When mentioning the Kingdom of Cambodia, people often associate it with ancient castles or unique architecture along with traditional festivals and folk dances. Particularly, the honesty of the local people here has earned much affection from tourists and opened up “golden opportunities” for investors.
In recent years, the Kingdom of Cambodia has been known not only for its diverse and rich cultural heritage but also as a fertile land with a strategically advantageous geographical position in the Southeast Asian region. Especially, the potential for economic development has increased with the opening of investment policies by the government. This has attracted the attention of foreign investors, including Vietnam.
Based on statistics from the Ministry of Planning and Investment of Cambodia, the number of Vietnamese businesses in Cambodia has been increasing at an average rate of 10% – 15% annually. Specifically, in 2022, 196 Vietnamese businesses were investing in Cambodia, which represented an 11% increase compared to 2021. Despite financial fluctuations and difficulties in 2023, Vietnamese investors continued to maintain growth with 219 businesses, which was a 12.5% increase compared to the previous year. Another announcement from Cambodia confirmed that Vietnam has consistently been among the top 5 countries with the largest investment presence in the Cambodian market since 2016. This indicates the strong attraction of Cambodia that significantly influences Vietnamese investors.
Photo. The landscape in Cambodia
Furthermore, based on statistics from the Ministry of Education and Training of Vietnam in 2023, it is estimated that there are approximately 3,000 Cambodian students studying at universities, colleges, and high schools in Vietnam. Meanwhile, the number of Vietnamese students studying the Khmer language has exceeded 20,000, distributed among regular schools, language centers, or private tutoring.
So, what are the reasons behind Vietnamese businesses expanding into the Cambodian market, and why do Vietnamese people choose to study the Khmer language?
Why does Cambodia attract Vietnamese investors?
According to the latest figures, as of December 2023, the Ministry of Planning and Investment has announced that the total Vietnamese investment in Cambodia reached nearly 3 billion USD, marking an increase of over 12% compared to 2022. This represents the highest investment amount to date as Vietnamese investors step into the Cambodian market. Among these investments, the focus is primarily on sectors related to manufacturing, processing, trade, services, and agriculture. Despite significant economic fluctuations and global crises in 2023, Vietnam continues to choose Cambodia as a destination for investment. This clearly demonstrates the high level of interest and confidence that Vietnamese investors place in the potential economic development opportunities in this country.
So what are the reasons for Vietnamese investors to confidently turn their attention towards Cambodia, especially when the Cambodian government acknowledges and acknowledges that the political situation in their country still has some instability? However, investors are capable of recognizing the potential opportunities in Cambodia, as evidenced by the following conditions:
1. Stable Economic Growth
According to the World Bank’s report, Cambodia’s GDP has experienced a steady growth rate of 7.5% per year from 2016 to 2023. This growth rate is significantly higher than the world’s average growth rate of 3.3% per year during the same period. Specifically, in 2016, Cambodia’s GDP reached $17.1 billion, surpassing the milestone of $35.1 billion in 2023. This indicates that Cambodia has achieved notable success in economic activities. Additionally, international organizations such as the International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD), and the World Bank all predict that Cambodia’s future economic growth will continue to be substantial.
Photo. Urban area in Cambodia.
2. Infrastructure Development
The Cambodian government is focusing on infrastructure development, including transportation, energy, and telecommunications. Specifically, Cambodia has constructed and upgraded roadways, railways, and airports. For instance, the Phnom Penh – Sihanoukville expressway spans a total length of 190km. This highway has significantly reduced travel time between the two cities from a 6-hour journey to just 2 hours, facilitating trade, transportation, and tourism. Simultaneously, the Cambodian government is actively expanding the telecommunications network, including mobile phones and internet, by allowing foreign telecommunications companies to invest in the Cambodian market. This has made connectivity more convenient and accessible, promoting e-commerce and various business activities.
Photo. Phnom Penh – Sihanoukville Expressway.
Currently, the Cambodian government is highly interested in expanding clean energy sources, including solar and wind power. A notable example is Cambodia’s contract signing with the China National Electric Power Corporation to build a 120 MW solar power plant in Kampong Cham province. The plant is expected to be operational by 2025. This support aims to reduce energy costs and protect the environment.
The Cambodian government’s investment efforts in developing modern infrastructure and utilities are geared towards creating favorable conditions for economic development and improving the quality of life.
