Export Britain

Cambodia

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Ease of trading across borders

Importing a standard container of goods into Cambodia requires:

Introduction

Cambodia is a country in Southeast Asia that borders the Gulf of Thailand. Neighbouring countries include Laos, Thailand, and Vietnam. The government system is a multiparty democracy under a constitutional monarchy; the chief of state is the King and the head of government is the Prime Minister. Cambodia has a mixed economic system, self-defined as a planned economy with markets, in which the economy includes a variety of private freedom, combined with centralised economic planning and government regulation. Cambodia is a member of the Association of Southeast Asian Nations (ASEAN).

Economic snapshot (% annual growth rate)

	2016	2017	2018-21
GDP	7.0	6.9	6.6
Export of goods and services	10.5	10.5	9.7
Import of goods and services	10.2	11.2	8.2
Inflation	3.0	3.2	3.0
Current account balance (% of GDP)	-8.7	-8.5	-8.4
Population (millions)	15.8	16.0	16.6
Source: Source: IMF, World Economic Outlook Database, April 2017

Economic outlook

Over the last decade, Cambodia’s gross domestic product grew at an average rate of 8.2%. In 2013, the economy grew by over 7.2%, and it is expected to continue to grow at a similar rate over the next two years. Economic activity remains strong driven by robust exports, tourism and construction despite recent floods and some slowdown during the election in July last year. Cambodia, however, remains one of the poorest countries in Asia. The country is heavily reliant on foreign aid, with donor support equivalent to over half of the government’s budget. 

Trade outlook

Cambodia’s largest export partners include China, Thailand, Hong Kong, Vietnam and Singapore. Cambodia will begin drawing foreign investment largely from China and neighbouring Vietnam as it begins to move away from its dependence on foreign aid and begin investment in the country’s infrastructure. Exports from Asia will continue to increase in the medium term. Cambodia will continue to largely export to US, Hong Kong, Canada, Vietnam and the UK. 

Cultural tips

• Deference to hierarchy is important and respect must be shown to senior figures
• Translate business materials into Khmer where possible
• Cambodia is a collectivist society where the group, family, or company are placed ahead of the individual

Essential Customs Tips

De-minimis value (duty free allowance): There is no minimum threshold for imports into Cambodia; therefore duty and taxes are payable regardless of the value. Commercial shipments of medical samples, prescription and non-prescription drugs, and cosmetics will require an import licence from the Ministry of Health. The application process can take up to 7 working days and the permit will also need to be processed by customs. Electronic cigarettes and alcoholic spirits are a prohibited from import into Cambodia.

SWOT analysis

Strengths Rapid economic growth Dynamic workforce with among the lowest labour costs in Asia Moving away from dependence on foreign aid to foreign investment for infrastructure	Weaknesses Poor infrastructure.
Opportunities Among Asia’s lowest labour cost and a dynamic workforce	Threats Corruption Under-developed human resources

Opportunities for UK businesses

Cambodia offers potential investment opportunities in agribusiness and food processing, tourism infrastructure, education, architecture and engineering services, power generation equipment, pharmaceuticals, and medical supplies.

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