Sourcing from Cambodia
From searching for suppliers to having products shipped, buyers looking to diversify their sourcing within Cambodia can find step-by-step support in this guide. In a free, downloadable PDF format, each guide provides information on:
✓ Key export statistics top trading partners and principal exports ✓ Manufacturing centers major production centers, special economic zones and export processing zones ✓ Trade services trade offices, services and resources ✓ Banking & finance major commercial banks and loan availability ✓ Paying for your purchase preferred payment methods ✓ Export documentation step-by-step export procedure ✓ Settling trade disputes tips to avoid and handle trade disputes
View the complete eBook online by clicking the tabs below. You may also download your free PDF copy here.
Sourcing from Cambodia: Getting oriented
Getting oriented highlights international airports, central business districts and common office hours in Cambodia for readers.
Sourcing from Cambodia: Key export statistics
This section discusses key industries and products of Cambodia. It is part of the Developing Country Sourcing’s Sourcing from Cambodia series to empower buyers looking to enter new supplier markets in Asia.
Cambodia has come a long way in the few decades since the fall of the Khmer Rouge in 1979. Among the country’s stronger sectors are garments, textiles and agriculture. In 2014, the country exported $12.6 billion worth of products, making it the 82nd largest exporter in the world, according to UN Comtrade.
Banking, telecommunications and possibly other service industries will continue to remain attractive for foreign investors. The tourism industry also has grown in leaps and bounds, contributing significantly to Cambodia’s economy.
Cambodia’s garment industry is so robust that the top five export products of the country are fall under the garments sector, namely knit sweaters, knit women’s suits, knit T-shirts, non-knit women’s suits and non-knit men’s suits. Together, these categories contributed $5.3 billion or 41.9 percent to Cambodia’s export sales in 2014 based on UN Comtrade statistics.
The industry employs more than 700,000 workers in 536 factories.
Tourism has been the second largest source of foreign exchange for Cambodia for decades after the garment industry.
Cambodia is a growing tourist destination, with the hospitality and tourism sectors booming. The year 2015 proved to be a record-breaking year for the number of international visitors, with tourist arrivals reaching 4.7 million.
Cambodia has the cheapest agricultural land in the region with figures that are substantially lower than its neighbors Thailand, Vietnam or Malaysia. This has interested many new companies with projects to grow crops such as sugarcane, cassava, and develop timber and palm plantations.
Agricultural land in Cambodia is generally provided to qualified projects by the Cambodian government on a lease basis. Leases can be 70 years or in some cases up to 99 years.
With 67 percent of the Cambodian population engaged in agriculture, this is the primary industry of the country. Rice is the principal food crop, while rubber is the principal commercial crop. According to the World Bank, Cambodia’s economic growth in 2016 is slow due to weak agricultural growth.
Inflation, at modest rates last year, is expected to climb higher in 2017. Spurring the development of small and medium-sized firms would help to sustain and diversify economic growth.
Construction, mineral & service industries
Construction and rice milling also contribute to industry growth. They accounted for 26 percent of Cambodia’s GDP in 2015, proving that the industry has recovered well after the global economic problems of recent years.
In 2005, Cambodia attracted immense foreign investment due to newfound reserves of oil, bauxite, gold, iron and gems. To date, there has been no industrial scale extraction of precious minerals, although in recent years there have been a large number of exploration licenses granted to both local and international companies. Some companies have made promising finds, and commercial production of gold is likely to begin in 2016.
The service industry had the largest contribution to the country’s GDP. According to the CIA World Fact Book, it accounted for 43.6 percent, which was nearly twice the share of agriculture and industry.
Sourcing from Cambodia: Manufacturing centers
This section discusses key manufacturing centers in Cambodia. It is part of the Developing Country Sourcing’s Sourcing from Cambodia series to empower buyers looking to enter new supplier markets in Asia.
Cambodia is seen as the next important manufacturing and export hub particularly for garments, textiles and footwear. Most of the raw materials used for manufacturing are outsourced from its neighboring countries.
Production takes place mainly in Special Economic Zones (SEZs) scattered across the country such as Phnom Penh, Bavet, Sihanoukville, Poi Pet and Koh Hong.
