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Singapore-Cambodia Investment Structures Under Scrutiny
Major new tax rules are sending shockwaves through Singapore-linked investor communities in Cambodia. The introduction of the Principal Purpose Test (PPT) in the Cambodia-Singapore Double Taxation Agreement and Singapore's new tax on foreign-sourced disposable gains starting January 2024 require investors to demonstrate economic substance in Singapore. These changes are intended to prevent treaty abuse and ensure that tax benefits are not the primary reason for setting up holding companies in Singapore. Investors must now focus on proving substantial economic ties and strategic decision-making within Singapore to comply with these new regulations.
Read more: DFDL
Diplomatic Roundup: US, Japan, Vietnam, France, Pakistan, UAE
The US is back on board to patch things up with Cambodia, as talks this week between Deputy Assistant Secretary Melissa Brown and leaders showed. Discussions focused on enhancing cooperation across various sectors, including trade, investment, and people-to-people exchanges. The US has resumed $18 million in assistance through USAID, and both nations expressed optimism about deepening collaboration.
Celebrating 70 years of friendship with Japan, both nations have pledged to deepen their cooperation through the establishment of a Comprehensive Strategic Partnership.
Cambodia and Vietnam are strengthening trade and industry collaboration to increase bilateral trade turnover.
Talks with France have begun on a Double Taxation Agreement.
Cambodia and Pakistan are exploring their relationship, with Pakistan anticipating the establishment of a full-fledged Cambodian Embassy in Islamabad to facilitate trade and other cooperative mechanisms.
The Council for Development of Cambodia and the Cambodia Chamber of Commerce have announced a forum to bring together investors from Cambodia and the UAE in the first quarter of 2024.
Read more: Khmer Times (United States), Phnom Penh Post (Japan Relations), Khmer Times (Japan Partnership), EIN News (Vietnam Trade), Cambodianess (Vietnam Cooperation), Phnom Penh Post (France DTA), Khmer Times (Pakistan), Phnom Penn Post (UAE)
Green Energy Leap: 70% Renewable Power by 2030
Cambodia is on track to reform its energy landscape, intending to make nearly three quarters of its energy supply renewable by 2030. This ambitious goal, as outlined by Minister of Mines and Energy Keo Rattanak, focuses on harnessing solar, wind, hydro, and biomass energy. This project not only aligns with environmental objectives but is also expected to boost economic growth. The country has already surpassed ASEAN's 35% clean energy target, reaching over 60% in 2022. Strategies include enhancing battery storage, expanding the grid, and implementing smart grid technologies. Cambodia's vision extends beyond self-sufficiency, exploring the potential to export clean energy to neighbors like Singapore. This initiative marks a significant increase in electricity access, from 34% in 2010 to 98% in 2022, while addressing challenges of energy security and reducing reliance on imported power.
Read more: The Star
Thailand and Cambodia Eye Joint Energy Security
Thailand’s House Committee on Foreign Affairs is urging the Thai government to expedite discussions with Cambodia over shared maritime claims. This push, led by Chairman Noppadon Patama, includes a proposal for a new technical panel to facilitate these talks. The recent thaw in relations between Thai PM Srettha Thavisin and Cambodian leader Dr. Hun Manet is seen as a promising sign for resolving longstanding maritime disputes. The committee envisions that successful negotiations could lead to joint development of the disputed 26,000 square kilometer area in the Gulf of Thailand, known for its rich oil and natural gas reserves. This collaborative approach, inspired by a previous memorandum of understanding, will go a long way in ensuring energy security for both countries through shared resource utilization.
Read more: Khmer Times
Can Reforms Save Cambodia's Growth Fairytale by 2030?
With hopes to become an upper middle-income country by 2030, the nation faces a slowing economy, with growth projected at 5.4% in 2023. This downturn, influenced by global factors, reveals structural challenges within the country. Growth, previously driven largely by investment, particularly in construction, has seen a decline. The government's 2023–28 Pentagonal Strategy outlines reforms focusing on improving the business environment, upgrading infrastructure and logistics, improving education, and addressing climate change impacts.
Read more: World Bank
E-Arrival Card to End Airport Arrival Headaches
Cambodia hopes a new e-Arrival Card to launch January 1, 2024 will smooth out hassles for visitors landing at its airports next year. This digital card will replace multiple paper forms, facilitating immigration and health formalities at international airports. During the trial period until June 30, travelers can choose between electronic and paper forms. However, from July 1, 2024, the e-Arrival Card is expected to become mandatory.
Read more: Travel Trade Journal
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