Director Public Relations and Promotion of Private Investment...2021/03/23 · 1 2 .37 1.01 4 1.12...
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Suon Sophal Director Public Relations and Promotion of Private Investment
Transcript of Director Public Relations and Promotion of Private Investment...2021/03/23 · 1 2 .37 1.01 4 1.12...
Suon SophalDirector
Public Relations and Promotion of Private Investment
GLOBAL INVESTMENT TRENDSThe COVID-19 crisis will cause a dramatic fall in FDI. Global FDI flows are forecast to decrease by up to 40 per cent in 2020, from their 2019 value of $1.54 trillion (figure 1). This would bring FDI below $1 trillion for the first time since 2005. FDI is projected to decrease by a further 5–10 per cent in 2021 and to initiate a recovery in 2022. A rebound, with FDI reverting to the pre-COVID underlying trend in 2022, is possible, but only at the upper bound of expectations.
INVESTMENT TRENDS
5%
25%
22%
1%0%
17%
19%
11%
Investment Trend by Sector (2015-2020)
Agriculture Industry Services
Energy Health care Hotel
Tourism centre Tourism
4,5
28.9
0
3,32
6.3
0
5,8
47.
00
6,0
09
.46
8,3
85.
33
8,0
14.5
7
114
.60
283.
25
48
5.0
0
44
2.0
6
1,0
12.2
5
236
.23
4,6
43.
50
3,6
09
.55
6,3
32.0
0
6,4
51.5
2
9,3
97.
58
8,2
50.8
0
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2015 2016 2017 2018 2019 2020
Million US$
Non-SEZ SEZ Total
•Phnom Penh SEZ
•Sanco Poi Pet SEZ•Poi Pet O'Neang SEZ
•Poi Pet PPSEZ (work in progress)
•Sihanoukville SEZ•Sihanoukville Port SEZ•Sihanoukville SEZ 1
•H.K.T SEZ
•Neang Kok Koh Kong SEZ
•Manhattan Svay Rieng SEZ•Tai Seng Bavet SEZ•Dragon King Bavet SEZ
•Shandong Sunshell Svay Rieng SEZ•Hi-Park SEZ•Qi Lu Jian Pu Zhai SEZ•Giga Resource Svay Rieng SEZ• Intervia Automobile SEZ
•Kampot SEZ
•Kerry Worldbridge SEZ
58 SEZs approved
39 SEZs with subdecree
23 SEZs are operational
18 SEZs with Special Admin Office
547 projects approved
Total investment (4.31 billion USD)
Suspension of VAT on Duty Free Import (letter No. 3841 MEF dated July 2nd 2019 and letter No. 3725 MEF
INVESTMENT TRENDS BY COUNTRY
18,2
23.5
8
10,2
84
.31
2,17
3.71
1,72
2.4
2
1,6
52.3
7
771.
01
68
0.6
4
64
1.12
592.
57
502.
83
419
.19
363.
05
310
.64
176
.88
48
.18
22.5
5
20.0
0
15.0
5
12.0
0
8.1
4
7.0
1
6.1
2
5.6
3
5.6
2
4.5
7
4.0
0
2.52
2.4
0
2.34
2.0
2
0.8
3
0.5
4
0.3
9
0
5,000
10,000
15,000
20,000
Cam
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Ch
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Mau
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Ind
on
esi
a
BY COUNTRY (FY 2015 – 2020)
Million US$
4,1
47.
45
1,72
2.4
2
1,39
3.9
3
262.
81
143.
83
109
.61
105.
24
98
.54
73.0
1
57.3
0
46
.47
37.4
8
33.4
8
8.2
3
5.6
3
2.52
2.0
2
0.8
3
0
5,000
10,000
Cam
bo
dia
Cay
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…
Ch
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Ho
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Ch
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U.K
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an BV
I
U.S
.A
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Mac
au
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BY COUNTRY (FY 2020)
Million US$
436
.66
83.
34
53.8
5
37.4
6
7.6
0
2.14
1.8
9
0
5,000
10,000
Cam
bo
dia
Ho
ng
Ko
ng
Ch
ina
Th
aila
nd
Ch
ina
Tai
pe
i
Mac
au
Sin
gap
ore
BY COUNTRY (as of 22nd March 2021)
Million US$
Japanese Investment in Cambodia
147.
66
25.9
9
66
.15
271.
33
78.8
7
67.
08
58.8
8
820
.08
63.
4
88
2.9
298
.89
46
.47
15 5 19 19 21 14 12 16 9 7 6 20
100
200
300
400
500
600
700
800
900
Million $ Project
No. Japanese FDI in SEZ No. Proj.
