum and Articles of Association at Ministry of Commerce and receipt of a business license from the ministry.
Built-Operate-Transfer (BOT)
A Built-Operate-Transfer project is a concession contract usually the government grants a concession to a promoter, who is responsible for the construction, financing, operation and maintenance of a facility over the period, the promoter owns and operates the facility and collects the revenue to repay the financing and investment costs, maintains and operates the facility and makes a margin of profit.
Joint Venture:
The proposed investors may be in the form of an incorporated joint venture which may be formed between investors of nay nationality. There is no limit on the permitted share holding proportion of each shareholder, unless the joint venture owns or intends to own land in
Branch Office:
The branch office is an office that is opened by a company of another foreign country for the purpose of conducting the commercial activity in
Representative Office:
The representative office is established by eligible foreign investors to facilitate the sourcing of legal goods and services and to collect information for its parent company. They also serve as a channel for promoting and marketing their products.
The representative office is not considered a separate legal entitle from the parent company and regarded as the cost center and is not subject to Cambodian Tax Laws.
According to the instruction Circular on Commercial registration, a private limited company must have between two and thirty shareholders. If it has only one shareholder, it is seem to be a Sole Proprietorship Limited Company. A public limited company must have at least thirty shareholders.
Formality for Registration of a company:
Shareholders or directors must come to complete and sign a registration form in person with his or her ID or passport in front of an official at the Legal Affair Division to confirm all the documents are correct and complete. If any ambiguity is found in he documents, the Directors of the Legal Affair Division will visit the Director of company to clarify such ambiguity on case by case basis.
Disputes and Dissolution:
Any dispute relating to a promoted investment established in the Kingdom by a Cambodian or a foreign national concerning its rights and obligations set forth in the Law shall be settled amicably as for as possible through constitution between the parties in dispute.
Should the parties fail to reach an amicable settlement within two months, the dispute shall be brought by either party for:
Conciliation before the Council shall provide its opinion, or refer the matter to the course of the
In the event of a promoted company intends to end its activity in the Kingdom of Cambodia, it will have to inform the Council through either a registered letter or a hand delivered letter stating the reasons of such a decision, which letter shall be signed by the investor or his attorney in fact.
In event of a proposed for dissolution of a company without judicial procedures, the investors shall provide proofs to the Council that the company has properly settled its potential creditors, complainants and claims from the Ministry of Finance and Economy before the investor is allowed to officially dissolve his company according to the applicable commercial law.
Once the investor is allowed to officially his company either within the judicial procedures or not, the investor can transfer the remaining proceeds of assets overseas or use them in the
Council for the Development of
Chapter 19 TRADE REGULATION
The Royal Government of Cambodia has eliminated most non-tariff barriers and import licenses.
1. Custom Duties:
All goods imported to or exported from
2. Import Duties:
Import duties are collected regardless of the point of entry or exist on all goods crossing the border, except those specifically exempted from customs duties by law or proper authorities. Exempted goods include:
Personal effects of individuals when being transferred to their normal resident:
Goods exempted from duties by international treaty:
Humanitarian aid:
Goods imported for a wedding or funeral:
Goods related to international relation:
Certain donations to senior monks.
3. Export Duties:
Presently, there are not export duties applied in Cambodia other than those levied on restricted export products, such as log, sawn, timber, precious metals and stones, seafood and antiquities.
4. Import and Export Documentation:
Cambodian customs require importers and exporters to provide a bill of lading, packing list and invoice for all shipments. Goods shipped through
5. Temporary Entry:
Temporary entry procedures have been established for certain number of products.
6. Labeling or Marketing Requirements:
Cambodian currently has no marketing requirements.
7. Prohibited Imports:
Narcotics, explosions and poisonous chemicals and substances are prohibited according to the Cambodian customs service.
8. Standards:
CAMCONTROL, a unit of the Ministry of Commerce is charged with standards-setting.
CAMCONTROL, delivers documents and certificate of exported products and makes the certification on the quality of products and services.
Imported Items:
| Cars over 3000 cc | 120 % |
| Cars between 2000cc and 3000cc | 90 % |
| Cars under 2000cc | 40 % |
| Alcohol, Beverages, cigarettes & motorcycles | 50 % |
| Cosmetics, garments, textile products, leather goods, footwear, household electrical appliances, fabrics, oil and enzymes. | 35 % |
| Gas, diesel, lubricants | 20 % |
| Machinery, equipment, spares parts, mechanical appliances raw tobacco, wheal and industrial mineral products. | 15 % |
| Essential consumer goods (medicine, sugar, vegetable base metals, packaging materials | 7 % |
Chapter 20 TAXATION
Most of the investments and investors in the
| l Profit Tax | 0% to 20% |
| l Minimum Tax | 1% on gross income earned for year |
| l General Value Add Tax | 10 % |
| l Turnover Tax | from 1% to 10% |
| l Import Tax Import Duty are levied on a wide range of products | 7% 15% 20% 35% or 50% |
| l Salary Tax of Non-residents | 15% |
| l Fringe Benefit Tax | 20% |
| l Withholding Tax | 5% to 15% |
| l Special Tax on Certain Goods and Service | |
Profit Tax:
Profit Tax rates differ completely depending on the type of business activities undertaken by the concerned enterprises
1. Approved Investment
2. Insurance 5%
3. National Resources 30%
4. General 20%
Turnover Tax:
Turnover Tax is a tax on gross turnover received. The rates vary depending on the following business activities:
1. Importation Goods 4%
2. Industrial, handicraft or mining 1%
3. Hotel room, service, nightclub and restaurant 10%
4. Other 4%
Special Tax:
Items:
Most automobiles and parts-displacement > 2000cc 30%
Most automobiles and parts-displacement <2000cc 20%
Most large automobile (e.g. Bus and Truck) 10%
Motorcycle-displacement > 124cc 10%
Certain petroleum products 20%
Certain carbonated and similar non-alcoholic drinks 10%
Beer, Wines and most other alcoholic beverages 10%
Cigarettes and cigars 10%
Hotel accommodation and entertainment charges 10%
International air tickets-commencing in
Withholding Tax:
Withholding Tax includes Resident Withholding tax, Non-resident withholding tax and Dividend Withholding Tax. Resident Withholding Tax is as follows:
1. On interest payment in saving account 5%
2. Services of physical person 15%
3. Royalties for intangible assets 15%
4. Income from rental 10%
Non-Resident Withholding Tax:
Non-Resident Withholding Tax is required to be deducted on payment of Cambodian source to a Non-Tax Resident at a rate 15%.
