The Investment Promotion Working Group for Preah Sihanouk met on Wednesday to discuss proposals, incentives and concessions and also the streamlining of project procedures in the province, according to an official statement.
Besides solving the issue of unfinished and abandoned constructions in the coastal city since 2019, the ‘Special Investment Promotion Programme for Sihanoukville,’ initiated by Prime Minister Hun Manet in January this year, is also meant to attract investment for new projects in the coastal city.
The meeting, chaired by Hean Sahib, Secretary of State of the Ministry of Economy and Finance and Chairman of the Investment Promotion Working Group, and attended by Chiv Songhak, Secretary of State of the Ministry of Justice, was held amid calls for faster facilitation of the projects and streamlining of the incentives and procedures.
According to available information, by May end, 41 projects were qualified for incentives under the scheme. In May alone, 14 projects from foreign and local investors valued approximately at $737 million received approval from the government for the special incentives. This was in addition to the 27 projects qualified for the package earlier.
The projects include an agro-industrial park, a five-star hotel, several casinos, resorts, condominiums and office complexes. Seven of these projects were intended to revive stalled constructions while six others were new projects and one an expansion project.
In April, special incentives were granted to 14 other projects, totalling $213 million in investment. The team is also set to review special incentives for an additional 23 projects in the near future.
The success of all new investments in Sihanoukville, however, depends on the tourism turnaround of the city, said Vichet Lor, Vice-President of the Cambodia Chinese Commerce Association (CCCA).
“Sihanoukville will become a more favourable investment destination if tourist arrivals can match the pre-Covid-19 levels, generating more income for the provincial economy,” he told Khmer Times, yesterday.
“This (tourism) is the key aspect that investors have in mind before investing their capital. Pragmatic and practical solutions are needed to reinvigorate the tourist industry in Sihanoukville in a timely manner to improve returns on investment prospects,” Vichet Lor said.
He also opined that seasoned investors look at various aspects like medium-term risk analysis and returns on investment on a ten-year period before injecting funds into foreign markets.
The special incentives initiative of the government aims to boost investments in the coastal city and also resolve the crisis of unfinished constructions by attracting investments to finish them through various concessions, mediation and dispute resolution efforts.
The special incentives programme applies to three categories of projects proposed and implemented in Sihanoukville — stalled building projects, new projects that can commence in 2024 and expansion of existing projects and business activities.
At the same time, existing enterprises or projects in the coastal city can also receive incentives through simplified procedures for permits, licences and connections such as water, electricity and roads.
The move to solve the crisis created by the unfinished buildings, left mostly by Chinese investors, gathered momentum last year following criticism that they were an eyesore in the coastal city known for its tourism potential.
Since its inception, the Investment Promotion Working Group has been actively implementing measures to attract investment to the province. Its efforts include the creation of designated development zones, the drafting of a sub-decree for granting residence visas for long-term investments and the promotion of existing industrial and special economic zones.
Incentives under the Special Investment Promotion Programme include exemption from income tax and minimum tax for an additional three years, exemption from value-added tax till the completion and improvement of stagnant buildings, five-year withholding tax exemption on real estate lease, exemption of property tax and the exemption of various administrative sanctions.
The government had identified 362 unfinished buildings in Sihanoukville as of January 2024. It may be noted that since 2016, investment in Sihanoukville has grown rapidly, especially with the growth of a large number of hotels, restaurants, shops, and other facilities, mostly due to Chinese investments.
However, in the period from 2019 onwards, changes in the socio-economic situation combined with the spread of Covid-19 and other global challenges have caused the construction of many buildings to be suspended or stopped.
