Cambodia Country Profile

Snapshot of the Cambodia Country Profile


Corruption tops the list of obstacles for doing business in Cambodia. According to estimates, 10% of Cambodia's annual GDP is lost to corruption, signifying pervasive and large scale corruption. Cambodia is a cash-based economy, which facilitates corruption because many business transactions are made in cash. Only 1% of working capital comes from commercial banks. The use of bank transactions to counter corruption may not eradicate corruption, but it does make it harder because of the paper/electronic trail left behind. Bribes are paid to secure efficiency of services. In Cambodia, however, there does not seem to be any correlation between the size of the bribe and the speed of the administrative procedure. The primary reason for many small companies to pay bribes is to maintain good relationships with local officials. This indicates that the gift giving tradition to honour and strengthen relationships still has an impact on business conduct in Cambodia.

Positive developments in relation to corruption and investment:

  • The revised Land Law, passed in 2001, provides the legal basis for real property security and a system for recording titles and ownership.  Although the Constitution prohibits foreigners from owning land, the new law allows them a long-term lease (15 years).
  • The National Assembly passed an Archives Law which grants public access to documents that are not harmful to national security.

Risks of corruption:

  • Examples of areas where Cambodians encounter corrupt practices in their everyday lives include obtaining medical services, competing for school grades, dealing with alleged traffic violations, pursuing fair court verdicts, and obtaining birth and marriage certificates.
  • Cambodia's business regulatory environment is both cumbersome and time-consuming. Setting up a business requires 9 procedures and can take up to 85 days, which is 40 days longer than the average of the Asia-Pacific region.
  • Companies should be aware that they have to deal with extensive red tape when obtaining licences and permits, especially construction related permits and that the demand for and supply of bribes are commonplace in this process.


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