The Council of Ministers, or Cabinet, on July 9 approved the Draft Law on Investment, following a plenary session chaired by Prime Minister Hun Sen via a Zoom call.
Once enacted, the new law will replace existing legislation – the 1994 Law on Investment and 2003 amendment, according to a press release on the minutes of the session.
Optimism is high that the law will be a crucial provider of new and greater options to absorb more local and foreign investors.
"The law is aimed at increasing Cambodia's potential at attracting more domestic and foreign investors," Hun Sen said, adding that peace and stability are key priorities for investors.
"We see that investors prioritise this when deciding on Cambodia as an investment destination, regardless of the global situation on politics and trade," he added.
Comprising 12 chapters and 42 articles, the law is designed to offer more appropriate and effective investment benefits on the basis of independence, ownership and the economic situations of the investors and the nation, according to the press release.
It will also strengthen complementary capabilities, in particular to take into consideration incentives for priority areas, technological innovation and technical assistance, job creation, skills training, research and development, and small- and medium-sized enterprises.
According to government spokesman Phay Siphan, the draft law on investment was initiated under the Cambodian Industrial Development Policy 2015-2025.
Its objective is to establish an open, transparent, predictable legal framework that is conducive to investment and to attract and promote investment by Cambodians or foreigners in a quality, efficient and effective manner for the socio-economic development of Cambodia.
The law will raise Cambodia’s competitiveness and productivity of local industries, establish investment incentives, strengthen connectivity to regional and global supply chains, ensure economic diversification, and protect the rights and interests of investors.
It also addresses dispute settlements related to investment projects, delegation of power to municipal and provincial administrations, and reductions in registration certificate processing times and compliance obligations – such as inspections.
Cambodia Chamber of Commerce vice-president Lim Heng previously told The Post that the private sector expects the investment law to take effect soon.
The law is relatively flexible to technological developments and international trade in the digital era, and was refined amid the global economic turmoil caused by the health crisis, he said.
Heng noted that the law was drafted with input from the private sector.
The CDC signed off on 70 projects with a total capital investment of $2.428 billion in the first half of this year.
This is according to calculations by The Post based on CDC statements issued via Facebook throughout the January-June period.
The CDC approved 29 investment projects in textiles, garments, footwear and travel products with a capital investment of $194.71 million.
In 2019, investment approvals logged $9.40 billion, of which China invested $2.75 billion, followed by Hong Kong at $912.55 million and Japan at $298.84 million, according to the CDC.