The following article was sponsored by Reid Kirchenbauer of InvestAsian
Cambodia probably isn’t the first place that comes to mind when thinking about offshore investment. In fact, those who’ve never been to the Southeast Asian country are surely more likely to create a mental image of poverty and genocide than capital growth.
But the days of the Khmer Rouge have long since ended and Cambodia is now a young democracy with one of the fastest growing economies in the world. Manufacturers, banks and foreign investors of all types are just now starting to see the opportunities to be had.
For years, a growing number of influential investors – such as my friend Andrew Henderson of Nomad Capitalist, seen below – have been focusing on Cambodia as one of the best frontier markets for young investors who want to take advantage of long-term growth trends.
A New Frontier
For investors, a country’s economy can be broken down into one of three categories based on their stage of development.
Developed markets, such as the United States and Japan, are generally among the slowest growing. Population growth is often tepid (or even negative), markets are tightly regulated but easily accessible, and there are already large international companies in any industry you can think of.
In emerging markets such as China and Brazil, things are much faster paced. Manufacturing is usually a big part of the economy, foreign investment is at its peak, and local businesses are just beginning to expand globally in order to find their own opportunities abroad.
Beyond those are the frontier markets, which is what Cambodia is. These are the countries where the rapid growth and high potential for returns are just beginning – perfect for long term investors. It’s common for businesses which you may take for granted in your home country, such as convenience store chains and drive-thru restaurants, to not even exist yet which can make frontier markets an entrepreneur’s paradise.
As a result, frontier markets are less correlated with the rest of the world economy. Cambodia hasn’t had a recession in over 20 years. It skipped the Asian Financial Crisis of the 1990s, the tech-bubble of the early 2000s, and the more recent Global Financial Crisis of 2008.
While there’s no such thing as a “recession proof” country, frontier markets are as close as it gets. Most of the world is now dependent on each other. McDonalds, 7-Eleven and Walmart can be found almost anywhere and because of this, all the developed and emerging economies get sick too when the United States does. Frontier markets are an exception.
Investing in Cambodia
One of the challenges of frontier markets investment is accessibility, or rather lack thereof. You can’t just walk into any bank, set up a brokerage account and start buying shares.
While Cambodia does have actually have a stock market, there are exactly four listed companies and three of them are government institutions such as the port authority and department of water.
Instead, the best way to invest in Cambodia is through real estate. Phnom Penh, the nation’s capital, is the center of its growth. Expats are just beginning to rush here, along with the multinational firms, embassies, and forward-thinking startups which employ them, and city center properties are in strong demand.
But when it comes to quality apartments in Phnom Penh, there’s a lack of supply. The expats here often have salaries in the six-figure or high-five figure range, but the typical Cambodian accommodation isn’t much to look at.
Because of this, there’s great potential in buying, renovating, flipping and/or renting out properties. It’s common to buy an apartment for around $50,000, put around $15,000 worth of renovation into it, and then have a modern unit with a market value of close to $100,000. Rental yields commonly exceed 10% net.
It’s the operational aspect which is the hard part. Knowing a good rental agent, learning about the property market in Phnom Penh, and finding an honest contractor (which can be a difficult task in the US or Europe, let alone Cambodia) are all crucial.
The Khmer Ventures Property Fund has three apartments which achieve a 9.9% net rental yield for our investors, although capital appreciation over the long-term should raise that even higher.
Our properties are all prime city-center pieces of real estate which are strategically positioned. As Phnom Penh starts to look more like Bangkok and Ho Chi Minh City, developers of large malls and skyscrapers will need to go through us first and purchase our assets at a large premium to get the land they need.
We take transparency very seriously. Through our shareholders portal which is updated monthly, title-deeds, bank statements, and more are made available to all investors. The fund is structured as a Cambodian corporation which directly owns our properties. Our investors buy shares in the company, and are therefore the owners of the fund.
If you would like to invest in Cambodia, diversify your portfolio, and benefit from the growth of frontier markets, please use our online form to contact us.
Because…Kratom?
https://68.media.tumblr.com/10eb21b01817141fc152708ca513840b/tumblr_inline_oj63veCiqp1r5eit1_540.gif
The look on Riker’s face is classic.
I’m putting together a prospectus on a brand new Kratom manufacturing plant in Cambodia. Who’s in?
“I’m putting together a prospectus on a brand new Kratom manufacturing plant in Cambodia. Who’s in?”
