Investment Hightlights
Cambodia Weekly Financial News Jan 30 ~ Feb 03, 2023
2023-02-04View Times｜ 1080
Cambodia Weekly Financial News
Jan 30 ~ Feb 03, 2023
30 January 2023
South Korean agency pushes investment in auto parts, tech
YU Jeoung-yeol, president of the Korea Trade Investment Promotion Agency (KOTRA), said he is encouraging more investors to do business in Cambodia, especially in vehicle spare parts. At a recent meeting in Seoul with a Cambodian delegation led by Minister of Commerce Pan Sorasak, Yu expressed his firm belief that the Cambodia-Korea Free Trade Agreement (CKFTA) will boost trade between the two countries. “Currently, more than 200 South Korean companies invest in Cambodia, and we are working to attract more, especially in auto or vehicle parts as well as timber products,” Yu said. Cambodia will focus on expanding existing opportunities to expand the production of labor-intensive automotive parts for export. These include, among others, electrical wiring looms, seats, and simple electric and electronic parts for motorcycle assembly.
Source: The Phnom Penh Post
30 January 2023
GDT changes VAT rules for e-commerce transactions for taxable persons who are non-resident taxpayers
The General Department of Taxation (GDT) of the Ministry of Economy and Finance (MEF) has changed its instruction on implementing the value-added tax (VAT) on e-commerce transactions for taxable persons who are non-resident taxpayers including electronic platform operators, who do not have permanent establishments in Cambodia, said a statement. Non-resident taxpayers who do not have permanent establishments in Cambodia but supply digital goods or services or any e-commerce activity from the rest of the world to the resident persons who are enterprise taxpayers in the self-assessment taxpayer or/and physical persons in the country are obliged to implement the revised rules. According to the statement released on Thursday last week, non-resident taxpayers who have transactions only with subsidiaries or branches in Cambodia are not obliged to apply for simplified VAT registration, but the subsidiaries or branches in the self-assessment taxpayers are required to send notifications to Cambodia’s internal tax authority GDT.
Source：Khmer Time
30 January 2023
GDT intends to simplify tax payments for all businesses
Cambodian taxes can currently be paid at 10 commercial banks, thanks to memorandums of understanding (MoU) signed by the Ministry of Economy and Finance in a bid to improve tax administration efficiency and make life easier for taxpayers, according to a General Department of Taxation (GDT) statement. The statement was issued in conjunction with a January 26 hybrid-format meeting between a GDT working group and partner banks to discuss: technical issues involving tax payments; ways to improve the implementation of the MoU; and overall progress. The department – which is under the finance ministry – listed the banks as Canadia Bank Plc, ACLEDA Bank Plc, Cambodian Public Bank Plc, Vattanac Bank, J Trust Royal Bank Plc, Cambodia Post Bank Plc, Foreign Trade Bank of Cambodia, SATHAPANA Bank Plc, Advanced Bank of Asia Ltd, and Wing Bank (Cambodia) Plc. At the meeting, GDT deputy director Ken Sambath commented that the partnerships, along with the e-Filing and e-Payment systems, put services closer to taxpayers and make paying taxes far easier, according to the statement.
Source：The Phnom Penh Post
30 January 2023
State revenues from gold production top $15M
Cambodia has netted more than $15 million from gold production as of end-December, which has yielded over 5.3 tons of Dore bars – a semi-finished product that is smelted at a mine, usually at about 90 percent purity – since the first commercial gold pour took place in June 2021. These figures were presented at a public forum on macroeconomic management and the 2023 budget law last week by officials from the Ministry of Economy and Finance’s General Department of State Property and Non-Tax Revenue. The officials also reported that a total of seven companies currently have active gold exploration licenses, all of which are in the four provinces of Mondulkiri, Ratanakkiri, Battambang, and Preah Vihear.
Source：The Phnom Penh Post
31 January 2023
Cambodia records the region’s steepest tax-to-GDP ratio rise
The tax-to-GDP ratio in Cambodia registered an 80 percent growth, from 10 percent of the GDP in 2009 to 18 percent in 2020, the highest rise among the eight countries of the Southeast Asia region featured in a study by the CamEd Business School, recently, reigniting debates about whether the rising level of taxation is good for attracting investors and suited for the continued development of the country. According to the study, in 2020, Cambodia stood in the top layer, next to Vietnam which has a tax-to-GDP ratio of 23 percent, whereas the Kingdom had the lowest ratio in 2009 among the countries. Vietnam’s tax-to-GDP ratio was 18 percent in 2009. The tax-to-GDP ratio for the study took into account revenue collection from both tax and customs.
Source：Khmer Time
31 January 2023
Cambodia exports surge 16% to $22.4B
The government’s strategic measures and reforms helped Cambodia register remarkable export growth, the Ministry of Commerce said yesterday. Cambodia’s foreign international trade amounted to $52.4 billion in 2022, up 9.1 percent over a year earlier, the ministry’s report showed, adding that the Kingdom’s export rose by 16 percent to $22.4 billion. Exports grew significantly in 2022, thanks to the reopening of socio-economic activities in the country from early November 2021, after the vaccination for Covid-19 and lifting of restrictions on trade, Pan Sorasak, Minister of Commerce, said at an annual meeting to review works in 2022 and set objectives for 2023 yesterday.