Dividend Withholding Tax:
Dividend Withholding Tax is imposed on dividend distributed to domestic or foreign shareholders at a percentage equal to the profit tax rate of the enterprise as per formula.
For the detailed information regarding Law of Taxation of Cambodia, please kindly read Law of Taxation book issued in January 2004.
Based on the foregoing incentive requirement, it is now the right time to invest in
My email address is sykonghuot@yahoo.com
TEL：（855）12-562-905
Appendix 1
LAW CONCERNING MARKS
TRADE NAMES AND ACTS OF UNFAIR
COMPETITION
Chapter 1
General Provision
Article 1
This law has the objective to protect the marks and trade names duly registered in the register of marks in the
Article 2
(A) “marks” means any visible sign capable of distinguishing the goods (trademark) or services (service mark) of enterprise:
(B) “Collective mark” means any visible sign designated as such in the application for registration and capable of distinguishing the origin or any other common characteristic including the quality of goods or services of different enterprises which use the sign under the control of the registered owner of the collective narks.
(C) “Trade marks” means the name or/and designation identifying and distinguishing and enterprise.
Article 4
A mark cannot be validly registered:
(a) If it is incapable of distinguishing the goods or services of one enterprise from those of other enterprise.
(b) If it is contrary to public order or morality or good custom.
(c) If it is likely to mislead the public or trade circles, in particular as regards the geographical origin of the goods or services or their nature of characteristics;
(d) If it is identical with, or is an imitation of or contains as an element, an armorial bearing, flag and other emblem, a name of abbreviation or initials of the name of, or official sign or hallmark adopted by, any State, intergovernmental organization or organization created by an international convention, unless authorized by the company authority of that State or organization.
(e) If it is identical with, or confusingly similar to, or constitutes a translation of a mark or trade name which is well known in the
(f) If it is identical with, or confusingly similar to, or constitutes a translation of a mark or trade name which is well known and registered in the Kingdom of Cambodia for goods or services which are not identical or similar to those in respect of which registration is applied for, applied that use of the mark in relation to those goods or services would indicate a connection between those goods or services and the owner of the well-known mark that the interest of the owner of the well-known mark are likely to be damaged by such use; or
(g) If it is identical with a mark belonging to a different proprietor and already on the Register; or with an earlier filling or priority date, in respect of the same goods or services or closely related goods or services, or if it is nearly resembles such a mark as to be likely to deceive or cause confusion.
Chapter 2
Registration and Right Conferred by Registration
Article 5
(a) The application for registration of a mark, record of change of applicant address and endorsement of affidavit of use or nonuse shall be filed with the Ministry of Commerce.
(b) The application or registration of a mark shall contain a request a reproduction of the mark and a list of the goods or services for which registration of the mark is requested, listed under the applicable class or classes of the international Classification as mentioned in the annex.
(c) The application for registration of a mark, record of change of address, and endorsement of affidavit of us or non-use shall be subject to the payment of the prescribed application fees as mentioned in the joint declaration of the Ministry of Finance and Economy and Ministry of Commerce.
Article 6
Right of priority in the mark registration shall be granted based OD the following conditions:
The applicant may require the filling priority by attaching to the application a declaration claiming the priority of an earlier national or regional application filed by the applicant or his predecessor in title in any country member of the Paris Convention. The effect of the said declaration shall be as provided in the Paris Convention.
Article 7
The applicant may withdraw the application at any time.
Article 8
(a) After receiving the application, the registrar shall examine whether the application complies with the requirements of Article 5 and the regulation pertaining thereto.
(b) Examine and determine whether the mark is a mark as defined in Article 2 and is unregistered under Article 4 with the exception of item (g) thereof.
Article 9
(a)Where two or more mark applications relating to identical or similar mark which are to be used on identical or similar goods or service are filed on different dates, the registrar may refuse to register any of them until the rights of those applicants have, upon application in the prescribed manners, been determined by him, or have been settled by agreement in a manner approved by him.
(b)Where two or more mark applications relating to identical or similar marks which are to be used on identical or similar goods or services are filed on the same date, only one applicant, agreed upon after mutual consultation among all the applicants, may obtain a registration for the mark.
Article 10
(a)Where the registrar finds the condition referred to in Article 8 and 9 are fulfilled, he shall register the mark, issue to the applicant a certificate of registration, and publish a reference to the registration in the Official Gazette of the Ministry of Commerce.
(b)Where the requirements under Article 8 are not fulfilled, the applicant may, within 45 days after receiving written notice from the Registrar, amend his application. In case the Registrar receives no positive response from the applicant during that period, he shall refuse the application.
(c)Within 90 days after the date of publishing the Official Gazette, any interested person may, in the prescribed manner, give notice to the Registrar of opposition to the registration of the mark on the grounds that one or more of the requirements of Articles 2 (a), 4 and 5 and the regulations pertaining thereto are not fulfilled.
(d)The Registrar shall send forthwith a copy of such a notice to the applicant, and, within the prescribed period and in the prescribed period and in the prescribed manner, the applicant shall send to the Registrar a counter-statement of the grounds on which he relies for his application; if he does not do so, he shall be deemed to have abandoned the registration.
(e)If the applicant sends a counter-statement, the Registrar shall furnish a copy thereof to the person giving notice of opposition and after hearing the parties, if either or both wish to be heard, and considering the merits of the case, shall decide whether the registered mark is legitimate.
Article 11
(a)The use of a registered mark, in relation to any goods or services for which it has been registered by any person other than the registered owner shall require the agreement of the latter.
(b)The registered owner of the mark shall, in addition to any rights, remedies or actions available to him, have the rights to institute court proceedings against any person who infringes the mark by using without his agreement, the mark as aforesaid or who performs acts which make it likely that infringement will occur. The right shall extend to the use of a sign similar to those for which the mark has been registered, where confusion may arise in the public.
(c)The rights conferred by registration of a mark shall not extend to acts in respect of articles which have been put on the market in the
Article 12
(a)The registration of a mark shall be for a period of ten years from the filing date of the application for registration.
(b)The registration of mark may, upon request, be renewed for consecutive periods of ten years, provided that the registered owner pays the prescribed renewal fee.
(c)On applying for renewal of a trademark registered before the law come into force, in respect of all goods or services in any class, the applicant in term of the International Classification, shall clearly specify the kinds of goods or services for which protection is desired.
A period of grace of six months shall be allowed for the late renewal of the registration of a mark.
Chapter 3
Invalidation and Removal
Article 13
(a)Any interested person may request the Ministry of Commerce to invalidate the registration of a mark.
(b)The Ministry of Commerce shall invalidate the registration if the person requesting the invalidation prove that any requirements of articles2 (a) and 4 is not fulfilled;
(c)Any invalidation of a registration of a mark shall be deemed to have been effective as of the date of registration, shall be recorded and a reference thereto published as soon as possible.