3. Abundant and Diverse Young Workforce with Low Costs
Recently, the United Nations reported that the population of Cambodia in 2023 is 17,498,868. Among them, those under the age of 30 constitute over 6 million, with the majority residing in urban areas and major cities such as Phnom Penh, Sihanuk, Battambang, and Siem Reap. On the other hand, according to UNESCO data, the educational attainment of the Cambodian population is uneven, showing a significant disparity. The percentage of individuals with a low educational level, not completing secondary education, is 33.8%. Those with an average educational level, completing secondary and high school, account for 53.4%, while those with a higher education level, from vocational training to university and beyond, make up 12.8%, with the education level of males being twice that of females.
Illustrative Photo
Furthermore, the World Bank also indicates that the average per capita income in Cambodia in 2023 ranges from $1,550 in rural areas to $2,000 in urban areas. This income level is still relatively low compared to many countries in the Southeast Asian region. Thus, it can be seen that Cambodia’s abundant and diverse young workforce with low costs remains an area of interest for investors.
4. Policies Safeguarding Rights for Investors and Economic Profit
In addition to cultural and geographical factors, Cambodia also attracts investors through policies that safeguard their rights. Activities are facilitated through transparent investment mechanisms, allowing unlimited business sectors without discrimination between domestic and foreign investors. Moreover, investment procedures have been streamlined, reducing licensing time. Furthermore, Cambodia has incentives for investors, including tax exemptions or reductions, favorable land lease rates, and support for workforce training. Specifically, for new investors, corporate income tax is completely exempted for the first 3 years and reduced by 50% for the following 4 years. Additionally, investors receive land lease discounts for projects of significant scale or those utilizing advanced technology, with lease durations extending up to 99 years. Furthermore, there are various legal protection policies such as intellectual property rights, dispute resolution for investments, and support for trade facilitation to safeguard the interests of foreign investors
Illustrative Photo
However, Cambodia often prioritizes Vietnamese businesses due to the historically good relations between the two countries. Mr. Hun Many, the Minister of Cambodian Ministry of Interior, has emphasized, “Cambodia considers Vietnam as a crucial economic partner and always provides favorable conditions for Vietnamese investors in Cambodia”. Therefore, more than 80% of business and investment activities here involve Vietnamese individuals or entities. Nevertheless, economic profit remains the most crucial aspect for investors. Due to shortages and scarcity in Cambodia’s production and processing capabilities, imported goods and most products differ significantly from those of neighboring countries. Additionally, the improved living standards contribute to an increased purchasing power among the population. All these conditions collectively contribute to economic benefits for investors.
Why do Vietnamese people choose to learn Khmer?
Today, Khmer is no longer unfamiliar to the Vietnamese, and it has even become familiar due to our numerous opportunities for exposure and frequent information about the country of Cambodia. The simplicity of the Cambodian people, in particular, adds a unique charm that leaves a positive impression on the Vietnamese. Moreover, the similarities and closeness in terms of natural environment, culture, and religion between the two countries are also factors. This is why some Vietnamese individuals are interested in learning the language to explore the rich land of Cambodia
Famous images known to many tourists
On the other hand, according to the data from the Ministry of Labor, Invalids and Social Affairs of Vietnam, in 2023, there were approximately 1.5 million Vietnamese people working in Cambodia. Additionally, the number of individuals learning Khmer in Vietnam has significantly increased in recent years. Explaining this trend, Dr. Nguyen Thi Hue from Tra Vinh University stated, “The career opportunities after graduation are quite extensive because many students have stable salaries and high incomes. This is the most concerning issue for many learners”. One of the outcomes contributing to this value is the favorable conditions that attract investors and businesses, making Cambodia an attractive destination for expanding trade and cultural exchange globally. Consequently, this has contributed to the increasing development of the Khmer language.
Teacher Robert, an experienced Khmer language instructor with over 20 years in the translation industry, shared, “The majority of students who opt for private tutoring at PLG are mostly professionals, businesses, and high-level investors. Therefore, to tap into and support the entrepreneurial community in teaching Khmer, participating instructors must have in-depth knowledge, diverse expertise, and a good understanding of economic and socio-cultural aspects to meet the standards set by the students”.
Photo. Teacher Robert, Khmer language instructor at PLG
Ms. Thu Cuc, a learner at PLG and owner of a construction investment business in Cambodia, commented, “Khmer can be considered a challenging language due to its complex writing system and difficulty in memorization. However, through practical teaching methods, the instructor helped me quickly communicate with native speakers within just a few months”.
PLG, established in 2009 and known as a Multilingual Training Center, is considered a convergence of experts, enabling thousands of businesses to access some of the rarest languages in the world.
If you are interested in the Khmer Tutoring service at PLG, please click here and fill in the required information or send an email to daotaongonngu@plg.com.vn to receive a quote promptly.