As of 2014, there are 14 SEZs with more than 200 investors that generated employment for approximately 70,000 workers in Cambodia SEZs, according to the Council for the Development of Cambodia.
The government promotes SEZs heavily by granting incentives to investors as well as to Qualified Investment Projects (QIPs) located in these export zones.
Investment Incentives Granted to a Qualified Investment Project (QIP)
According to the Amended Law on Investment (LOI), QIPs are entitled to the following investment incentives:
- May elect to receive a profit tax exemption or use special depreciation.
- Profit tax exemption (Selective): A tax holiday period is composed of “Trigger period” + 3 years + Priority Period (Maximum total 9 years). An annual Certificate of Obligation Satisfaction (or “Certificate of Compliance”) has to be obtained by the QIP to be entitled “Profit Tax Exemption”.
- 40% special depreciation allowance on the value of the new or used tangible properties used in the production or processing.
- Duty free import of production equipment, construction materials, etc.
- Entitled to the same incentives and privileges as other QIP stipulated in the Amendment to the LOI.
- Entitled to 100% exemption of export tax, except for activities as stipulated in laws in effect.
- The rights, privileges and entitlements of a QIP can be transferred or assigned to a person who has acquired or merged a QIP subject to the approval of the Council for the Development of Cambodia (COC) or the Provincial-Municipal Investment Sub-Committee (PMIS).
Sourcing from Cambodia: Trade services
This section discusses trade services in Cambodia. It is part of the Developing Country Sourcing’s Sourcing from Cambodia series to empower buyers looking to enter new supplier markets in Asia.
To find the right suppliers, it is a good idea to do initial research of the home country before going on a business trip. Buyers should directly contact ministries, the companies themselves, consultancies or agents.
Ministry of Commerce
The Ministry of Commerce is considered a good option to check for registered companies and business registration. Its mission is to provide to the public all the services to meet business and investment interests and to continue implementing Cambodia’s trade policies. Its official website allows importers and buyers to conduct a company search to verify if an exporter is duly registered or not.
Business chambers, organizations and embassies
Cambodia is not without its own collection of individuals and businesses working together for a common goal, many of which can offer significant benefits to those starting up and managing operations here. With several business chambers operating in Phnom Penh, there are plenty of opportunities to meet like- minded business brains in the capital.
Here’s the list of members of International Business Chamber Cambodia (IBCC).
There are more than a dozen foreign national business chambers operating in Cambodia. They include the British Cambodian Chamber of Commerce (BritCham Cambodia), the Franco- Cambodian Chamber of Commerce (CCFC) and the German Business Group Cambodia (ADW), which were instrumental in the formation of the European Chamber of Commerce in Cambodia (EuroCham).
The embassies in Cambodia also offer a range of business-related services to their respective expatriate community, from expert advice about the investment climate to assistance in promoting a company’s product. For instance, for US companies, the US Embassy Commercial Services in Phnom Penh helps customize business needs in local markets. The services offered include trade counseling, market intelligence, business matchmaking and commercial diplomacy that can help businesses find opportunities in the Kingdom.
Cambodian Federation of Employers and Business Associations
The Cambodian Federation of Employers and Business Associations (CAMFEBA), an autonomous and independent federation of employers and Business Associations, is recognized and registered with the Ministry of Labor and Vocational training of Cambodia. CAMFEBA has become the single federation representing, promoting and safeguarding the rights and interests of employers in Cambodia.
CAMFEBA provides a forum for consultation and discussion among members on matters of common interest, and seeks for the adoption of sound principles and practices of human resource and industrial relations through information, legal advice, research, training and other activities.
Many foreign companies want to enter into a business relationship with a local Cambodian company or individual.
This information can be found online through different consulting companies:
• Alpha Consulting International Corp., a reliable information network that has many experts who can help with in-depth research information and data and strategic advice on issues relevant to factors that could decide the success and failure of business operations in Cambodia.
• Cambodia Consultant Co. Ltd, a local company registered
with the Ministry of Commerce under the prevailing law of Kingdom of Cambodia and provides many services with the purpose of tax consultancy, business registration, recruitment, training, home training, human resource policy, accounting policy and software.
