Cambodia is emerging as a promising market for foreign investors seeking growth and diversification in Southeast Asia. With over two decades of peace and political stability, Cambodia has laid a solid foundation for economic prosperity. 

The country is projected to achieve growth rates of 6% in 2024 and 6.3% in 2025, with well-controlled inflation at under 3%. In 2024’s first 11 months, 379 projects worth around $6 billion were approved, reflecting strong investor confidence in Cambodia’s stable economy and policies.

Strategically located at the heart of Southeast Asia, Cambodia serves as a gateway to the booming Asian market and the dynamic Mekong subregion. 

As a member of ASEAN, Cambodia connects investors to over 600 million consumers and benefits from the Regional Comprehensive Economic Partnership (RCEP), providing access to 2.3 billion consumers, nearly a third of the global GDP. 

Additionally, Free Trade Agreements with China and South Korea and a Comprehensive Economic Partnership with the UAE further expand Cambodia’s market reach into the Middle East and beyond. Despite its small size, Cambodia's strategic location offers unparalleled access to diverse and growing markets.

To strengthen its position as a regional hub for trade and investment, the Royal Government of Cambodia introduced the Comprehensive Master Plan on the Cambodian Transit and Logistics System (2023-2033), which includes 174 projects open for investment.

Key logistics developments, such as the Phnom Penh and the Sihanoukville Logistics Complexes, will lower logistics costs and improve investor supply chain efficiency.

With major infrastructure projects like the Phnom Penh-Sihanoukville Expressway, the under-construction Phnom Penh-Vietnam Expressway, the Phnom Penh-Siem Reap-Thailand Border Expressway (currently in feasibility study), and a $1 billion expansion of the Sihanoukville deep water seaport, Cambodia is enhancing its connectivity, enabling the country to handle large vessels and accelerate regional trade.

Prime Minister Hun Manet personally inspected the progress of the Techo International Airport in March. STPM

New airports like the Siem Reap-Angkor International Airport and the Techo International Airport set to open by 2025, along with the groundbreaking of the Funan Techo Canal – designed to shift transport to inland waterways, further position Cambodia as a competitive and cost-efficient destination for investment.

One of Cambodia’s most compelling advantages is its youthful and dynamic workforce. Approximately two-thirds of the population is under the age of 35, providing businesses with a vibrant talent pool. To further enhance skills, the government has launched a Technical and Vocational Education and Training (TVET) programme, aiming to train 1.5 million youths. This initiative ensures businesses have access to a high-skilled, industry-ready workforce capable of driving innovation and accelerating growth.

In addition to human capital, Cambodia’s rich natural resources, including rice, cassava, rubber, and its position as the world’s second-largest producer of raw cashew nuts, make it an attractive destination for agro-processing investments.

As one of Asia’s most open and liberalised economies, Cambodia offers foreign investors the opportunity to fully own 100% of shares in nearly all sectors (except land), with no restrictions on profit or capital repatriation.

The country’s investor-friendly policies and flexible incentive programs, particularly in technology and manufacturing, provide a competitive edge. With over 30 bilateral investment treaties and Double Taxation Agreements (DTAs), Cambodia offers tax relief and strong protection for investors, further enhancing its attractiveness as a global investment destination.

The government prioritises the private sector, actively engaging with investors through technical working groups, public-private sector forums and special task forces designed to address investors’ concerns.

New initiatives such as the Special Program to Promote Investment in Preah Sihanouk Province 2024 and upcoming projects in the northeastern regions offer untapped investment opportunities in some of the country’s potential regions. 

Furthermore, to promote transparency and digital transformation, Cambodia is simplifying business registration, tax filing, and compliance through online services. With the Digital Economy and Society Policy Framework (2021-2035), the government is committed to building a fully digital society, enhancing its appeal as a business-friendly destination.

Cambodia is leading the way in clean energy, with 62% of its national grid powered by renewables, making it the second-largest clean energy producer in ASEAN. 

The government's commitment to sustainability is further evidenced by the approval of $5.79 billion for 23 renewable energy projects from 2024 to 2029, positioning Cambodia as a prime destination for eco-conscious investors.

Additionally, 26 Special Economic Zones (SEZs) host 745 projects, including global brands like Coca-Cola and Toyota, offering attractive opportunities in manufacturing and sustainable investment. With plans for Green and High-Tech SEZs, Cambodia is set to attract innovative, tech-driven investors.

Looking ahead, Cambodia’s economic landscape is primed for sustained growth and investment. The government’s focus on infrastructure, education, and industrial diversification, combined with its youthful workforce, rich natural resources and strategic location, will continue to create exciting opportunities for foreign investors. As Cambodia strengthens its position as a bridging state in dynamic trade networks in the Asia-Pacific, it offers a vibrant, forward-thinking environment for businesses seeking long-term growth and success in Southeast Asia.

Path Kosal is an advisor to the Asian Vision Institute, Cambodia.​ Ros Dalina serves as an official at the Ministry of Economy and Finance. The views expressed are their own.