Unlocking Opportunity: A Deep Dive into Cambodia’s New Investment Law

In a bold stride toward economic modernization and investment growth, the Royal Government of Cambodia enacted a new Law on Investment on October 15, 2021, replacing its original 1994 legislation (last amended in 2003). This legal overhaul marks a turning point in Cambodia’s journey toward becoming a high-value, innovation-driven economy. With a firm focus on transparency, competitiveness, and development, the law sets the stage for a new era of investment potential.

Why Cambodia Needed a New Investment Law

Cambodia’s rapid economic transformation over the past two decades has made it clear: a more modern, inclusive, and strategic legal framework was needed. The country is diversifying beyond traditional sectors like garments and agriculture, exploring avenues such as digital services, technology, green energy, and advanced manufacturing.

The new law’s objective? To create a favorable business climate that:

• Aligns with international best practices,
• Encourages sustainable, high-quality investment, and
• Fosters long-term socio-economic development.

Unpacking the Investment Incentives

A key highlight of the new law is its multi-tiered incentive system designed to reward investment in priority sectors. There are three distinct types of incentives:

1. Basic Incentives

• Income tax exemption ranging from 3 to 9 years, depending on the investment type.
• Customs duty exemptions on imports of machinery, raw materials, and equipment.
• Relief from prepayment of income tax and minimum tax, subject to certain conditions.

2. Additional Incentives

These are provided to promote activities that further national development goals:

• Research and development (R&D) initiatives.
• Skills development and workforce training programs.
• Environmentally friendly investments and green technology.
• Construction of dormitories and welfare facilities for workers.

3. Special Incentives

Reserved for investments with strategic significance, such as major infrastructure or tech innovation projects. These incentives can offer more flexible and favorable terms, often defined through sub-decrees or the Financial Management Law.

Sectors eligible for incentives include 19 key areas like high-tech manufacturing, education, logistics, agriculture, healthcare, digital platforms, and renewable energy.

Legal Protections Investors Can Count On

To build investor trust and ensure long-term stability, the law includes a range of guarantees:

• Equal treatment for both foreign and domestic investors.
• Protection against expropriation: Investments cannot be nationalized without just compensation.
• Free transfer of capital: Investors can repatriate profits, dividends, and capital freely.
• Intellectual Property Rights enforcement in line with global standards.

Such guarantees are essential in elevating Cambodia’s status as a secure and predictable investment destination.

Streamlined Investment Procedures: Less Red Tape, More Action

The new law significantly reduces bureaucratic friction. Investors no longer need to go through a two-tier approval process. Instead, a single-step registration with the Council for the Development of Cambodia (CDC) or relevant Provincial Investment Sub-Committees is now sufficient.

Here’s what’s new:

• Faster turnaround: Investment Registration Certificates are now issued within 20 working days.
• Digital ease: Applications can be submitted online or in person.
• Tech-savvy governance: QR-coded certificates enhance transparency and integration with other systems.

Investors also benefit from clear rules for project expansion, ownership transfers, and continuity of incentives.

What Are Qualified Investment Projects (QIPs)?

To tap into the full range of benefits, ventures must be registered as Qualified Investment Projects (QIPs). These are categorized as:

• Export QIPs: Primarily for overseas markets.
• Supporting Industry QIPs: Suppliers for export-oriented industries.
• Domestic QIPs: Focused on Cambodia’s internal market.

Variants like Expanded QIPs (EQIPs) and Guaranteed Investment Projects (GIPs) provide flexibility for businesses planning to grow or restructure operations.

Sub-Decree 139: Guiding the Law’s Implementation

In June 2023, the Cambodian government introduced Sub-Decree 139 to support the Investment Law’s roll-out. This sub-decree:

• Defines sectors ineligible for incentives (Negative List).
• Clarifies capital requirements, incentive eligibility, and compliance procedures.
• Strengthens monitoring mechanisms to ensure transparency.

Such clarity reduces uncertainty and enhances investor confidence.

A Blueprint for the Future

Beyond being a set of legal rules, Cambodia’s new Investment Law is a strategic vision for the nation’s future. Through this framework, the government aims to:

• Elevate Cambodia to upper-middle-income status by 2030,
• Reach high-income country status by 2050, and
• Build resilience against global economic shocks.

The law supports integration with regional frameworks such as:

• The Regional Comprehensive Economic Partnership (RCEP),
• The Cambodia-China Free Trade Agreement, and
• Other bilateral and multilateral trade agreements.

By encouraging innovation, sustainability, and inclusive development, Cambodia is signaling to the world that it’s open for business—with a future-focused mindset.

🚀 Ready to Invest in Cambodia? Let Adaeng Development Be Your Guide

Adaeng Development Co., Ltd. is your all-in-one partner for entering and thriving in Cambodia’s growing investment ecosystem. From land acquisition to government approvals, we turn opportunity into impact—smoothly, strategically, and successfully.

💼 What We Do:

• Land Purchase & Holding: We acquire and manage land on behalf of foreign clients, ensuring full legal compliance.
• Investment Registration: We streamline the process of securing QIP status and other required authorizations.
• Feasibility Studies & Project Proposals: Let us build your business case and win over stakeholders.
• Property Development & Licensing: From zoning to construction permits, we cover it all.
• Regulatory Navigation: We help you stay on the right side of Cambodia’s evolving legal landscape.

🌟 Why Businesses Choose Adaeng:

• Deep expertise in Cambodian investment law and trade policy
• Proven success across multiple large-scale projects
• A trusted network within government, private sector, and real estate
• Dedicated service with international standards and local insight

🔗 Let’s Build Together Cambodia is full of promise—and we’re here to help you seize it. Visit www.adaeng.co or contact us now to schedule your free consultation.