Other BriefingsOpportunities for Foreign Investors in Cambodia’s Construction Industry
Cambodia’s economy has demonstrated resilience in the wake of global economic uncertainties, with a GDP growth rate of 5.4 percent in 2024, up from 5.24 percent in 2023. This steady recovery, following the disruptions of the COVID-19 pandemic, underscores the country’s growing economic momentum.
The construction sector is a cornerstone of Cambodia’s economic landscape, significantly contributing to GDP. In 2023, the industry’s GDP contribution stood at KHR 6.11 trillion (US$1.5 billion), reflecting a slight decrease from KHR 6.2 trillion (US$1.54 billion) in 2022. Despite this fluctuation, the sector remains a vital driver of infrastructure expansion and urbanization, fostering a wealth of opportunities for foreign investors.
Cambodia’s construction boom and key growth trends
The country is witnessing a rapid urbanization surge, with 25.57 percent of the population living in urban areas as of 2023, a figure projected to reach 30.6 percent by 2030. The rising demand for residential, commercial, and industrial developments is fueling the expansion of Cambodia’s construction industry, with total construction spending in 2023 reaching US$9.3 billion.
Phnom Penh is undergoing major transformations with large-scale urban development projects. The Mekong Quay is a 210-hectare mixed-use development that will reshape Arey Ksat into a modern urban hub, integrating residential, commercial, and tourism infrastructure.
The Koh Norea Development, valued at US$2.5 billion, is set to create a thriving satellite city with healthcare facilities, educational institutions, and commercial spaces.
In Sihanoukville, the special economic zone (SSEZ) continues to attract foreign investment, strengthening Cambodia’s position as a regional manufacturing hub. Siem Reap, famous for its historical heritage, is evolving into a sustainable urban center with the Smart City Initiative, which aims to modernize infrastructure while preserving cultural heritage.
Large-scale infrastructure projects
Cambodia’s infrastructure is undergoing a significant transformation. The Techo International Airport, located in Kandal Province, is poised to become the country’s primary aviation hub, capable of handling up to 50 million passengers annually.
Connectivity improvements are also underway with the Koh Norea Bridges, enhancing transportation access to Phnom Penh’s expanding urban districts. In the maritime sector, the Kampot Deep-Sea Port is being developed to boost Cambodia’s trade and tourism industries, ensuring greater connectivity to international markets.
Regulatory framework and foreign investment laws
Foreign investors are subject to specific regulations when entering Cambodia’s construction industry.
Land ownership and legal considerations
Foreigners are not permitted to own land in Cambodia but can purchase units in co-owned buildings, provided they do not own the ground floor. They can also secure long-term leases of up to 50 years, with the option for renewal. Another investment avenue is through Cambodian companies, where foreign ownership is capped at 49 percent, with the remaining 51 percent required to be held by Cambodian nationals.
Construction permit requirements and processing time
The Ministry of Land Management, Urban Planning, and Construction (MLMUPC) oversees permit approvals, with processing times varying based on the project size. Large-scale developments require approval from MLMUPC, which takes approximately 45 working days, while smaller projects may be approved at the City Hall (25 working days) or District/Khan level (15 working days). Investors must submit detailed project plans, environmental impact assessments, and proof of land ownership to secure approvals.
Investment opportunities in key construction sectors
Cambodia’s real estate market is projected to reach US$619.55 billion by 2025, with residential real estate leading the segment at US$574.10 billion. The market is expected to grow at a CAGR of 2.85 percent (2025-2029), reaching US$693.35 billion by 2029.
Residential real estate continues to dominate Cambodia’s construction landscape, driven by increasing urbanization and rising demand for modern housing solutions. Cities like Phnom Penh and Siem Reap are seeing a surge in luxury condominiums and mixed-use developments, catering to both local buyers and foreign investors.
The commercial sector is also expanding, with high demand for office buildings, retail centers, and hospitality investments, particularly in Phnom Penh’s business districts. Additionally, the growth of SEZs is fueling industrial construction, with new factories, warehouses, and logistics hubs supporting Cambodia’s manufacturing sector.
Government incentives and support for foreign investors
Cambodia offers a range of incentives to attract foreign capital into construction projects. Qualified Investment Projects (QIPs) benefit from income tax exemptions of up to 9 years, along with customs duty exemptions for imported construction materials and special depreciation rates for capital expenditures. The government also encourages Public-Private Partnerships (PPPs), allowing investors to collaborate on large-scale infrastructure and urban development projects.
Market entry strategies for foreign investors
Foreign investors can enter Cambodia’s construction sector through various pathways. Joint ventures with local developers remain a common strategy, enabling foreign firms to navigate land ownership restrictions while leveraging local market expertise. Some investors opt for wholly foreign-owned enterprises (WFOEs), which are possible under specific investment schemes. Mergers and acquisitions offer another entry route, allowing foreign firms to acquire existing companies and bypass certain regulatory hurdles. For those seeking flexibility, project-based partnerships provide short-term collaboration opportunities for specific developments.
Financing and investment trends
Cambodia offers multiple financing options, including local bank loans, which are available for real estate and infrastructure projects. The Asian Development Bank (ADB) and World Bank actively fund major infrastructure developments, while private equity and venture capital firms are increasingly investing in Cambodia’s booming real estate market.
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