2019 Cambodia Real Estate Investment Guidance: Cambodia’s Economic and Social Status Quo --- the Last Frontier for Foreign Investment
Emerging markets such as Cambodia often have higher risks in real estate investment, but they also have higher potential returns and more attractive capital growth rates than developed market investments. For Cambodia, however, the market is creating an increasingly secure investment environment without the risk of other frontier markets.

Investors in the real estate market in many developed regions are slowing down this year. Investors questioned their expected capital growth and return rates, especially when compared with the robust economic growth rates achieved by developing countries such as Cambodia.

Over the past decade, Cambodia's GDP has maintained an annual growth rate of about 7%. This growth shows no signs of slowing down. In fact, it attracts a new generation of investors from around the world. In addition, Cambodia has almost no restrictions on capital inflows and outflows. The Kingdom also has legislative power around laws relating to foreign ownership.

Pricing in Cambodia remains a small fraction of the cost of property that is not much compared with that in developed markets, even in neighboring countries such as Thailand and Vietnam. Therefore, the property of the kingdom is likely to receive a higher return on investment. This potential has also been supported by population growth in urban centers, annual economic growth, key infrastructure improvements and the vigorous development of tourism.

Query data show that investment from China, the United States, Singapore, Malaysia, Hong Kong, Japan, South Korea, Indonesia, France, Australia, Thailand and other countries increased significantly in quarter-on-quarter compared with India and other countries. This growth demonstrates the growing interest and trust in Cambodia's political, judicial and financial prospects.

With this in mind, the Cambodian Investment Guide provides the necessary and fair information to start your exciting and profitable journey in real estate investment in Cambodia.

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**About Cambodia**

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**I) Geographical location**

Cambodia, commonly known as the Kingdom of Cambodia, is located in the south of Indochina Peninsula in Southeast Asia. The country occupies a total area of 181,035 square kilometers, bordering Thailand in the northwest, Laos in the northeast, Vietnam in the East and the Gulf of Thailand in the southwest.

Cambodia has three major economic centers: Phnom Penh (capital), Siem Reap and Sihanouk. Other larger cities include Ta Khmau, Takeo, Sisophon, Kampong Cham, Poipet, Battambang and Kampot.

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**II) Population and Culture**

**1) Population and demographic statistics**

Cambodia's population is growing at a rate of 1.6% a year. At the beginning of this year, its population exceeded 16 million. The largest ethnic group is the Khmer people, accounting for more than 90% of the population. Ethnic minorities include Chinese, Vietnamese and Cham Muslims. Cambodia is also a popular destination for Western expatriates.

More than half of the population is under 25, and the median age for Cambodian nationals is 24.9. This disproportionate young population was a direct consequence of the civil war of the 1970s and 1980s.

In recent years, the Cambodian government has been increasingly active in developing these young workers by improving educational opportunities and developing new skills, as the current labor force is likely to increase productivity for 30 years. Similar to Vietnam, this long-term economic productivity, coupled with more education and employment opportunities, will continue to stimulate GDP growth in the coming years.

**2) Language**

Khmer is a language, but English and Chinese are widely used throughout the country. The English proficiency of the major centers makes market investment easier to manage than that of neighboring countries such as Thailand, Vietnam and Laos.

**3) Culture**

About 95% of the population is Buddhist, and Buddhism is constitutionally recognized as Cambodia's religious belief. However, in modern times, Buddhist institutions did not have the same social and political power as neighboring Thailand or Laos.

According to age and social status, Cambodian society is still highly hierarchical. In addition, the family unit is still strong compared with the economically developed Asian society. However, major cities like Phnom Penh are seeing changes because the new generation is more concerned about career development than with more traditional values.

Cambodia is one of the countries with the largest number of public holidays in the world, most of which are centered around Buddhist rituals. Last year, for example, there were 27 public holidays. Another holiday has been added this year, the "Memorial Day" on May 20. This allows up to 28 public holidays per year.

This culture has a strong sense of work-life balance and is influenced by many public holidays. However, business pressures are beginning to change this mentality in major urban centers, especially in areas where foreign enterprises are established and concentrated.

**4) Foreigners**

At present, about 150,000 foreigners live in Cambodia, most of them in the capital Phnom Penh. But the Ministry of Foreign Affairs and other government agencies did not provide any hard data. However, as statistics on foreign investment and apartment occupancy and new development projects increase, it is certain that this number is on the rise.

Cambodia has also been ranked as one of the most valuable retirement destinations in Southeast Asia by the Global Retirement Index. The index aims to compare retirement destinations for retirees, taking into account factors such as low rent and food costs, availability of health care and medical services, and extended visas.

**5) Visa requirements**

Visas are required to enter Cambodia for foreigners. According to the stay time and plan in Cambodia, there are different grades and requirements.

**Tourist visa, one month (E-visa):** When arriving at the airport, foreigners can obtain an e-visa. The validity period is one month and the cost is $35. Guests should prepare passport photos before arrival, or they will have to pay an extra $1.

**Long-term residence visa (EB-Visa):** In order to apply for extended stay (EOS), foreigners must apply for an EB visa. The cost of an EB visa depends on the length of stay. The six-month EB visa costs $160, and $290 a year.

**Work Visa/Foreigner's Work Permit:** EOS for EB visa will only be granted once. In order for foreigners to extend the stay further, they must obtain a work permit. A work permit will allow foreigners to obtain another EB visa only after evidence of employment in the country, such as a letter from an employer or sponsor. But it will also require payment of licensing fees, application fees and health certificates (higher fees are charged if health certificates are abandoned).

**Extension of the EB visa without a work permit:** If there is no work permit and foreigners can produce official letters from their employers guaranteeing a work permit, the visa can still be extended for three months for six or twelve months.

**6) Cost of living**

Compared with the more developed markets, Cambodia's food, accommodation, health care and other facilities are very low in cost. At the same time, the overall quality and diversity of these commodities are steadily increasing. This year, Cambodia's cost of living is on average 37.1% lower than that of the United States.

Soft infrastructure supporting the growing foreign population and the local middle class is developing rapidly, such as international standard schools, hospitals, shopping and entertainment centers, especially in Phnom Penh, Siem Reap and Sihanouk.

**7) Money is easy to transfer**

Unlike many other countries in the world, Cambodia does not have currency exchange controls or restrictions imposed by the government. In addition, as long as transfers are made through registered financial institutions, there are no restrictions on remittances or transfers at home and abroad.

Most transactions in Cambodia are conducted in US dollars and remittances are only applicable to applicable withholding taxes. Because of the relative stability and strength of the dollar, this will continue to facilitate international investors.
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