Article 14
The Ministry of Commerce has the right to order the cancellation to the registered mark where:
(a)The applicant does not apply for renewal of this registered mark within the period prescribed under Article 12(b) and (d).
(b) The owner of registered requests to the removal.
(c) The owner of registered mark has not complied, within 90 days, with the conditions or restrictions prescribed under Article 8.
(d) The owner of registered mark ceases to have address for service in the
(e) It is convinced upon evidence that the owner of the registered mark is not the legitimate owner.
(f) It is convinced that the registered mark is similar or identical to a well known mark owned by third party.
Article 15
Any interested person may request the Ministry of Commerce to remove a mark from the Register, in respect of any of the goods or services in respect of which it is in registered, on the ground that up to one month prior to filing the request the mark had, after its registration, not been used by the registered owner or a licensee during a continuous period of five years, provided that a mark shall not be removed if it is shown that special circumstances prevented the use of the mark and that there was no intension not to use or to abandon the same in respect of those goods or services
Appendix 2
Law on foreign exchange
Chapter 1
General Provisions
Article 1
Any foreign exchange operations and, in general, and operations carried out between residents and nonresidents are subject to the present law when they relate to:
˙ payments for commercial transactions;
˙ transfer; or
˙ capital flows, including investment.
Article 2
For the enforcement of this law, the following shall be considered as foreign exchange:
˙ payment instruments or securities denominated in foreign currency;
˙ raw gold, raw precious metals, uncut precious stones.
Article 3
The following shall be considered as residents:
˙individuals, regardless of their nationality, who have had their main professional activity or their main residence in the Kingdom of Cambodia for a period of and over one hundred and eighty two days ( 182 days ), with the exception of foreign civil servants on diplomatic or similar assignments;
˙legal entities incorporated under local law and branches of legal entities incorporated under foreign law that are established in the Kingdom of Cambodia;
˙ any Cambodia civil servants on foreign assignments, regardless of the length of their stay .
Article 4
The following shall be considered as nonresidents:
˙individuals of Cambodian nationality, who have had their main professional activity or their main residence abroad for a period of and over one hundred and eighty two days (82 days );
˙foreign individuals, who have had their main professional activity or their main residence in the Kingdom of Cambodian for less than one hundred and eighty two days (182 days );
˙legal entities, incorporated under local law, established abroad and overseas branches of legal entities incorporated under local law;
˙foreign civil servants on diplomatic or similar assignments in the Kingdom of Cambodia.
Chapter 2
Bank Intermediation
Article 5
1. There shall be no restrictions on foreign exchange operations trough book entry including purchases and sales of foreign exchange on the foreign exchange market, transfers, all kinds of international settlements, and capital flows in foreign or domestic currency, between
2. Only banks permanently established in the
3. Authorized intermediaries shall be required, under conditions established by regulations, to provide the Central Bank on a regular basis with periodic statements, by type of transfers or settlement and of outflows and inflows of capital carried out between the
4. Any export of cash in foreign currency by authorized intermediaries shall be subject to prior declaration to the Central Bank.
5. The manual money changers who have fixed or moving counter may exercise their exchange transaction with the prior authorization of the Central Bank.
Article 6
In case of foreign exchange crisis, the Central Bank may issue regulations to be implemented for a maximum period of 3 months, imposing certain temporary restrictions on the activity of authorized intermediaries, particularly on the transactions stated in Article 5 of the present law, or their foreign exchange position, or any loans in domestic currency extended to nonresidents. In case of having to prolong the scheme, the Central Bank together with the Ministry of Economy and Finance shall submit a request to the Head of the Royal Government for approval.
Article 7
Residents may hold foreign currencies freely, both in form and location of such holdings inside the country. Nevertheless, in case of foreign exchange crisis, the Central Bank may issue regulations to be implemented for a maximum period of 3 months. Suspending temporally the enforcement of these provisions. In case of having to prolong the scheme, the Central Bank together with the Ministry of Economy and Finance shall submit a request to the Head of the Royal Government for approval.
Chapter 3
Current Operations
Article 8
Exporters or importers of goods and services shall make payments for their commercial transactions with the rest of the world through authorized intermediaries.
Article 9
Authorized intermediaries may be required by the Central Bank to submit proof of payment for imports by banker’s order in support of their applications to purchase foreign exchange, and later be also requires to provide various administrative evidence confirming the entry of goods into the country.
Article 10
Since the collection is made, the proceeds from export goods or services shall be credited to the exporter’s account with the domiciled bank in accordance with Article 8 of the present law.
Article 11
Counterpart funds in domestic currency from the local marketing of products imported on the basis of external borrowings or grants must be credited to the National Treasury’s account with the Central Bank, in accordance with procedures to be defined by mutual agreement between the National Treasury and the Central Bank.
Article 12
The import or export of raw gold, uncut precious or other raw precious metals shall by free. In accordance with point 1 of Article 5 of the present law, however, shall be subject to prior declaration to the Central Bank if the value of each transaction equals or exceeds ten thousand US dollars ( USD 10,000 ).
Article 13
The export or import of the means of payment equaling or exceeding ten thousand US dollars ( USD 10,000 ) in foreign exchange or the equivalent amount in domestic currency by a traveler shall be declared to the customs officers at border crossings of the
The export of cash in excess of the limit set by the regulation of the Central Bank shall be subject to prior examination by the Central Bank.
The Customs House shall transmit a copy of each such declaration to the Central Bank on a monthly basis.
Chapter 4
Investments Capital Flows
Article 14
The capital flows related to foreign investment in the
Article 15
In so far as liquidation of foreign investment takes place in accordance with the provisions of the Investment Law of the
Article 16
Investment made abroad by resident for an amount equaling or exceeding one hundred thousand US dollars ( USD 100.000) shall be subject to prior declaration to the Central Bank.
Article 17
Transfers relating to investment or liquidation of investment shall be made through authorized intermediaries as stated in Article 5 of the present law.
Subsequently, the authorized intermediaries shall report to the Central Bank the amount of each transfer equaling or exceeding one hundred thousand US dollars ( USD 100,000).
Chapter 5
Other Capital Flows
Article 18
Loans and borrowings, including trade credits may be freely contracted between residents and nonresidents, provided that the loans disbursements and repayments thereof are made through authorized intermediary.
Article 19
The capital flows resulted from those operations (settlements of import and export of goods or services, transfers, investment, loans and borrowings) shall include in the bank periodic statements in accordance with the provisions as stated in point 3 of Article 5 of the present law. Such capital flows shall be classified by category of each operation and the professional secrecy shall be respected.
