CAC News

The Cambodian government is offering one of the region’s most generous incentive packages to attract both local and foreign investment into the agricultural sector, according to senior officials at the Council for the Development of Cambodia (CDC).

Suon Sophal, Deputy Secretary-General of the Cambodian Investment Committee (CIC), stated that the incentives originate from the country’s new Investment Law, enacted in 2021, which he described as “open, broad, and highly competitive” compared to frameworks in other countries.

Under the law, investors in agriculture, agro-processing, and agri-food production qualify for profit tax exemptions of up to nine years. Once that period ends, companies continue receiving partial tax relief for an additional six years—paying 25% of the standard profit tax for the first two years, 50% for the next two, and 75% for the final two—before returning to the full 20% rate. In total, agricultural investors can enjoy up to 15 years of tax incentives.

The government is also waiving taxes on the import of agricultural machinery, equipment, fertilizers, seeds, and other essential inputs for production. Purchases of agricultural goods directly from farmers are exempt from both withholding tax and value-added tax, a move intended to strengthen links between processors and producers.

In a further effort to promote productivity, companies investing in efficiency improvements or worker welfare in agro-industrial operations can deduct 150% of those expenses from taxable income. Sophal said this measure is designed to encourage modernization and higher labor standards across the sector.

Beyond fiscal incentives, the CDC has pledged continued support services for investors, including assistance with administrative procedures and long-term project facilitation.

One of the most significant upcoming developments is in the cashew industry. The government plans to establish a Cashew Agro-Industrial Park (CIP) in Kampong Thom province, covering 400 hectares. The park will offer land leasing opportunities for cashew processing plants and by-product facilities, along with enhanced infrastructure and access to upgraded Qualified Investment Project (QIP+) status.

President of CAC, Silot hopes the comprehensive package will accelerate Cambodia’s shift from raw commodity exports toward higher-value agricultural processing, positioning the country as a competitive player in regional and global agri-food markets.