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Why is Cambodia the perfect location to set up your facility?
The Manhattan Special Economic Zone is the first special economic zone, covering 400 hectares with over 36,000 skilled workers, it is the largest special economic site in Cambodia.
Cambodia is a popular location for production facilities due to its relatively low labor costs, favorable government policies and trade agreements, and proximity to major markets such as China and the United States. Additionally, the country has a large and growing workforce, which is relatively young, and a significant number of workers experienced in the manufacturing sector. Cambodia is also a member of various trade agreements such as ASEAN, World Trade Organization and the EU’s Everything But Arms agreement which allow for duty-free exports to those markets. These factors make MSEZ an attractive location for companies looking to set up and operate production facilities.
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8 Advantages of Investing in Cambodia
No Foreign Exchange Control
Cambodia does not have strict foreign exchange controls, which allows for relatively easy movement of funds in and out of the country. This is an important factor for companies looking to set up production facilities in Cambodia, as it allows them to easily manage their finances and access foreign currency when needed.
Low Social Insurance Rate
Cambodia has relatively low social insurance rates, which can help to keep labor costs low for companies looking to set up production facilities in the country. Social insurance contributions in Cambodia are made up of three main components: pension, health and unemployment. The rate of contribution for the employer is low in Cambodia compared to other countries, it can be around 4-5% of the employee’s salary which is significantly lower than in other countries.
Trades in USD
Cambodia primarily trades in US dollars, which can be beneficial for companies looking to set up production facilities in the country. The use of the US dollar as the primary currency of trade can help to reduce currency risk and make it easier to manage financial transactions. Additionally, the use of US dollars allows companies to more easily compare costs and prices to those in other countries.
Monthly Minimum Wage: 200 USD
Cambodia has a relatively low monthly minimum wage, which is currently set at around $200 USD. This can be an attractive factor for companies looking to set up production facilities in the country, as it means that labor costs are relatively low. Low labor costs can help companies to keep their production costs low and increase their profitability. Additionally, it can also help companies to remain competitive when it comes to pricing their products.
Preferential Tariff Treatment
Cambodia offers reduced rates of customs duty on certain goods as part of its trade policies. These reduced rates may apply to goods that are deemed to be essential or those that are produced locally. Additionally, Cambodia has trade agreements with other countries that allow for reduced tariffs on certain goods imported from those countries.
Abundant Manpower
Cambodia has an abundance of manpower, with a population of over 16 million people and a relatively low median age of 25.6 years. The country’s workforce is characterized by its large number of young, educated, and relatively low-cost workers. This has made Cambodia an attractive destination for companies looking to outsource labor-intensive manufacturing and assembly operations. The garment and textile industry is the largest employer in the country, followed by the tourism and construction industries.
Quasi-National Treatment
Quasi-National Treatment (QNT) is a principle that allows foreign companies to be treated as if they were domestic companies, in certain circumstances. In the case of Cambodia, QNT is often included in bilateral investment treaties and free trade agreements that the country has signed with other nations. The purpose of QNT is to provide a level of protection and predictability for foreign investors in Cambodia, and to encourage foreign investment in the country.
Low Business Income Tax
Cambodia has a relatively low business income tax rate compared to other countries. The corporate income tax rate for most companies is currently at 20%, which is lower than the average rate in other Southeast Asian countries. Additionally, the Cambodian government has implemented a number of tax incentives to attract foreign investment, such as tax holidays, exemptions, and reduced tax rates for certain sectors and types of investment.