Chapter 6
Penalties
Article 20
Authorized intermediaries shall be responsible, with caution, for ensuring compliance with the provisions set forth in the present law or in regulations of the Central Bank concerning the operations undertaken by themselves or placed under their control.
Any authorized intermediary who fails to comply with the provisions of the above paragraph shall be punished in accordance with the existing laws.
Article 21
Any person who violates points 3, 4, or 5 of Article 5 or violates Article 17 of the present law shall be liable for imprisonment from one year to five years and for a fine from one million Riels ( 1,000,000 ) to ten million Riels ( 10,000,000 ), or any one of these two punishments.
Article 22
Any person who violates Article 11 or paragraph 1 of Article 13 of the present law shall be liable for a fine of ten per cent ( 10% ) of the amount involved.
Article 23
Any person who violates Article 12 or Article 16 of the present law shall be liable for a fine of twenty per cent ( 20% ) of the amount involved.
Article 24
Any person who violates paragraph 2 of Article 13 of the present law shall be liable for a fine from one million Riels ( 1,000,000 ) to ten million Riels ( 10,000,000 ). Equipments used in the perpetration of the violation shall be confiscated and retained as state property.
Article 25
Any person who violates point 1 of Article 5 o Article 8 Article 18 of the present law shall be liable for a fine of fifty per cent ( 50% ) of the amount involved.
Chapter 7
Final Provisions
Article 26
All provisions contrary to this law are hereby repealed.
Made in
In the name and on behalf of the King
Acting Chief of State
Signature
CHEA SIM
Submitted for the signature of the king
| First Prime Minister | Second Prime Minister |
| Signature | Signature |
| Ung Huot | Hun Sen |
Has informed to
First Prime Minister and Samdech Second Prime Minister
The Governor of the National Bank of
Signature
Thor Peng Leath
No.
For copy
General Secretary of the Royal Government
Nady Tan
http://www.gocambodia.com/laws /foreign_exchage.asp
Appendix 3
Nation-Religion-King
SUB-DECREE
ON
THE ESTABLISHMENT AND MANAGEMENT
OF THE SPECIAL ECONOMIC ZONE
ROYAL GOVERNMENT
-Referring to Constitution of the
-Referring to Preah Reach Kret No. NS/RKT/0704/124 dated July 15, 2004 on the formation of the Royal Government of Cambodia;
-Referring to Preah Reach Kram No. 02/NS/94 dated July 20, 1994 promulgating the Law on the Organization and Functioning of the Council of Ministers;
-Referring to Preah Reach Kram No. 03/NS/94 dated August 05, 1994 promulgating the Law on Investment in the
-Referring to Preah Reach Kram No. NS/RKM/0297/03 dated February 24, 1997 promulgating the Law on Taxation and Preah Reach Kram No. NS/RKM/0303/010 dated March 31, 2003 promulgating the Law on the Amendment to the Law on Taxation;
-Referring to Kret of Council of State of State of Cambodia No. 57 Kr. dated July 26, 1989 on the Tax on Import and Export Goods;
-Referring to Sub-Decree No. 111 ANKr.BK dated September 27, 2005 on the implementation the Law on Amendment to Law on Investment in the
-Referring to the Sub-Decree No. 147 ANKr.Bk dated December 29, 2005 on the Organization and Functioning of the Council for the Development of Cambodia;
-Pursuant to the request of the Council for the Development of Cambodia; and
-Pursuant to the necessity of the Royal Government.
CHAPTER 1
GENERAL PROVISIONS
Article 1: Purpose and Scope of the Sub-Decree
1-1 Purpose
This Sub-Decree in intended to establish and manage the Special Economic Zone and improve the investment climate conducive to the enhancement of productivity, competitiveness, national economic growth, export promotion, employment generation in order to reduce poverty. It further defines the procedures and regulations related to establishment, management, coordination of all investment activities and promotion of investments of Zone Developers and Zone Investment in the Special Economic Zones in the
The Royal Government of Cambodia supports the Special Economic Zone by implementing the principles and conditions consistent with existing policy framework set by the Royal Government of Cambodia which will ensure transparency, efficiency, accountability, accessibility of information for investors.
1-2 Scope
This Sub-Decree shall apply to all activities of relevant ministries or institutions of the Royal Government of Cambodia, Zone Developers and Investors in the Special Economic Zones permitted to invest and have obtained Investment Incentives and guarantees from the Cambodia Special Economic Zones Board and the Special Economic Zones Administration.
Article 2: Definitions
Au used in this Sub-Decree, the following terms shall have the meaning as defined hereunder:
- Cambodian Special Economic Zones Board (CSEZB) refers to the Cambodia Special Economic Zones Board under the authority of the Council for the Development of Cambodia which is established by a Sub-Decree and has the duties to decide on the establishment and management of the Special Economic Zones in the
- Council refers to the Council for the Development of Cambodia which established under the Law on Investment of the
- Export Processing Zone refers to the zone of industrial activities and other activities related to the production and transformation of goods only for export.
- Free Trade Area refers to the area for service provision, storage, demonstration, packaging, cleaning, and finishing of production outputs, products, materials, or other equipments, whose import-export in/out of the zone are provided with duty exemption, except for export to other places in the kingdom of Cambodia whereby such import-export is subject to the duty and excise in accordance to the applicable law.
- General Industrial Zone (GIZ) refers to a zone established for industrial activities and other activities related to the production and transformation of goods for domestic use as well as for export.
- Production Area refers to the area where the factories are located in the industrial zone.
- Production Equipment refers to any machinery and tool used in the substantial transformation of Production Inputs which is not itself transformed or consumed within 2 (two) years of its importation, including information technology equipment or any motor vehicles.
- Production Input refers to goods including raw materials, semi-finished products, and accessories serving production that is fully transformed or utilized in the production process of the Qualified Investment Project (QIP) not later than 2 years after importation. It does not include office equipments and furniture, petroleum products, vehicles, and spare parts for vehicles.
- Production Output refers to goods which are produced from Production Input that have been transformed.
- Qualified Investment Project (QIP) refers to an investment project which has received a Final Registration Certificate.
- Residential Area refers to the area for accommodation of employers, employees and workers in the Special Economic Zone.
- Service Area refers to the area of supporting activities for industrial and commercial operations such as managing and operating offices of the industrial zone, bank, post office, commercial stores and transportation service.
- Special Economic Zone Administration refers to the State administration management unit which is the “One-Stop Service” mechanism at the site of the Special Economic Zone and has the duties to approve and issue permits, licenses and registration to the Zone Investors, including the approval of incentives, pursuant to the full authority delegated by the line ministries and institution, and to address all requests related to the management competence of the State, concerning investments in the zone.