Source：Khmer Time
31 January 2023
SERC ends GoldFX Investment cash claim case
The Securities and Exchange Regulator of Cambodia (SERC) has completed the case of cash claim from the GoldFX Investment Co Ltd after being appointed by Phnom Penh Municipal Court and receiving the complaint from the company’s customers to handle the case as per the applicable laws in the Kingdom of Cambodia, according to a statement of SERC. The statement released yesterday by SERC stated that SERC has compromised the dispute between GoldFX Investment and its customers completely and closed the civil case through a mechanism initiated by the regulator. “As aforementioned, the public, please kindly be notified,” pointed out the statement dated January 30, 2023. “Individuals who have not received the cash or have complaints to claim the cash … are required to file their respective lawsuits with the competent court as per the legal procedures,” the statement pointed out, but the document did not reveal the reason behind the dispute and amount of cash that the customers have claimed from GoldFX Investment.
Source：Khmer Time
01 February 2023
Mr. Sou Socheat: A major telecommunications company will issue securities this year
The Director General of the Securities and Exchange Commission of Cambodia, Mr. Sou Socheat, said that a major telecommunications company will issue securities in the near future. Mr. Sou Socheat said at a recent seminar on the Cambodia Securities Exchange organized by the American Intercontinental School that the large company would be able to attract a lot of public attention because people paid. Make money every day on mobile as well as the internet, so they will be interested in owning that company. At the same time, the Royal Government delegate in charge of the Director General of the Cambodia Securities Exchange, Mr. Hong Sohour, also said that now that the public is more aware of the investment in this sector, the stock market is crowded with people. Open a trading account. "The growth of our stock market has increased on the amount and number of accounts traded daily," he said.
Source：Cambodia Financial Time
01 February 2023
ASEAN QR code, P2P Lending Platform mooted
In a move to boost trade and commerce in the region, the ASEAN Business Advisory Council (ASEAN-BAC) will work for a common banking QR code and help introduce the ASEAN P2P (peer-to-peer) Lending Platform. This was announced by the Indonesian Chamber of Commerce and Industry (Kadin), chair of the 2023 ASEAN-BAC on the occasion of the chairmanship handover ceremony recently in Jakarta. Kith Meng, President of the Cambodia Chamber of Commerce (CCC), virtually handed over the chairmanship to Arsjad Rasjid, Chairperson of Kadin. Rasjid told the media that Kadin will collaborate with all central banks of ASEAN countries for developing the common QR code. He also added that WIKI Entrepreneurship will support international trade between Southeast Asian countries, especially for micro, small, and medium enterprises (MSMEs). Meanwhile, Dalton Wong, President of the Indonesian Chamber of Commerce in Cambodia, said that a roadshow would be held soon in Phnom Penh on the P2P Lending Platform. Meanwhile, at the handover ceremony, Kith Meng highlighted the achievements made by ASEAN-BAC during 2022 in promoting and enhancing the role of the private sector to become a good partner in building the ASEAN Economic Community.
Source：Khmer Time
01 February 2023
Trade bodies CBC, and IDI team up
The Bangkok-based Cambodia Business Council (CBC) and the local Innovation and Development Investors Association (IDI) have joined forces to engage with and attract more investors as well as to improve Cambodian exports regionally and globally. A memorandum of understanding (MoU) was signed to this effect on February 1, between CBC vice-president Sar Sarin and IDI chairman Hor Sereyvath at the IDI’s offices in Phnom Penh. Established a couple of years back, the CBC’s main objectives include promoting Cambodia’s economic diplomacy agenda to foreign countries as well as opening channels for Cambodian-made products to reach a wider international audience, Sarin told the MoU signing ceremony. “Economic diplomacy” refers to the use of government resources at home and abroad to bolster a country’s economic growth and achieve foreign policy objectives and other national interests through the advancement and encouragement of trade, investment, employment, and other forms of economic activity.
Source：The Phnom Penh Post
01 February 2023
Sumitomo Mitsui Banking Corporation eying investment opportunities in Cambodia
A delegation of Sumitomo Mitsui Banking Corporation (SMBC), led by its Managing Executive Officer and Co-Head of the Asia Pacific Division Rajeev Kannan, is seeking investment opportunities in Cambodia, especially in areas of logistics and tourism port. The aim was shared during their courtesy visit to Sun Chanthol, Senior Minister and Minister of Public Works and Transport, at the ministry office in Phnom Penh on Monday. SMBC expressed their particular interest in the Kampot International Tourism Port and Logistics Master Plan Development Project which consists of some 332 projects worth more than $48 billion. On the occasion, Sun Chanthol informed his guests that transport infrastructure and logistics development remains the main strategy of the Royal Government of Cambodia to enhance the national economy.
