Evaluating Cambodia's SEZ Laws

Phnom Penh (credits)

In December 2005, Cambodia issued Sub-Decree No. 147 and 148, which established special economic zones (SEZs), as well as the Cambodian SEZ Board (CSEZB) to regulate the SEZs. The SEZs include both general industrial zones and export processing zones and have free trade areas, service areas, residential areas, and tourist areas.

During the laws' formation, Locus Founder & CEO Jean-Paul Gauthier analyzed the legislation against international best practices for SEZs. His work was done while working for the World Bank - IFC Foreign Investment Advisory Service (FIAS).

Following Mr. Gauthier’s 2005 review of Cambodia’s draft legal framework for SEZs, Cambodia adopted the 2005 Sub-decree No.148 on the Establishment and Management of Special Economic Zones. Cambodia’s first SEZ (Neang Kok Koh Kong SEZ) was established in 2005, another SEZ was established in 2006, and 2 more in 2008. Since 2008, at least 9 SEZs have begun operations in the country, with 20 more approved for development. Manhattan SEZ in Bavet is the largest zone, with total employment of 28,000, while 2 other SEZs in Bavet employ a further 8,000. Phnom Penh SEZ employs 17,000 workers. Sihanoukville SEZ (SSEZ), a partnership with China founded in 2008, hosts more than 160 factories, employing more than 20,000 workers and exporting $372 million worth of goods annually. SSEZ plans to open 140 more factories by 2020, creating up to 100,000 jobs. As of 2014, Neang Kok Koh Kong SEZ hosted 4 firms and nearly 4,000 employees. The zones in the Thai border areas of Koh Kong and Poi Pet employ just under 5,000. As of 2018, there were 347 projects with a total investment of $2.73 billion in the kingdom's SEZs, which have generated more than 104,000 jobs and resulted in $1.54 billion in annual exports (14% of the national totals).