• Cambodia Yellow Pages, an information network that provides online lists of consulting companies in Cambodia
Construction and properties company directories
There are business companies who are wishing to lay a foundation that have knowledge of construction, property and development situation in Cambodia.
The Cambodia Constructors Association (CCA) provides an online network information of current news and directories of construction companies in the country.
Procedures for setting up a company in Cambodia
To start a business in Cambodia, investors have to follow administrative procedures. The time needed to get started depends on the nature of the planned operation and the complexity of the project.
In certain circumstances, an investor can start operations within a month.
Sourcing from Cambodia: Banking and finance
This section discusses banking & finance in Cambodia. It is part of the Developing Country Sourcing’s Sourcing from Cambodia series to empower buyers looking to enter new supplier markets in Asia.
Cambodia boasts a huge number of banks, with the total number rising from 486 in 2013 to 541 commercial banks in 2014 registered in the over-saturated market.
Cambodia’s economy is growing with the National Bank of Cambodia (NBC), which supervises and monitors all banking institutions, including 36 commercial banks, seven specialist banks and 44 registered micro-finance institutions (MFIs).
Outstanding loans and savings deposits in a series of MFIs continued to grow in 2014, with total loans from the 42 MFIs hitting more than $1.63 billion – a 44 percent increase since 2012.
There are three types of banks in Cambodia – commercial, specialized and Micro Finance Institutions (MFIs). Below is the list of commercial and specialized banks in the country.
- ACLEDA Bank PLC (ACLEDA)
- Advanced Bank of Asia Ltd (ABA)
- Agribank Campuchia Branch (AGRIBANK)
- Australia and New Zealand Royal Bank (Cambodia) Ltd (ANZ Royal Bank)
- Bank of China Limited Phnom Penh Branch (BOC)
- Bank of India Phnom Penh Branch (BOI)
- Bank for Investment and Development of Cambodia Plc (BIDC)
- Booyoung Khmer Bank (BKB)
- Cambodia Asia Bank Ltd (CAB)
- CIMB Bank PLC (CIMB)
- Cambodia Mekong Bank Public Ltd (CMB)
- Cambodian Commercial Bank (CCB)
- Cambodian Public Bank (Campu Bank)
- Canadia Bank PLC (CNB)
- First Commercial Bank Phnom Penh Branch (FCB)
- Foreign Trade Bank of Cambodia (FTB)
- HwangDBS Commercial Bank PLC (HDBSCB)
- Kookmin Bank Cambodia PLC (KBC)
- Krung Thai Bank PLC, Phnom Penh Branch (KTB)
- Maruhan Japan Bank (MJB)
- Maybank Phnom Penh Branch (Maybank)
- OSK Indochina Bank (OSKIBL)
- Phnom Penh Commercial Bank (PPCB)
- Saigon Thuong Tin Commercial Joint Stock Bank (Sacom Bank)
- Shinhan Khmer Bank (SKB)
- Singapore Banking Corp. Ltd (SBC)
- Union Commercial Bank PLC (UCB)
- Vattanac Bank Ltd (VBL)
- ANCO Specialized Bank (ASB)
- Angkor Capital Specialized Bank (ACSB)
- CAMKO Specialized Bank (CKB)
- Tomato Specialized Bank (TSB)
- First Investment Specialized Bank (FISB)
- PHSME Specialized Bank (PHSME)
- Rural Development Bank (RDB)
- Credit Bureau of Cambodia
Sourcing from Cambodia: Paying for your purchase
This section discusses payment options in Cambodia. It is part of the Developing Country Sourcing’s Sourcing from Cambodia series to empower buyers looking to enter new supplier markets in Asia.
Sourcing from Cambodia: Export documentation
This section discusses export documentation in Cambodia. It is part of the Developing Country Sourcing’s Sourcing from Cambodia series to empower buyers looking to enter new supplier markets in Asia.
In Cambodia, the procedural requirements and documents for exporting and importing a standardized cargo of goods associated with every official procedure are counted—from the contractual agreement between the two parties to the delivery of goods—along with the time necessary for completion. Document preparation usually takes about two weeks.
Export and import documents
Below is a list of documents needed to trade internationally in Cambodia.
