For a long time, the city of Sihanoukville, which is by the coast, has had a problem with many buildings. New construction projects were started but never finished. These incomplete constructions have been an ugly sight, ruining the city’s skyline. But now, there’s some good news that could finally fix this issue.
The Cambodian government has announced a new plan. It is called the “Special Investment Promotion Program in Sihanoukville 2024.” Prime Minister Hun Manet and Deputy Prime Minister Dr. Aun Porn Moniroth shared the details of this program.
Our expert real estate agents at IPS Cambodia have summarised all the details for all property investors and enthusiasts.
The investment program aims to complete the roughly 362 unfinished buildings dotting the city. Experts estimate that finishing these unfinished buildings will cost USD 1.161 billion. That’s a lot of money. However, the government has found ways to attract businesses and investors. This program will introduce their money into Sihanoukville’s real estate projects.
Earlier versions of the plan aimed for different goals. The final program for 2024 is to overcome the challenges that led to the halt of many constructions. In this plan, authorities are attractive deals to smooth the investment process.
With this new push, the people of Sihanoukville hope the incomplete buildings will finally become fully-fledged structures contributing to the city’s growth. It’s been a long struggle. But this ambitious plan marks a new start for Sihanoukville’s real estate dreams.
Investment in Preah Sihanouk Province 2024
The investment program is for Sihanoukville’s unfinished buildings. It is part of a bigger government plan called “Invest in Preah Sihanouk Province 2024.” This initiative has four main goals:
- Turning Sihanoukville into an economic powerhouse driven by industries, tourism, and investment.
- Solving practical problems to get quick results.
- Supporting and aligning with the government’s strategies for different sectors.
- Speeding up Sihanoukville’s transformation into a competitive, high-value, and productive industrial hub.
About Investment Promotion Working Group – Preah Sihanouk Province
To make this happen, the government has formed a special task force. It is the Investment Promotion Working Group for Sihanoukville. It is led by Hean Sahip from the Ministry of Economy and Finance. The team will coordinate and implement the investment plan.
It acts as a one-stop shop for investors. They’ll review proposals, issue permits, and handle all the paperwork. The aim is to make it easier for businesses to invest in Sihanoukville.
The task force has seven key responsibilities:
- Leading and coordinating the investment program.
- Bringing together different ministries and organizations.
- Having a dedicated team and funding managed by the Ministry of Economy and Finance.
- Promoting and explaining the “Invest in Sihanoukville 2024” plan to the public.
- Training programs to ensure transparency, accountability, and efficiency.
- Monitoring and evaluating the program’s progress.
- Providing quarterly updates and a full report by the end of 2024.
With this task force in charge, the government is serious about Sihanoukville’s real estate troubles. They focus on making the city an attractive investment destination.
Details about the New 3-Year Visa
The government has also announced an exciting visa option for renters or buyers. If you plan to invest at least $100,000 in real estate in the city, you could be eligible for a special 3-year visa!
This long-term visa is for investors who want to make Sihanoukville their home. So, it’s ideal for you whether they’re purchasing a property or renting one. It’s a fresh incentive to attract more investment into the city’s real estate market.
The Prime Minister has promised a separate decree outlining all the requirements and procedures. Moreover, finer details for this are yet to be announced. For instance, we’ll need to know how and by whom the $100,000 property value will be assessed.
The new visa does seem to overlap with some existing programs. These programs include the Cambodia My 2nd Home (CM2H) scheme launched in 2022. It also excludes options for obtaining Cambodian citizenship through investment. Authorities will likely clarify how this 3-year visa differs from those initiatives.
Sihanoukville is rolling out the red carpet for investors willing to commit to the city’s real estate revival. The long-term visa gives the government confidence in investments.
Purpose of the Special Investment Program in Sihanoukville
With this new program, the government has combined previously announced three plans. They are categorised on their nature and potential.