I’m already there experimenting with new formulas! https://uploads.disquscdn.com/images/f4a5db021dd5d95996f1b933047d8a138a00cc6a9060d9e916c12255d1ad25fe.jpg
https://uploads.disquscdn.com/images/39ddbdc07a98e78dd9d689ec078dcbdfc6349999d95d995dccc30c419e9a3fdb.jpg
Tell Pol Pot I said “Hi”
The Dead Kennedys gave their regards to him lol
https://www.youtube.com/watch?v=Maa0K4ycASo
Invest in the Kratom mines of Cambodia!
http://i.imgur.com/Wnfc8uU.png
Our initial studies have show that 117.35% of the surface area of Cambodia is plantable with Kratom trees, and the fertility of the soil, combined with the liquidised substance of the indigenous population, will produce Kratom trees to the height of 3,759feet and yield a bi-weekly harvest of 7,998,364,912,867.1415926 metric tons of Raw Kratom!
Time to invest now!!!
Make checks payable to C.Ash and send to P.O. box 666, Wisconsin
Gold and silver are probably one of the best investments you can make now, I think.
Japanese women wear schoolgirl outfits & get tentacle raped.
Filipino women are nannies.
Thai women shoot balls out their pussies.
What’s the cambodian woman stereotype?
they love you long time
No, those are the Thai women…
how can thai women love you long time if they’re shooting balls out of their pussies?
I guess cambodian girls must all be camgirls. Literally all of them.
Vietnamese girls love you long time….The “Me love you long time” quote is from Full Metal Jacket – a movie about the Vietnam war.
so you don’t think troops were stationed in Thailand during ‘nam? time to get back to those history books my friend.
too buku
Nvm, I’ve found the answer.
They’re garment workers by day and sex slaves by night. Now I understand why the article says Cambodia is the next place to invest.
God bless capitalism!
This might be the most potentially useful Sponsored Post I’ve ever seen on ROK.
Someone has been taking their Kratom…
I invested in Hiroshima …
… after taking the Kratomic Bomb
… sorry!
I came for the Kratom comments. Thank you for not disappointing.
too soon?
“Kratomic Bomb” -why is this the first time I’m hearing this?!?!?!
GOLD!!!!
Do they have squat pots or western toilets?
Hand dug hole in the ground not good enough for ya?
Do they flush
sidewalk
No doubt Japan Inc will totally dominate this market like the rest of SE Asia. Japs receive exclusive rights to everything down there. Chrysler could sell 1 million vehicles in SE Asia just by manufacturing the Jeep Wrangler there, but they have their head so far up their ass they’d rather go bankrupt and get taken over by Fiat and sell mall crawlers to middle age white women.
A comment on the serious note.
Visited Cambodia ten years ago. At that time it was indeed a frontier – I doubt it still is today. Back then it was hardly any pretentious Western idiots (the one that Thailand is filled with.) Despite the widespread poverty in Cambodia,I found the Khmer among the most genuine, humble and noble people in the whole of South-Asia. Their hospitality should not be abused – if you disrespect any locals, they will put you in your place win no uncertain terms. (I witnessed that to happen to a stupid British tourist who though he was still in Britain.) Compared to neighboring countries Cambodia has a smaller population (not necessarily a bad thing) and relatively poor infrastructure (not soo god). Both are largely a consequence of the genocide that happened during the Pol Pot regime. (1976-1979).
I found Khmer girls more genuine, natural and kinder than women of other SE Asian nation. (many of them are truly wife material.)
AS for the article, investing in Cambodia is still a risky business. As we mentioned the infrastructure is poor. Despite most Khmer being genuine, crime is still a problem in many parts of the country. Many public officials are corrupt or simply. Your paperwork won`t get done quickly, even if you are willing to pay to speed up the process. Healthcare facilities are poor or non-existent , even private ones. (The country has the highest TB rates in South-east Asia.) Khmer people are hospitable bad they dislike foreigners who try to take over
the opportunity sin Cambodia. Remember : the first victims of the Pol Pot regime were the Vietnamese and Chinese who tried to take advantage of the lcoals poverty. (The tiny Muslim minority met the same fate.)
In other words: feel free to visit Cambodia. Humble yourself, respect the locals and you will be respected. Want to invest and settle there? Proceed with caution. You should really only invest there if you can genuinely afford to lose that money. Otherwise, invest somewhere else.
I’ve found that real estate does not have the same problems as other investments (businesses, private equity) in Cambodia. Bureaucracy is almost non-existent and titles can be transferred in as little as 3 days.
The district offices which handle the transfers now have oversight by the city (at least in Phnom Penh) and they can’t just sit around and not do what they’re supposed to do.
As far as crime goes, the murder rate is about 6 per 100,000 per year – less than many major US cities. Healthcare, while not wonderful, is also improving. Bangkok Hospital opened a branch in Phnom Penh not long ago which provides the same standards as they do in Thailand.
Foreigners can’t own real estate; maybe condos tho.
