Cambodia Special Economic Zones

The Royal Government of Cambodia (RFC) recognises that Special
Economic Zones (SEZs) in Cambodia are an important part of the
country's economic development because they bring infrastructure,
jobs, skills, enhanced productivity and not least the prospect of
poverty reduction in rural areas.

Location of the SEZs are vitally important so that the benefits in
terms of increased employment and poverty reduction can be shared
throughout Cambodia.

It is the policy of the Royal Government to lay production foundations
in regions other than Phnom Penh in order to build economic linkages
between urban and rural areas.

Cambodia is not an urbanised society and so the SEZs will provide
employment for the country's labour force which is predominantly from
the provinces and mainly women.

Fulfilling issues of corporate social responsibility, SEZs will also
be able to provide accommodation, education and healthcare services
for the workforce, something not generally provided by stand-alone
factories.

A sub-decree on the Establishment and Management of Special Economic
Zones (to include export processing zones and free trade zones) was
adopted in December 2005.

The Royal Government has since approved a total of 21 Special Economic
Zones (SEZs) located along the border with Thailand and Vietnam (Koh
Kong, Poipet, Savet, Phnom Den), at Sihanoukville and Phnom Penh.

Of the 21, 6 have commenced operations.

Aiming to attract more investors, the SEZs offer a 'One-Stop Service'
for imports and exports, with government officials stationed on-site
providing administrative services.

Applications to establish factories within the SEZs are dealt with
on-site as well as all administrative clearances, permits,
authorisations, etc.

Businesses within the SEZs also benefit from a number of fiscal
incentives, including income tax, customs, and VAT benefits.

Cambodia's SEZs are located adjacent to new road networks and provide
state-of-the-art factory buildings, plentiful water supplies, water
treatment plants, vocational training, banking services, postal
services and telecommunications.

Because of Cambodia's high cost of electricity, SEZs located inland
have installed power plants to generate their own electricity, while
those at the border buy cheaper electricity from Thailand or Vietnam.

SEZs located at the border not only benefit from the cheaper cost of
electricity, but also attract investors from the other side of the
border.

Investors from Thailand and Vietnam operating within these SEZs are
able to manufacture in Cambodia at a lower price and export directly
to Thailand and Vietnam, or further afield within Asean and the rest
of the world.

Special Economic Zones were formally introduced in Cambodia in 2005,
and there are currently 22 approved SEZs.

1. Sihanoukville Special Economic Zone (SSEZ) Sihanoukville
2. Sihanoukville Port SEZ Sihanoukville
3. Neang Kok Koh Kong SEZ Koh Kong
4. Suoy Chheng SEZ Koh Kong
5. S. N. C. SEZ Sihanoukville
6. Stung Hav SEZ Sihanoukville
7. N. L. C. SEZ Svay Rieng
8. Manhattan (Svay Reing) SEZ Svay Rieng
9. Poipet O'Neang SEZ Banteay Meanchey
10. Doung Chhiv Phnom Den SEZ Takeo
11. Phnom Penh SEZ Phnom Penh
12. Kampot SEZ Kampot
13. Sihanoukville SEZ 1 Sihanoukville
14. Tai Seng Bavet SEZ Svay Rieng
15. Oknha Mong SEZ Koh Kong
16. Goldfame Pak Shun SEZ Kandal
17. Thary Kampong Cham SEZ Kampong Cham
18. Sihanoukville SEZ 2 Sihanoukville
19. D&M Bavet SEZ Svay Rieng
20. Kiri Sakor Koh Kong SEZ Koh Kong
21. Kampong Saom SEZ Sihanoukville
22. Pacific SEZ Svay Rieng

According to the Cambodian Government's SEZ website, businesses within
SEZs "benefit from a number of fiscal incentives, including income
tax, customs, and VAT benefits."

Cambodian SEZs are designed to offer a 'One-Stop Service' for imports
and exports, and have specially trained government officials stationed
on-site to provide administrative services.

Applications to establish businesses within SEZs are dealt with
on-site, as is company registration and investment licenses, work
permits and labour books for workers.

Investment approvals, customs inspections and import-export procedures
are also conducted onsite.

Other benefits listed on the SEZ website include tax holidays up to 9
years, 0% VAT, full import duty exemption for raw materials,
machinery, and equipment, no export tax, permanent visas for families
of investors and free repatriation of profits.