- Special Economic Zone (SEZ) refers to the special area for the development of the economic sectors which brings together all industrial and other related activities and may include General Industrial Zones and/or Export Processing Zones. Each Special Economic Zone shall have a Production Area which my have a Free Trade Area, Service Area, Residential Area and Tourist Area.
- Zone Developer refers to a Cambodia or/and foreign natural or legal person, who implements the Qualified Investment Project, and permitted to invest in the development of physical infrastructures in the zone, and organization of business, services and ensuring the safety and security of the Zone Investors.
- Zone Investors refers to a Cambodia or/and foreign natural or legal person, who implements the Qualified Investment Project, and purchases or rents the immovable property from the Zone Developer and performs investment activities such as business, production, services and trade in the zone.
CHAPTER 2
PROCEDURES FOR THE ESTABLISHMEMT OF THE SPECIAL
ECONOMIC ZONE
Article 3: Establishment of the Special Economic Zone
3.1. Terms and Condition for the Establishment of the Special Economic Zone:
1. The Special Economic Zone shall be permitted to be established in the
2. The Special Economic Zone may be established by the State, private enterprise or joint venture between State and private enterprise.
3. The Establishment of the Special Economic Zone shall be pursuant to the following conditions:
(a) It must have a land of more than 50 hectares with precise location and geographic boundaries.
(b) It must have a surrounding fence (for Export Processing Zone, the Free Trade Area and for the premises of each investor in each zone).
(c) It must have management office buildings, zone administration offices, large road network, clean water, electricity, and telecommunications networks, fire protection and security system. Based on each situation, the zone may have land reserved for the Residential Area for workers, employees and employers, public parks, infirmary, vocational training school, petroleum station, restaurant, car parking, shopping center or market, etc.
(d) It must have water sewage network, waste treatment network, location for storage and management of solid wastes, environment protection measures and other related infrastructures as deemed necessary.
(e) It must comply with technical requirements, regulations and basic rules on construction, environment and other obligations in the development of Special Economic Zone as defined in the instruction issued by relevant ministries or institutions taking into account the geography and specific size of each zone and pursuant to the existing laws, national and international standards.
3.2. Procedure for the establishment of the Special Economic Zone:
1. All Zone Developers, who intend to invest in the development a Special Economic Zone shall submit a request for approval for the development of the zone to the Cambodia Special Economic Zone Board and be registered as Qualified Investment Project. The Cambodian Special Economic Board has the duty to review the proposal and submit it to the “One-Stop Service” mechanism of the Council to decide whether to reject or approve the request to establish the zone.
The Zone Developer shall pay an application fee for the establishment of a Special Economic Zone in the amount of 7,000,000 Riels (Seven Million Riels) to the Cambodian Special Economic Zone Board.
2. The Cambodian Special Economic Zone Board shall respond, with either its approval or denial of the request, within 28 (twenty eight) working days to the Zone Developer.
3. Zone Developer who receives an approval for the establishment of a Special Economic Zone from the Cambodian Special Economic Zone Board has 180 (one hundred eighty) working days, which may be extended based on serious reasons, to do the following:
a. Conduct detailed economic feasibility study of the project including the preparation of the master plan of all infrastructures in the zone such as connecting roads from the zone to outside area, water-electricity network, environmental measures, and information concerning local services costs, land rental, factory rental, water, electricity, phone services and security costs, cost of using public space in the area for the Zone Investors, cost for workers, employees and employers to reside, and vocational training centre, among others; and
b. Submit other related documents or certified letters required by the Cambodian Special Economic Zones Board upon request from the relevant ministries or institutions; such requirements shall be stipulated in the Conditional Registration Certificate of the Zone Developer.
4. Within 100 (one hundred) working days from the date the Zone Developer submitted the project to the Council as stated in paragraph
5. The establishment of the Special Economic Zone and boundaries thereof shall be defined by Sub-Decree at the same time when the Cambodian Special Economic Zones Board issues the Final Registration Certificate to the Zone Developer.
6. The Cambodian Special Economic Zones Board has the right to withdraw the approval on the establishment of the zone and incentives which were granted through the Final Registration Certificate on the basis that the Zone Developer has not implemented at least 30% (thirty percent) of the total investment capital of the project within 365 (three hundred and sixty five) working days after receiving the Final Registration Certificate.
3.3. Procedures for Registration of the Zone Investor:
The Zone Investor, who starts its activity of production or services in the fields permitted by related Laws and Sub-Decrees in any Special Economic Zone shall complete the formalities based on the procedure, by preparing all required documents for registration of investment proposals during working hours and before the office of the Special Economic Zone Administration. The Special Economic Zone Administration has duty to decide on the registration of the investment proposal based on the legal, administrative and technical aspects and on the issuance of the Final Registration Certificate accordingly to the procedures of the investment registration set forth in the Law and Su-Decree on the Implementation of the Law on the Amendment to the Law on Investment of the Kingdom of Cambodia.
Any incentive provided to the Zone Investor shall be decided by the Special Economic Zone Administration through the “One-Stop Service” mechanism located on the site and in accordance to the relevant laws and regulations.
On all other request in the investment process of Zone Investors, the Special Economic Zone Administration shall play the role of facilitator to address issues of the Zone Investors with the relevant ministries or institution of the Royal Government of Cambodia.
CHAPTER 3
MANAGEMENT STRUCTURE AND DUTIES
Article 4: Management Structure of the Special Economic Zone
4.1. Special Economic Zones Trouble Shooting Committee (SEZ TSC)
The Special Economic Zones Trouble Shooting Committee has the duty to promptly settle all issues occurring in the Special Economic Zones, whether pertaining to technical or legal aspects, or issues under the joint jurisdiction of ministries or institutions and beyond the competence of the Special Economic Zone Administration or the Cambodian Special Zones Board.
The Special Economic Zone Trouble Shooting Committee has the further duty to be a mechanism to receive any complaint, and find solutions to that complaint filed by Zone Developers as well as by Zone Investors.
This Committee is located at the Council and has the right to use the Council’s stamp for its activities.
The composition of the Special Economic Zone Trouble Shooting Committee is as follows:
1. Co-Chairmen of the Council for the Development of
2. Minister of the Council of Ministers Member
3. Minister of Economy and Finance Member
4. Minister of Commerce Member
5. Minister of Land Management, Urbanism and Construction Member
6. Minister of Environment Member
7. Minister of Industry, Mines and Energy Member
8. Minister of Public Works and Transportation Member
9. Minister of Labour and Vocational Training Member
10. Secretary General of the Council for the Development of
11. Secretary General of the Cambodian Special Economic Zones Board Secretary
If needed, the aforesaid Committee may invite any member of the Council to attend each meeting of this Committee. The session of the meeting of the Special Economic Zones Trouble Shooting Committee is convened upon the invitation by the Secretary of Special Economic Zones Trouble Shooting Committee according to the instruction of the Co-Chairmen of the said Committee.