Source：Khmer Time
02 February 2023
Be mindful of informal financing, NBC warns
The National Bank of Cambodia (NBC) and National Police on February 2 issued a joint statement warning of the risks associated with informal financial services, which it said could put borrowers in excessive debt or otherwise upend their lives. The statement mentioned that informal financial entities are haphazardly promoting and providing credit and other services through social media, mobile apps, and other digital means without express permission from NBC. Many of these entities charge exorbitant interest rates and otherwise extract excessive profits from borrowers through misleading or fraudulent contracts or implementation thereof, saddling borrowers with crippling debt and leading to other socio-economic consequences, it noted. This, it said, undermines financial stability and inclusion, as well as public trust and growth in the Cambodian banking sector as a whole.
Source：The Phnom Penh Post
02 February 2023
Trade with Malaysia soars 23% to $620M in 2022
The merchandise trade volume between Cambodia and Malaysia totaled $620.373 million in 2022, rising by 23.33 percent over a year earlier, with Cambodian exports accounting for an 18.03 percent share, down by 2.11 percentage points on a yearly basis, according to the General Department of Customs and Excise (GDCE). Malaysia was Cambodia’s 16th-largest trading partner for the third consecutive year in 2022, accounting for 1.18 percent of the global total of $52.425 billion, up 0.14 percentage points year-on-year. Last month alone, the Cambodian-Malaysian merchandise trade was to the tune of $41.57 million, down 13.1 percent from $47.86 million in December 2021 and down 19.1 percent from $51.36 million in November 2022.
Source：The Phnom Penh Post
02 February 2023
Cambodia eyes exporting 1 million tons of milled rice by 2025
The Cambodia Rice Federation has set an ambitious goal to export at least a million tons of milled rice by 2025, an over 50 percent increase compared to the export figure in 2022. By 2023, Cambodia is looking to reach milled rice exports of 750,000 tons, an 18 percent increase compared to exports of 637,004 tons in 2022, said Chan Sokkheang, president of the Cambodia Rice Federation. “The Cambodian Rice Federation has set two goals for rice exports, which by 2023 will boost exports to 750,000 tons and reach 1 million tons by 2025,” Sokkheang said at an annual meeting of the Ministry of Commerce. CRF has also set a goal to facilitate profitable, sustainable, environment-friendly rice business by launching a number of key activities, he said.
Source：Khmer Time
02 February 2023
Gov’t to launch informal economic policy this year
The Royal Government of Cambodia (RGC) is set to prepare and launch the informal economy policy before the end of 2023 to develop and upgrade the informal sector in a management system under the formal economy, said a top official of the Ministry of Economy and Finance (MEF) in a press release. The new move is expected to help increase tax revenue. The press release issued by the General Department of Taxation (GDT) of MEF revealed the upcoming policy which is one of the recommendations provided by MEF’s Minister Aun Pornmoniroth during the meeting of GDT regarding tax collection results produced by GDT in 2022 and its plan for 2023. The conference was organized at GDT on Tuesday this week. The release did not provide the policy details, summary, or draft. However, experts said the informal economic policy is expected to encourage or force business owners in the formal sector to register their businesses in the formal system, which would help increase internal tax revenue for the government despite some challenges in terms of competition.
Source：Khmer Time
03 February 2023
RPR sets deadlines for report submissions, or face legal action
The Real Estate Business and Pawnshop Regulator (RPR) under the Non-Bank Financial Service Authority (FSA) of the Ministry of Economy and Finance (MEF) has issued notifications for businesses that provide non-bank financial services and products to customers to submit periodical reports on time, said a top official of RPR. The official said that the notification has been issued for owners of businesses, enterprises, or projects that have been licensed to run businesses in housing development, condominium development, land lot development, immovable property service provision, pawnshops, and collateral service provision to their customers in Cambodia.
Source：Khmer Time
03 February 2023
Cambodia plans to establish a Cambodian private business center in China
The Ministry of Commerce has been preparing for the establishment of five Cambodian private business centers in the main cities of China in order to promote the sale of Cambodian products in the Chinese market. The center has been planned for five locations in China: Changchun, Harbin, Nanjing, Taiyuan, and Zhengzhou. Pan Sorasak, Minister of Commerce, said the Cambodian private business center will further promote and drive sales of Cambodian products on the Chinese market. The ministry is highly committed to driving the growth of the trade sector by turning challenges into opportunities through in-depth reforms in all areas, reducing costs and strengthening the competitiveness of Cambodia’s exports to various markets, and creating a favorable environment for doing business and investing in Cambodia, he said.
Source：Khmer Time
03 February 2023
Consumer credit applications were down 4% in the fourth quarter
The number of consumer credit applications for loans in the form of personal finance, credit card, or mortgages decreased by 4 percent in the fourth quarter of 2022 compared with the last quarter, according to the Consumer Credit Index of the Credit Bureau Cambodia (CBC). While applications for personal finance declined 6 percent, credit card applications came down 3 percent, but mortgage applications increased 15 percent in the fourth quarter. The consumer credit quality, which indicates creditworthiness or risk of default of a portfolio and is calculated by taking the ratio of late repayment 30 days past their due date, increased by 2.51 percent indicating a marginal drop in credit quality. With an increase of 3.45 percent, the number of loan accounts reached around 1. 54 million, according to the CBC report.
Source：Khmer Time
