The changes over the past few years and up to 2022 have been long term positive for Cambodia’s economic growth and the real estate sector in particular. It’s easy to gloss over the number and speed of change in the Kingdom, but looking back and being open to change reveals how international and domestic investors and property buyers should positively assess opportunities in the Cambodian market in full swing. growth.
Better regulations and systems
New e-commerce laws will make it easier for foreign businesses to operate in the Kingdom in the post-pandemic era and the easing of restrictions allowing large investments through cashless and digital payment systems are positive steps. The World Bank also confirmed that Cambodia has “one of the fastest increases in financial inclusion” among developing economies in East Asia and the Pacific, adding that “double-digit increases in possession of accounts were carried out in Cambodia”.
NBC also said a real-time gross settlement (RTGS) system is being developed to facilitate high-value transactions.
More cashless payments and e-KYC will help raise awareness and transparency, as well as promote the use of new technologies and innovations, especially in the banking and financial sectors of the Kingdom. Binance signing a Memorandum of Understanding with the Securities and Exchange Regulator of Cambodia (SREC) means that the country will receive support and development of the legal framework to regulate and strengthen digital asset activities in the country, at a time when Blockchain technology is increasingly used. used and adopted in the region and nationally.
Furthermore, the signing of a memorandum of understanding between Prince Group, Cambodian Investment Management and Immobilier.com.kh Collaborating on opportunities to attract inbound investment through the Cambodian Trust Law is also important in attracting investment by providing a seamless, trustworthy and transparent experience for foreign investors. Tom O’Sullivan (CEO of Immobilier.com.kh) said it “offers a legal and transparent vehicle to facilitate real estate transactions for foreign investors.”
From an administrative point of view, the establishment of 25 Provincial Capital Investment Sub-Committees (CPISC) launched in Cambodia in 2022 will help decide and accelerate private investments and resolve disputes related to investment projects for allow for decision-making at the sub-committee level. -National level.
Current and potential investment
According to a report recently published by the Ministry of Economy and Finance (MEF), the real estate sector grew by 2.5% in 2022, and in the first four months of 2022 there was an increase of 6 .7% of house sales in condos and villas. Residential villa construction activity increased by 60% while apartment construction increased by 183% in the first five months of 2022.
A total of 1,679 new construction projects were approved nationwide in the first five months of 2022, and while that figure is down 8.2% year-on-year, investment in construction are long-term commitments that require significant capital.
Foreign direct investment for 2022 and 2023 will recover to around 12% and 11.6% of gross domestic product (GDP) respectively, while construction is expected to increase by 7.2% in 2023 and real estate is expected to increase by 5, 2% % in 2023.
If these predicted datasets don’t provide enough positivity, the recent EXPO 2022 attracted over 12,000 attendees and $30 million in home and property sales, which reflects real market positivity. A large-scale event was again organized for the first time in a long time and it was a great opportunity for Cambodian market leaders to collaborate in a mind-sharing exercise that had not been possible for two years. This has led to improved assessment, planning and cooperation to ensure that the sector and the country are doing their best to continue attracting investment and economic growth.
Why Cambodia remains attractive for investors
As of July 2022, the Kingdom of Cambodia has lifted the quarantine requirement for all unvaccinated or not fully vaccinated travelers visiting the country, while the Cambodia site tops the rankings in the Nikkei COVID-19 Recovery Index – despite lingering concerns about virus variants that have slowed tourism growth. Tourism figures are on the rise and we are still in the middle of Cambodia’s traditional calm rainy season – but the latest estimate from the Director General of Tourism Development and International Cooperation of the Ministry of Tourism, Thong Rathasak, places a figure of 1.3 million tourists this year. About 500,000 tourists visited it in the first six months of the year.
More and more airlines have offered and increased the number of flights and destinations to and from Cambodia in the first half of 2022 as well, which is positive – providing travelers with a variety of options and catering to different budgets. The business community continues to confirm an increase in meetings with international investors and business clients who are once again treading these shores for the first time in more than two years.
Foreigners will also seek to invest in Cambodia via the new 10-year visa (called golden visa) which falls under the Cambodia My 2nd Home (CM2H) program. The CM2H program is open to all countries recognized by Cambodia with certain investment and financing requirements.