4.2. Cambodian Special Economic Zones Board
The Cambodian Special Economic Zones Board is the “One-Stop Service” in charge of the development, management and supervision of the operations of the Special Economic Zones.
The duties of the Cambodian Special Economic Zones Board are:
1. To be the “Etat-Major” of the Royal Government of Cambodia in relation to the policy and strategy, and to initiate plans and set direction for the development of Special Economic Zones in the Kingdom of Cambodia;
2. To determine the principles and regulations pertaining to the appointment of the Special Economic Zone Administration, to the establishment of the “One-Stop Service” mechanism in the zones, to management of general administration and functioning of the zone, to dispute resolution and eventual dissolution of the zone;
3. To give the tax and non-tax incentives to the Zone Developers and provide guidance to the Special Economic Zone Administration on eligible incentives for the Zone Investors pursuant to the laws and relevant provision in force;
4. To prepare guidelines on management and workers training, environment, construction, import/export entitlement to investment incentives and other technical affairs, including facilitation of relations with the ministries or institutions of the Royal Government of Cambodia in order to ensure smooth and effective conduct of the affairs of the Special Economic Zones;
5. To inspect all irregular activities in the zone; and
6. To address issues relative to the interests of the zone Developers, Zone Investors, workers, employees, employers and other technical and legal matters.
4.3. Special Economic Zone Administration:
The Special Economic Zone Administration is the “One-Stop Service” mechanism set up by the Cambodian Special Economic Zone Board in order to be permanently stationed in each Special Economic Zone and is structured and has the duties as follows:
1. The composition of the Special Economic Zone Administration is:
- Representative of the Special Economic Zone Board Chairmen
- Representative of the Custom and Excise Department Member
- Representative of the CAMCONTRO Member
- Representative of the Ministry of Commerce Member
- Representative of the Ministry of Labour and Vocational Training Member
The above members shall be appointed by each line ministry or institution to be permanently stationed at each zone upon its operation.
2. The office of the Special Economic Zone Administration located in the Special Economic Zone is provided by the Zone Developer, who shall supply materials, water, electricity, accommodations, and provide other supports as deemed necessary.
3. All aforementioned relevant ministries or institution shall delegate to their representative sufficient to make decisions on behalf of the ministry or institution in accordance with their respective authority in the zone.
4. The salary of the members of the Special Economic Zone Administration shall be paid by the line ministry or institution.
5.Each Special Economic Zone Administration shall have its own seal for its official use on all document used for the work of the Special Economic Zone Administration.
The duties of the Special Economic Zone Administration are:
a. To control, based on respective competence, the entry and exit of goods, means of transport and people into and from the zone; process custom formalities for import-export of goods and facilitate administrative formalities with the line ministries or institutions of the Royal Government of Cambodia for the functioning of the zone:
b.To control the implementation of the work of the Zone Developer and Zone Investors in relation to the activities in the zone in compliance with the prescribed principles;
c. To examine the Investment proposals for registration, award incentives, issue permits, licenses, and certificates of origin of products requested by Zone Investors, such decisions being made at the zone itself;
d.To control the activities in the zone according to its respective competence;
e. To cooperate with the Zone Developer to address issues under its jurisdiction;
f. To facilitate all relevant formalities in a prompt and efficient manner;
g. To prepare monthly, quarterly, semester and annual reports on activities of the zone to the relevant ministries or institutions, the Cambodian Special Economic Zones Board, and the Provincial or Municipal Investment Sub-Committee; and
h. To perform other tasks in order to coordinate and address requests of the Zone Investors with regard to ministries or institution of the Royal Government.
4.4. The Zone Developer:
The Zone Developer performs activities under the applicable laws in the
The Zone Developer has the following duties:
（a） To have sufficient capital and means to develop the infrastructures in the zone, including the human resources to manage the activities of the zone;
（b） To have the legal rights to possess the land in order to establish the zone;
（c） To construct infrastructures in the zone, including electricity, water, road, and telecommunication networks, environment protection and management network, build warehouses, fire-fighting station and other necessary facilities;
（d） To lease the land, provide services to the Zone Investors, specify the rent service fees to the Zone Investors, including fees for water, electricity , building , telecommunication networks, cleaning in the public area, security personnel and others facilities used for the daily operations of the Zone Investors;
（e） To arrange security personnel and ensure good public order in the zone at all time;
（f） To adopt the rules pertaining to services in the zone, including internal rules of the zone, and general rules for the Zone Investors and determine the types of business, production and services permitted to operate in the zone in accordance with the nature of the zone;
（g） To promote and attract investments in the zone and provide detailed information on the formalities, procedures, and eligible benefits for investing in the zone;
（h） To maintain and repair the infrastructures, ensure the quality and cleanliness and be fully responsible under the laws for all irregular activities and non-compliance with the instruction of the Cambodian Special Economic Zones Board;
（i） To submit reports to the Cambodian Special Economic Zones Board upon request and perform tax liability obligations by maintaining proper accounting books, as instructed by the Ministry of Economic and Finance; and
（j） To cooperate with and assist the Special Economic Zone Administration regarding the functioning of the zone and has close relationship with local authorities in order to address issues.
CHAPTER 4
INCENTIVES FOR THE SPECIAL ECONOMIC ZONE
Article 5: Procedures for Incentives
The Cambodian Special Economic Zone Board examines and provides incentives to all Special Economic Zones in the
5.1. The proposal for tax exemption on the import of materials, equipments and construction materials for the construction of the zone by the Zone Developer shall be submitted to the Cambodian Special Economic Zone Board for review and decision.
5.2. Duty exemption on import of production equipments, construction materials and production inputs shall be approved for the Zone Investors according to the proposal and in compliance with the law. The zone investor shall prepare a list of production equipments, construction material and Production Inputs to be imported and submit if to the Special Economic Zone Administration for approval at the zone itself. Subsequently, the Special Economic Zone Administration shall report on its decision to the Cambodian Special Economic Zones Board and relevant institution for information.
