Gov’t takes serious action to resolve stagnant projects in Sihanoukville

• Sommana Yan
• 7 April 2023
• Local News
• 4989 Views

The Cambodian government has unveiled a comprehensive package of measures aimed at restoring investor confidence and stimulating market demand for resolving stagnant investment projects in Sihanoukville.

In a letter No. 356 from the Office of the Council of Ministers dated 29 March 2023, the government outlined a specific action plan and defined the scope of the term “frozen investment project” to include construction projects that have been suspended, delayed or stopped, or have had no investment or business activities in Sihanoukville since 2016.

According to the letter, the government has set out general measures for resolving stagnant investment projects, which include identifying study and analysis areas, establishing outreach and promotion programs, supporting budget feasibility, and promoting mechanisms for resolving stagnant investment projects.

The government is also providing fiscal and non-fiscal incentives for four types of projects: (1). school projects, hospital projects, duty-free shop projects, retirement housing projects, affordable housing projects, and other high economic potential projects; (2). investment activities under the Investment Law of the Kingdom of Cambodia; (3). business activities such as guesthouses and non-residential buildings that are not under the Investment Law of the Kingdom of Cambodia; and (4). fund activities of joint ventures and/or governance in accordance with applicable laws and regulations.

To qualify for the incentives, the projects must invest to complete the construction and/or renovation within two years, obtain a construction permit, and assess actual needs. They will be authorized to import construction materials, construction equipment, and production equipment by customs duty, special tax, and value-added tax at the expense of the state. Tax incentives will be granted after the building is completed and/or renovated.

The government’s package of measures is detailed in the appendix of letter No. 1438 MEF dated 23 February 2023 of the Ministry of Economy and Finance. These initiatives will help revive the stagnant projects in Sihanoukville and contribute to the growth of the real estate sector in Cambodia.

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