Getting Started

Cambodia is a developing market economy that grew at an average rate of over seven percent over the last two decades, driven largely by an expansion in the garment, construction, agriculture, and tourism sectors.  Due to the global coronavirus pandemic (COVID-19), Cambodia’s economy contracted by 3.1 percent in 2020, but recovered gradually in 2021, and grew by 3.0 percent.  The World Bank forecasts that the economy will recover further and grow by 4.5 percent in 2022 and 5.8 percent in 2023.  Cambodia’s GDP per capita was recorded at $1,686 in 2021.

Since Cambodia became the first least-developed country (LDC) to join the World Trade Organization (WTO) in 2004, trade has steadily increased.  The United States is Cambodia’s single largest export market and one of Cambodia’s largest overall trading partners.  In 2021, approximately 40% of Cambodia’s total exports went to the United States – primarily garments, textiles, footwear, and travel goods.  According to figures from the U.S. Census Bureau, Cambodia’s exports to the United States were valued at $8.7 billion in 2021, an increase of 33 percent year-on-year; and United States’ exports to Cambodia were valued at $414 million.

Cambodia‘s tourism is centered around the spectacular cultural attraction of Angkor Wat, a UNESCO World Heritage site.  In 2019, Cambodia welcomed 6.6 million international tourists, and its tourism sector accounted for 2 million jobs and a quarter of its GDP.  Due to the global pandemic, tourism dropped by more than 80 percent in 2020, and the impact of this decline rippled throughout Cambodia’s economy.  As the country reopens in 2022, foreign tourist arrivals to Cambodia reached 160,000 during the first quarter, an increase of 125 percent compared to the same period in 2021.

Foreign assistance has been a driving force behind Cambodia’s development.  The United States is one of Cambodia‘s largest donors, and U.S. foreign assistance programs (in health, education, governance, economic growth, and the clearance of unexploded ordinances and landmines) totaled approximately $1.7 billion from 1992 to 2021.

Foreign investment in Cambodia has been led by investors from the People’s Republic of China, Japan, the Republic of Korea, Malaysia, Thailand, Singapore, and Vietnam.  Total approved foreign direct investment (FDI) in Cambodia from 1994 to 2021 was valued at $46 billion in terms of fixed assets, and U.S. FDI amounted to approximately $1.4 billion.

The Cambodian government offers a generous package of incentives to foreign investors and imposes few restrictions on imports from abroad.  Examples of investment incentives available to foreign investors include 100 percent foreign ownership of companies, corporate tax holidays of up to eight years, 20 percent corporate tax rate after the incentive period ends, duty-free import of capital goods, and no restrictions on capital repatriation.

Trade Agreements

Cambodia has signed bilateral free trade agreements (FTAs) with the People’s Republic of China and the Republic of Korea and is also a member of the Regional Comprehensive Economic Partnership (RCEP).  As an ASEAN Member, Cambodia has ratified the ASEAN Framework Agreement on Mutual Recognition Arrangements.  Cambodia and the United States signed the U.S.-Cambodia Trade and Investment Framework Agreement (TIFA) in 2006, which facilitates and promotes greater trade and investment between the two countries and provides a forum to address bilateral trade and investment issues.  The two countries continue to meet to advance the TIFA agenda.

Market Opportunities

Cambodia offers potential investment opportunities in various sectors including tourism; education; construction; agriculture/ agribusiness; automotive; energy; and health care.  U.S. products are highly regarded in Cambodia for their good quality and reliability.  U.S. franchises are very popular in Cambodia, the majority of which are in the food and beverage, retail, and hospitality sectors.  The Cambodian government has made technology a priority sector for development.

Best Prospects

  • Tourism infrastructure and resorts
  • Education services
  • Architecture, construction, and engineering services
  • Household goods and appliances
  • Agribusiness and food processing
  • Automobiles
  • Power generation equipment
  • Fast food and beverage franchises
  • Pharmaceuticals, medical supplies, and medical equipment
  • Health care services
  • Technology services

Cambodia at a Glance

Location: Mainland Southeast Asia between Thailand to the west and north, and Vietnam to the east and southeast.  It shares a land border with Laos in the northeast.

Land Area: 181,035 sq. km. (69,900 sq. mi.); about the size of Missouri.

Climate: Tropical monsoon with a rainy season from June to October, and dry season from November to May.

Population: 16.9 million (2021, World Bank)

Languages: Khmer (official); some French still spoken in urban areas; English is the major second language.

Religion: Buddhist

Real GDP Growth Rate: 3.0 percent (2021, World Bank)

GDP Per Capita: US$1,686 (2021, World Bank)

GDP Growth by Sector: Agriculture: 1.1 percent; Industry: 7.4 percent; Services: -1.0 percent (2021 World Bank)

Main Drivers of Exports: Garments, Footwear, Travel Goods, and Rice.

Main Economic Drivers: Tourism, Agriculture, Construction, Manufacturing Exports (garments, footwear, travel goods, bicycles).

Government Type: Multi-party democracy under a constitutional monarchy.