5.3 Eligible fiscal incentives for the Zone Investor shall be specified in the Final Registration Certificate to be issued to the Zone Investor in accordance with the Law and Su-Decree on the Implementation of the Law on the Amendment to the Law on Investment of the
Article 6: Tax Incentives
6.1. The Zone Developer shall receive the following incentives for their investment activities:
(a) Tax on Profit: The tax on profit exemption period shall be provided for a maximum period of 9 (Nine) yeas in compliance with Article 14.1 of the Law on the Amendment to the Law on Investment of the
(b) Import Duties and other Taxes: The import of equipments and construction materials to be used for infrastructure construction in the zone shall be allowed and exempted of import duties and other taxes.
6.2. The Zone Investor shall receive the fiscal incentives as provided in Article 14.9 of the Law on the Amendment to the Law on Investment of the
6.3. The Zone Investor entitled to the incentive on Value Added Tax at the rate of 0% shall record the amount of tax exemption for its every import. The said record shall be disregarded if the Production Outputs are re-exported. In case the Production Outputs are imported into the domestic market, the Zone Investor shall refund the amount of Value Added Tax as recorded in comparison with the quantity of export.
Article 7: Other Incentives
7.1. The Zone Developer shall receive custom duty exemption on the import of machineries, equipments for the construction of the road connecting the town to the zone, and other public services infrastructures for the public interests as well as for the interests of the zone.
7.2. The Zone Developer may request, under the form of a temporary admission (AT) the import of means of transport and machineries used for the construction of the infrastructures in accordance with the laws and regulations in force.
7.3. All imports by the Zone Developer and the Zone Investor shall comply with the relevant regulations on the Pre-Shipment Inspection (PSI).
7.4. The Zone Developer, the Zone Investor and foreign employees have the right to transfer all their income derived from the investment and salary received in the zone to banks located in other countries after payment of tax.
7.5. Apart from the fiscal incentives, the Zone Developer and the Zone Investor are entitled to obtain the investment guarantees as stated in Article 8, Article 9 and Article 10 of the Law on Investment in the
7.6. The Zone Developer may obtain a land concession from the State for the establishment of a Special Economic Zone in areas along the borders or in isolated regions, in accordance with the Law, and may lease this land to the Zone Investors.
CHAPTER 5
SPECIAL RULES RELATED TO THE MANAGEMENT OF EXPORT PROCESSING ZONE OF
THE SPECIAL ECONOMIC ZONE
Article 8: Terms of the Export Processing Zone
The Export Processing Zone of the Special Economic Zone is an area surrounded by a fence and has specific entrances/exits determined by the Cambodian Special Economic Zones Board. Only the workers, employers, visitors and competent agents duly authorized can enter or exit the zone premises and premises of the Zone Investors during working hours. At all instance, any person is not allowed to stay after working hours in the Export Processing Zone and the premise of the Zone Investors, except for the authorized permanent guards and persons authorized by the Special Economic Zone Administration.
Article 9: Time for entry into and exit from the Export Processing Zone
Schedule time for entry into and exit from the Export Processing Zone for the authorized person, including the import-export of goods shall be determined by the internal rules of the Special Economic Zone Administration according to the agreement between the Zone Developer and the Special Economic Zone Administration.
Article 10: Import-Export of Goods into or from the Export Processing Zone
Goods imported into or exported from the Export Processing Zone shall be done in accordance with the following regulations:
10.1. Import-Export of Goods into or from the Export Processing Zone shall be considered as Import-Export of Goods into or from the
10.2. The aforementioned competent agent shall prepare all forms which should be simplified, transparent and do not cause any difficulty for the control of those goods.
10.3. No retail business or relate activities shall be located in the Export Processing Zone, even though it is conducted for serving the public or social interests.
10.4. The Zone Investor, although being the owner, shall not use the Production Outputs produced in the Export Processing Zone without permission from the Special Economic Zone Administration.
10.5. The Zone Investor in the Export Processing Zone may request from the Special Economic Zone Administration to purchase goods from the domestic market or from investor, who is in the General Industrial Zone for production needs by entering specific contracts. Each sale and purchase shall be examined by the customs agent of the Special Economic Zone.
With regard to the sale in the domestic market of the Production Outputs which are not of proper quality, are of bad quality, or out-of-date goods and that the Zone Investor cannot export, the Zone Investor shall make the same request for approval as the one done for the purchase of goods into the zone.
All goods which are delivered in the domestic market, in whatever conditions, shall be required to complete the same formalities as those required for goods to be imported into the
10.6. The Special Economic Zone Administration shall have the authority to investigate at any time all suspicious cases related to irregular activities of the Zone Investors regarding the import-export, if necessary, and shall formally inform the Zone Developer and the Cambodian Special Economic Zone Board.
10.7.Any violation, by the Zone Investor in any area of the Export Processing Zone, of the principles of movement of goods, not related to the intended purpose, not compliant to the environment management regulations, production regulations, production of non authorized goods, non-conformity with production standards, the production or use of benefits provided by the State which were used for other purpose than the authorized ones, are subject to fine and punishment in accordance with the applicable laws and regulations.
CHAPTER 6
LABOR FORCE
Article 11: Usage and Management of the Labor force
The use and management of the Labor force in the Special Economic Zone shall observe the rights and protection guaranteed by the Constitution of the
Foreign managers, technicians or exerts may be employed, provided that the number of foreign staff does not exceed 10% (Ten) of the total number of its personnel.
Foreign Zone Developers and Zone Investors may be accompanied by their spouse and dependants and shall have the right to obtain a resident visa in accordance with the Immigration Law of the
Use of Labor force by recruiting and hiring Cambodian workers and employees or foreign Labor force in the proportion stated above, including the bringing of dependents, shall be done in accordance with the Labor Law and the Immigration Law, as well as other applicable regulations.
CHAPTER 7
VOCATIONAL TRAINING
Article 12: Training
The Zone Developer has the duty to cooperate with the Ministry of Labor and Vocational Training in order to facilitate the training of Cambodian workers, employees and promote new knowledge and skills to workers and employees with specific and effective programs.
CHAPTER 8
DISPUTE RESOLUTION AND VIOLATION
Article 13:
Any Special Economic Zone located in any province –municipality of the
Article 14:
The Zone Developers, Zone Investors, workers, employees, employers, and civil servants who perform their activities and works in the zone and violate any regulations specified in the Special Economic Zone shall be punished in accordance with the applicable laws.
Government officials from ministries or institution as well as officials of the Special Economic Zone Administration are prohibited to interfere in the development operations of the zone.
Any government official who is found to have acted contrary to or failed to comply with its duties and delegation of power provided by his ministry or institution, as the case may be, shall be punished in accordance with the provision of the Law on Civil Servants Statute in force.