Capital (Mil US$)
1 PPSEZ 38 168.06
2 Manhattan Bavet 1 1.94
3 Tai Seng Bavet 12 59.42
4 Dragon King Bavet 2 9.36
5 Sihanoukville Port 3 22.17
6 Sanco Poi Pet 8 64.85
7 Neang Kok Koh Kong 2 14.01
Total 66 339.82
7
The Pioneers
ENHANCED SERVICES
https://qip.cdc.gov.kh
Reception Desk
(Receive project proposal and fee)
Relevant Department and Agencies
(Screen and provide technical inputs)
Management
(Decision and Seek Endorsement from higher
authorities)
Investor
Conditional Registration Certificate (CRC)
(3 working days)
Final Registration Certificate (FRC)
(28 working days)
Import Duty Exemption
(15 working days)
Pro
ject
pro
po
sal
Pe
rmits
• One Stop Services, Country Desks (Japan, Korea, EU, China)• Online Platform (QIP Online, NSW Master List, FB Notification)• Aftercare Services (Complaint Desk, Investment Tracking System)
n = 1 [(Industry<20M, Tourism <20M or Infrastructure <10M)]
n = 2 [(Industry<50M, Infrastructure <30M)]
n = 3 [(Industry>50M, Agriculture QIP,
Infrastructure>30M)]
(Article 7, Financial Management Law
2006 & 2009)Tax Holiday =
Trigger Period + 3 + n (priority
period)INVESTMENT INCENTIVES
TAX HOLIDAY (9yr) or
SPECIAL DEPRECIATION
EXPORT TAX EMEMPTION
IMPORT DUTY EXEMPTION
CORPORATE INCOME TAX (20%)
VAT exemption for projects inside SEZ
MAJOR CORPORATE TAXES
Patent Tax: Annual fee (S, M, L)
Customs Duty: 7%, 15%, 35% (MFN)
VAT: 10%
INCOME TAX (CIT): 20% generally
Stamp Tax✓ 4% transfer of property ✓ 0.1% transfer of Share
Withholding Tax✓ Rental: 10%✓ Payment to non-resident taxpayer
(interest, royalty, dividend, management/consulting): 14%
COMPARISON OF FISCAL TAX INCENTIVESCurrent Law New Law
Income Tax Exemption
• 3-6 years from profit or 6-9 years from initial income
• Or special depreciation
• 3-9 years from initial income
• Expiration of 6-year income tax exemption
• Or special depreciation
Minimum tax exemption with independent audit Report
Depreciated tax exemption during income tax exemption
Exemption from Export Tax
Exemption from export duties, unless provided in the law or Other provisions
Current Law New Law
Import Duty Exemption
Have the right to import with the exemption of customs duty:
1. Construction material
2. Production Equipment
3. Production inputs (only for export-oriented QIPs)
Have the right to import with the exemption of (1) customs duty, (2) special tax and (3) value-added tax:1. Construction material2. Production Equipment3. Production inputs
(only for export-oriented QIPs. QIPs that serves domestic market will determine the price, otherwise)
4. Construction
Equipment
Tax incentives included in the new law but not in the previous law, includes (i) VAT exemption for the purchase of local production input, (ii) 150% price-offset on research, training, transportation, accommodation, canteen, nursery, etc., (iii) Income tax exemption for QIP expansion, and (iv) Special incentives for specific investment sectors and activities that have high potential to contribute to national economic development (defined in the Financial Law for Management).
Disclaimer: without prejudice to the process of adopting new investment law, the information in this slide is provided in good faith, however we make no implication regarding the accuracy, adequacy, validity, reliability, availability or completeness of any information on new incentives above.
POLICY LEVEL• GPSF (1999)• Supported by 13 WGs• 18th GPSF adopted 17 Measures
INVESTMENT FACILITATION & AFTERCARE
• Arrangement under the Agreement between Cambodia and Japan for the Liberalization, Promotion and Protection of Investment (entered into force on 31st July 2008)
• Cambodia-Japan Public-Private Sector Meeting (bi-annual) hold 21 meetings as of 11th February 2021
Policy recommendation 2020-2021• Labor (Seniority indemnity, and Minimum wage)
• Taxation (Applying accounting treatment of CMT to whole manufacturing industries, and VAT refund of charge for meal)
• Commerce (Problems for parallel import)
• Environment (Environmental Endowment Fund)
• Power (New price table for electricity
• Logistics (Early opening of the Stung Bot border gate, speed up the process in customs clearance at the border (24/7 operation of customs office, Paperless operation of shipping documents, and price reduction of application fee for certificate of origin
PROSPECTS FOR GROWTH
WHY INVESTING IN CAMBODIA?
• STRATEGIC LOCATION• SPECIFIC ASSETS• PRO-BUSINESS APPROACH
(Heart of Potentials)
+
WTO Membership
(MFN)
GSP Market access to 32 Countries
ASEAN (heart of dynamic
region)
Strategic Location
Competitive labor force (Young & Dynamic, median age 27 years old)
Population is predominantly concentrated in the prime working age groups.
Natural Endowment (Cultural Heritage, No Natural Calamity
(no earthquake, no typhoon)
2019 census: Cambodia’s population reached over 15.55 million, a 16.1% increase over 11 years since 2008. Male 7.57 million (48.7%) and Female 7.98 million (51.3%)
SPECIFIC ASSETS
OPEN ECONOMY• F&E Treatment (Non-discrimination)• No local equity requirement • Free Transfer of capital and profits
ONE STOP SERVICES• Streamlining Procedures (Online) • Incentives & Support • Aftercare Services
FULL GUARRANTEE• No Nationalisation• No local content requirement • No restriction on FOREX • No capital & price control
PRO-BUSINESS
APPROACH
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Checklist for investment application
1. Application Form
2. Company Statute
3. Feasibility Study
4. If shareholder is juridical person:
• Power of Attorney
• Statute of Parent Companies
5. Copy of Passport (foreigner) or ID Card (Cambodian)
6. Letter of Indemnification (foreign shareholders)
7. Photo of Shareholders
8. Documents showing location and right to use (title, rental contract …)
9. Certificate of Deposit of 25% of registered capital from commercial banks