The export documents consist of:
- Bill of lading
- Certificate of origin
- Commercial invoice
- Customs export declaration
- Export permit
- Inspection report from Cambodia Import Export Inspection
- and Fraud Repression Directorate Generalor(CAMCONTROL)
- Insurance certificate
- Packing list
- Terminal handling receipts
The import documents consist of:
- Certificate of origin
- Cargo release order
- Commercial invoice
- Customs import declaration
- Import permit
- Insurance certificate
- Packing list
- Tax certificate
- Terminal handling receipts
- Road transport document
Border and documentary compliance
Border and documentary compliance covers port handling and clearance and inspection by customs and agencies.
Documentary compliance includes documents needed for submission during transport, clearance and inspection.
The process is likely to include the following steps, though the order may be different depending on the port: submission of import documents; registration of manifest and customs declaration; verifying of documents and declaration; calculation and payment of duties; random inspection.
Sourcing from Cambodia: Settling trade disputes
This section discusses settling trade disputes of Cambodia. It is part of the Developing Country Sourcing’s Sourcing from Cambodia series to empower buyers looking to enter new supplier markets in Asia.
Trade disputes are common in Cambodia but they can be minimized or avoided with extra care. Going through the process of settling trade disputes can be a frustrating experience and wise buyers not willing to spend both time and money on disputes that could take years to resolve would rather choose other options to settle the disagreement.
There are currently two main forms of dispute settlement in Cambodia: the courts and alternative dispute resolution (ADR) mechanism, which includes mediation and arbitration.
The 2006 Law on Commercial Arbitration is modeled after the United Nations, Commission on International Trade Law (UNCITRAL). However, the idea of arbitration is new to Cambodia and there has been very little use of this method.
The most popular form of dispute resolution in Cambodia has always been mediation, where a public official is appointed by the parties to resolve the dispute and or the courts. Mediation is nonbinding.
The courts continue to play a major role in resolving commercial disputes in Cambodia but this can often be a costly and lengthy process. Any decision made by the judge can be appealed to a higher court.
National Commercial Arbitration Center
The National Commercial Arbitration Center (NCAC) arbitrates commercial disputes and allows for international arbitrators. Investors could go to seek advice from the center whenever they want in Cambodia.
The NCAC, launched in 2013, plays an important role in attracting investment to Cambodia by offering additional reassurance to businesses.
NCAC is encouraged and empowered to provide a full range of ADR services for commercial disputes and contribute to the creation and maintenance of enabling environment for cross- country trade and investment.
For this reason, NCAC is planning to put in place necessary procedure and mechanisms for provision of mediation/
conciliation services with reasonable and affordable service charges to parties who choose mediation/conciliation as a step for settling their commercial disputes before going to arbitration or court if the parties fail to reach settlement agreement after attending mediation/conciliation process.
Mediator/Conciliator can be appointed from among qualified NCAC arbitrators who received professional training on mediation/conciliation skills or from among external mediators/ conciliators who associate with NCAC.
Sourcing from Cambodia: Product gallery
Choose from our gallery of innovative and new products from Cambodia selected by our export consultants and as featured on the Analyst’s Choice section of GlobalSources.com. For more Cambodian suppliers and their latest products, visit DevelopingCountrySourcing.com.
The model PE155 under the Peace Handicraft series is a three-pendant necklace made of recycled bomb shrapnel.
Orders are delivered in 14 to 21 days. Export markets are North America, Europe and Asia.
This Rajana-brand bangle is crafted from recycled bomb shrapnel and features a distinct Khmer pattern.
Orders as few as 50 pieces are welcome and the delivery lead time is 14 to 21 days. An advanced payment of 50 percent via TT is required.
The main export markets are North America, Europe and Asia.
This purely handmade tote bag is made of recycled rice sacks. It measures 30x17x47cm but can be folded neatly when not in use for convenient storage. Different colors are available.
The minimum order requirement is 10 pieces. An advanced payment of 50 percent via TT is required.
Model 139051 is a hanging ornament in Mekong horse design. The purely handcrafted decor is made of 100 percent pure silk.
The minimum order requirement is 100 pieces and delivery is within 21 to 28 days. An advanced payment of 50 percent via TT is required. requirements.