CHAPTER 9
FINAL PROVISION
Article 15:
Provisions of the Law on Investment in the
Article 16:
This Sub-Decree shall be revised according to the changing circumstances and needs of the prevailing situations during its implementation upon the request of the Cambodian Special Economic Zone Board and approval by the Special Economic Zones Trouble Shooting Committee and, in the meanwhile, shall be arranged to become the Law on the Special Economic Zone in order to ensure the transparency and confidence from the investors.
Article 7:
The Minister in charge of the Council of Ministers, Minister of Interior, Minister of Economy and Finance, Minister of commerce, Minister of Industry, Mines and Energy, Minister of Environment, Minister of Land Management, Urbanism and Construction, Minister of all Ministries, Heads of Institutions, Provincial-Municipal Governors and related entities shall efficiently implement this Sub-Decree from the date of the signature onward.
Prime Minister
Signed and Sealed
Hun Sen
Appendix 4
CONTACT INFORMATION FOR INVESTORS
If you call from overseas, first dial country code (855 for
| Ministries | ||
| | ||
| | The Council for the Development of Tel: 023 981 154/981 156/981 183 Fax: 023 428 426/428 953/428 954 E-mail: cdc.cib@bigpond.com.kh Website: www.cambodiainvestment.gov.kh | Room 7 Wat Phnom, Tel: 023 992 355 Fax: 023 992 355 E-mail: cdc.csezb@camintel.com |
| | | |
| | Ministry of Agriculture, Forestry and Fisheries No Tel: 023 211 351/211 352 Fax: 023 217 320 E-mail: icomaff@camnet.com.kh Website: www.maff.gov.kh | Ministry of Commerce No Tel: 023 426 024 Fax: 023 426 024 E-mail: wtooffice@camnet.com.kh (ASEAN and International Org. Dept) itd@gocambodia.com (Internal Trade Dept.) camcontrol@gocambodia.com ( Camcontrol Dept.) Website: www.moc.gov.kh |
| | | |
| | Ministry of Economy and Finance No 60 Street 92, Khan Daun Penh Tel: 023 428 960/428 634/428 635 Fax: 023 427 798 Website: www.mef.gov.kh | Customs and Excise Department No Tel: 023 214 065 Fax: 023 214 065 E-mail: info@custom.gov.kh Website: www.customs.gov.kh |
| | | |
| | Ministry of Environment No Tel: 023 427 894 Fax: 023 427 844 E-mail: moe-cabinet@camnet.com.kh Website: www.moe.gov.kh | Ministry of Foreign Affairs and International Cooperation No Tel: 023 214 441 Fax: 023 216 144 E-mail: mfaicasean@bigpond.com.kh Website: www.mfaic.gov.kh |
| | | |
| | Ministry of Industry Mine and Energy No Tel: 023 211 141 Fax: 023 428 263 Website: www.mine.gov.kh | Ministry of Land Management Urban Planning and Construction No Tel: 023 215 659/215 660/215 278 Fax: 023 217 035/215 277 Website: www.mlmupc.gov.kh |
| | | |
| | Ministry of Planning No Tel: 023 720 901/720 902 Fax: 023 210 698/210 944 E-mail: mop@cambodia.gov.kh Website: www.mop.gov.kh | Ministry of Public Works and Transport No Tel: 023 427 862 Fax: 023 427 862 Website: www.mpwt.gov.kh |
| | | |
| | Ministry of Social Affair, Labor, Vocational Training and Youth No 788B Tel: 023 726 095 Fax: 023 726 086 E-mail: mosalvy@cambodia.gov.kh Website: www.mosaly.gov.kh | Ministry of Tourism No Tel: 023 212 837 Fax: 023 212 837 E-mail: info@mot.gov.kh Website: www.mot.gov.kh |
| | | |
| | Ministry of Water Resources andMeteorology No Tel; 023 724 289/724 327 Fax: 023 426 345 E-mail: mowram@cambodia.gov.kh Website: www.mowram.gov.kh | Office of Council of Ministers No Tel: 023 212 708/725 103 Fax: 023 724 935 E-mail: ucj@bigpond.com.kh Website: www.bigpond.com.kh/council-of-juists |
| | | |
| Other Public Institutions | ||
| | ||
| | National Bank of No Tel: 023 724 866 Fax: 023 426 117 Website: www.nbc.org.kh | No Tel: 023 722 054/426 101 Fax: 023 724 156 Website: www.phnompenh.gov.kh |
| | | |
| Banks: | ||
| | ||
| | Canadia Bank Plc. No Tel:(855) 23 215 286 Fax:(855) 23 427 064 Website: www.canadiabank.com | ACLEDA Bank Plc. Tel: 023 214 634 / 023 364 619 Fax: 855-23 364 914 E-mail: csok@acledabank.com.kh Website: www.acledabank.cm.kh |
| Industrial Association | ||
| | ||
| | Garment of Manufactures Association in No 175 Street 215 Tel: 023 210 225 Fax: 023 213 089 E-mail: gmac@online.com.kh Website: www.gmac.combodia.com | Tel: 023 212 265 Fax: 023 212 270 E-mail: ppcc@carmet.com.kh Website: www.pcc.org.kh |
| | | |
| | International Business Club No Tel: 023 210 225 Fax: 023 213 089 E-mail: info@sa-cambodia.com.kh Website: www.sa-cambodia.com | National Association of Tourism Enterprises No Tel: 023 427 114/ 426 456 Fax: 023 725 008 E-mail: et.tvl@online.com.kh |
| | | |
| Accounting Firms | ||
| | ||
| | PricewaterhouseCoopers( No Tel: 023 218 086 Fax: 023 211 840 | KPMG Cambodia Ltd. No 2 Street 208 Tel: 023 216 899 Fax: 023 216 405 E-mail: tax@kpmg.com.kh |
| | | |
| Law Firms | ||
| | ||
| | DFDL No Tel: 023 210 400 Fax: 023 428 227 E-mail: info@dfdl.com.kh Website: www.dfdl.com.kh | BND-Advocates & Solicitors No Tel: 023 217 510 Fax: 023 212 840 E-mail: info@bngkh.net Website: www.bngkh.net/index.php |
| | | |
| Enterprises: | ||
| | ||
| | KT Pacific Group Sangkak Phsar Damkor Khan Tuol Kok Tel: 855-23 882 423 Fax: 855-23 883 407 E-mail: sykonghuot@yahoo.com E-mail: henry_eang@yahoo.com Website: www.ktpacificgroup.com | THAI HUOT Trading Co., Ltd. Tel: 855-23 724 623 855-23 884 622 Fax: 855-23 724 622 E-mail: thaihuot@online.com.kh Website: www. thaihuot.com |
No comments:
Post a Comment