Foreign investment in Cambodia

Cambodia restructured its economy after many years of protracted war and instability. The economy grew strongly following the country’s transition to a free-market economy as it opened to trade and capital flows. Growth was supported by the flow of development assistance, access to the European Union and United States’ markets and large amounts of foreign direct investment (FDI).

In the third quarter of 2020, the CDC approved 21 new investment projects decreased by 28 investment projects. However, the invested capital stood at $3.6 billion or rose 220,7% comparing to the same quarter last year with a majority of invested capital was centered on the construction of five-stars hotels, business centers and big livestock farms. Of the approved investment projects during 1994–2019, China took the largest share with approximately 21.8%. The investment projects were tied to the development of infrastructure, agro-industry products such as rubber, and tourism.3 Between 1995 and 2018, Cambodia was considered to have one of the fastest-growing economies in the world thanks to its average growth rate of 7.7%.

Net FDI almost doubled in the last decade, with its share as a percentage of GDP growing from 7.8% in 2008 to 13.1% in 2018. In 2019, FDI represented 13.5% of Cambodia’s GDP, which is considerably higher than in other countries in the region such as Thailand (1.1%) and Vietnam (6.1%). The below graph illustrates the net inflows of foreign direct investment and its percentage share on Cambodia's GDP (%) from 2000 to 2019.