CAMBODIA is an emerging economy, with a lot of incentives for foreign investors.
Foreign direct investment (FDI) in Cambodia have grown rapidly over the past few years, supported by strong investment activities in finance, real estate and other services, including retail.
Despite the ongoing pandemic and economic uncertainties, Malaysian company G Capital Bhd (GCAP) has inked an agreement on Dec 8 with Cambodia’s E S Packaging Co Ltd to collaborate with each other principally to focus on monetary intermediations and a commercial banking business in Cambodia.
The central bank of Cambodia, National Bank of Cambodia has given the approval-in-principle for the establishment of a commercial bank under the name Oriental Bank Plc. This comes with an approved capital of US$100 mil (about RM407 mil).
“It is not very often we see private institutions investing into a new bank nowadays, all the more so when it’s in Cambodia,” said GCAP executive director Tan Sri Ali Hamsa.
“However, after months of careful deliberation, our Group has come to a conclusion that this is one historic investment opportunity that we cannot afford to miss.”
This approval-in-principle allows GCAP to jointly establish and operate an associate company offering banking products and services to the nation of 17 million people.
With its well-established banking partners, GCAP believes this can contribute to the development of the Cambodian domestic banking market, as well as to facilitate more trade and investment flows between Cambodia and Malaysia and other ASEAN markets
The main competitive edge of Oriental Bank Plc – which will be headquartered in Phnom Penh – is that the bank will adopt a hybrid business model, which will be focusing on digital banking and online banking, without neglecting conventional banking.
The entry of more foreign banks led to a rise in FDI in banking and finance.
According to Asean Investment Report 2018, the FDI flows to Cambodia had more than tripled to US$2.7 billion in 2017 from US$783 mil in 2010.
Additionally, to the country’s sound macroeconomic policies, political stability and regional economic growth, Cambodia is an unique economy with over 75% of the currencies in circulation are US dollars.
Furthermore, the Cambodian government is investor-friendly as it offers companies with a corporate tax rate of maximum 20%, which are as competitive as other Asean countries, if not better. – Dec 9, 2020