- Stalled Construction Projects: Investment proposals to restart and complete unfinished buildings in Sihanoukville. It will focus on projects that have been stuck for long.
- Brand New Ventures: Fresh investment projects or business activities unrelated to existing construction. It will focus on plans that are ready to kick off immediately in 2024.
- Expansion Projects: Current investors looking to scale up their operations in Sihanoukville. However, for this, they must meet the eligibility criteria.
The program aims to simplify the process by focusing on these three core areas. It will build investor confidence through a step-by-step revival strategy. The incentives and measures will remain in place until 2026. This will give businesses enough time to take advantage.
But investment alone isn’t enough. Prime Minister Hun Manet stressed the importance of a positive image for the region. They have urged local authorities to stamp out illegal activities. This will ensure a peaceful, secure environment for businesses and residents.
With a clear plan and the right conditions, Sihanoukville is gearing up to become an investor’s paradise. The government’s commitment to reviving this coastal gem is beneficial. The opportunities are ripe for those willing to bet on its future.
Financial Incentives and Tax Breaks to Restart the Halt Projects
The government is providing tax exemptions and financial rewards to attract investment in Sihanoukville for unfinished project completion. These include –
- 3 extra years of income tax exemption, including from minimum tax.
- 0% value-added tax (VAT) on completing and renovating unfinished buildings.
- 5-year exemption from withholding tax on real estate leases.
- Property tax and administrative fee waivers.
- No charges for public services/fees exceeding construction permit rates.
- Discounts on inspection costs and construction certifications.
Non-Financial Incentives
Adding to this, the support is not only on money-related matters. The authorities are also offering non-financial incentives to smooth the investment process:
- Streamlined permit applications for construction work.
- Facilitated licensing, certification, and registration procedures.
- Investor-matching services and real estate price referencing in Sihanoukville.
- Promoting out-of-court dispute resolution for investment conflicts.
With reduced taxes, fee waivers, and bureaucratic complexities removed, investors have a clear runway to profitability as they restore Sihanoukville’s half-built properties.
Business Expansion Opportunities Under the 2024 Plan
Sihanoukville isn’t focused on restarting abandoned construction sites. The government is welcoming all kinds of new investments. They are also appreciating business expansions in the coastal province. Entrepreneurs eager to invest funds into this region await a list of incentives.
- Investors can look for an easy process for securing licenses, certificates, and permits. Additionally, special incentives are available. These include tax breaks on imports, patents, and billboards. Real estate rental withholding and registration fees are also included.
- Qualifying investment projects and registered SMEs can enjoy a 3-year exemption. It can be from income tax, minimum tax, and other income-based levies. SMEs also have the option to apply for a 0% value-added tax (VAT) rate when purchasing locally produced inputs.
- Existing businesses looking to expand will find the offer enticing. Income tax exemptions of up to three years are available. It is based on the capital expansion ratio and a 150% allowance on projected earnings.
Sihanoukville is courting proposals to transform the land. These can be used as industrial zones, enterprise clusters, or tourism hotspots. Pilot areas, including Special Economic Zones to Free Trade Zones and Customs Bonded Warehouses, are also planned.
Final Note
Sihanoukville is all set to become a hotspot of economic activity with various discussed incentives. The government’s commitment to supporting and boosting businesses benefits investors.
However, it is essential to note that this program is a living document. It is subject to change and revisions. Investors need to keep updated on potential changes that can impact their plans.
Sihanoukville’s future is exploding with opportunities. Authorities are leaving no stone unturned to make Sihanoukville an investment destination. If you’re also planning to reap the benefits of this investment program, IPS Cambodia can assist you.
IPS Cambodia is a real-estate agency in Cambodia. We have a range of listings for purchase and rental properties, whether you’re searching in Sihanoukville, Phnom Penh, or other areas of Cambodia. We aim to provide the best property options according to investors’ choice and budget.
Connect with our expert real estate agents now to know more!
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