T HE long-awaited investment law will permit the repatriation of money by foreign

investors and hold down their taxes, according to a draft of the legislation

obtained by Reuters on May 2.

The law provides for the unrestricted

transfer of foreign currencies abroad by both foreigners and Cambodians, the

draft says.

Finance Minister Sam Rainsy told a journalist last week that

he hoped the bill would be ready for passage by the National Assembly next

month.

"The Kingdom shall permit Cambodian and foreign nationals with

investments in Cambodia to purchase foreign currencies through the banking

system and to pay freely abroad those currencies for the discharge of

obligations incurred in connection with their investments," Article 8 of the

draft says.

Other investment guarantees concern land ownership,

nationalization, taxation rates and import duties.

Article 5 of the draft

says Cambodia will tax business profits at a rate of 20

percent.

Exemption of profit tax in whole or part may be offered to

companies that increase non-traditional exports or increase the value added to

products in Cambodia.

More than 50 percent of all real-estate holdings

would have to be in the hands of Cambodians, but foreigners would be able to

take leases of up to 30 years.

An umbrella body to be called the

Cambodian Development Council (CDC) would shoulder responsibility for

administering the investment law.

The CDC would be made up of senior

officials from three key ministries, planning, finance and public works, Rainsy

has said.

"The CDC will be presided over by our first prime minister

[Prince Norodom Ranariddh] so it is very powerful," he said.

Cambodia,

battered by more than two decades of civil war and social upheaval, has set

luring foreign investment as a priority in the country's economic

rehabilitation. Many potential investors have held off until seeing how the law

takes shape.

-Reuters