“In other words: feel free to visit Cambodia. Humble yourself, respect the locals and you will be respected. Want to invest and settle there? Proceed with caution. You should really only invest there if you can genuinely afford to lose that money. Otherwise, invest somewhere els”
Probably the best advice on Cambodia. And I would wager it is best to invest there if one lives there too. At this point in my life I simply do not see myself visiting, and asian chicks, while quite cure, simply do not ‘do it’ for me.
that was a great comment, it should be put to the top of the comments here.
Agreed. I lived there for several years. Cambodians feel no compunction against cheating any foreigner, even if they are your “friend”. Their family comes first. A white man will stand no chance against the local Chinese, who speak Khmer, the right Chinese dialect (not Mandarin or Cantonese), and English. Must bribe to get anything done.
What are the rules on foreign ownership of real estate? Is local partner required? Its former commie market.
Expect a great deal of bureaucracy…
At least when buying property, there’s very little bureaucracy. Transfers are completed in as little as 3 days and there’s no “funny business” in Phnom Penh. The districts which handle the transactions are overseen by the city – which believe it or not, is rather efficient and is clamping down on corruption.
Kratom comments are not funny anymore…
You need more kratom to boost your sense of humor.
that’s because this is more of a serious article so it doesn’t have the same kick
You have got to be joking!
Outside of the two main tourist areas is bandit country. Every male over 50 is probably a Khmer killer. Foreigners are fleeced of their life savings every day while trying to start a business. AVOID!
Aye, steering clear of this one …
HEY GUYS I FOUND A PIC OF ROOSH AND HE’S HOT AF
The kratom was not with this one. Banned for posting gay porn pics.
https://uploads.disquscdn.com/images/ccea8998458514d3c614c1be3be77e78f00412437588b67d439c6f10b54da0d7.jpg
Opening a chain of pet shops is out of the question.
http://wp.libertatea.ro/wp-content/uploads/2015/06/yulin12.jpg
Eeh, maybe a shop that makes boots, hats and belts.
I only came down to the discussion to look for Kratom comments.
This is you on Cambodian kush
http://i772.photobucket.com/albums/yy1/crimsonquill9/PWB/ArtistsMuseum/Funny-Smoking-Pictures-11-570x713_zpsiytm4nzn.jpg
been there done that
http://akamaipetsitters.com/wp-content/uploads/2014/10/Dog-yoga1.jpg
I say, taking that as a profile picture. Thank you.
Oh no, be my sincerest guest . . . thank YOU:)
Yes..visit the “Mountain of Skulls” theme park under construction…I’ll pass on Cambodia..
I don’t care where the next gold mine is. Where is the next Kratom mine.
My tomatoes grow bigger and redder and the tires on my truck last for 70,000 plus miles with Kratom.
Oddly enough, on Kratom those tires will still only last for 6 hours….which is how long it takes to drive 70,000 miles.
I was thinking about you yesterday. Come Vidalia onion season I propose a trade. I will send you some new york grub that simply isn’t available anywhere else in exchange for some sweet, sweet Vidalia onions.
Season is just around the corner. We can work something out.
You couldn’t pay me enough to go to asia…anywhere…least of all some third world shithole. I mean, I wouldn’t even stay at the 4 seasons Tokyo I sure as shit wouldn’t be caught dead in Cambodia.
Cambodia is actually quite a nice country…and they have alot of internet competition was upto 12 mobile companies all competing for customers.
Dudes! Forget Cambodia. I’ve got something hotter.
Afghanistan. That’s right. Afghanistan.
There’s great potential in buying, renovating, flipping and/or renting out properties in Kabul and dusty 1 goat towns. It’s common to buy an apartment in Tora Bora for around $50,000, put around $15,000 worth of renovation into it, and then have a modern unit with a market value of close to $100,000. Rental yields commonly exceed 10% net.
It’s like printing money! A sure thing. Gah-run-teed!
I’ve lived in SE Asia. Unless you have lived in Cambodia for years, know the culture and speak the language you are well-advised not even to think of investing in Cambodia. That goes for any SE Asian or 3rd world country.
There are just so many ways to get fucked as a no-nothing foreigner. SE Asians view White foreigners like rich dumb cows to be fleeced. There is zero rule of law. Contracts are basically unenforceable. Accounting standards are a joke. Employees steal as much as they can. Corruption is rampant and baked into the system like flour is baked into a cake.
Investment opportunity sound too good to be true? Duh, because it is.
On second thought, go ahead and invest. Cambodia needs the capital.
There should be lots of opportunities in Afghanistan on distressed properties, just fix a few bullet holes and make sure the unexploded ordinance is removed and BAM! (pun intended) double your money.
Emerging markets in SE Asia have element of corruption outside Singapore.
What aabout Cambodian women ?
Parasitism, next stop Cambodia.
Still at least having a property bubble makes idiots feel rich.