There’s a lot of attention drawn to Myanmar and the growing need for the frontier market to open up. Coca-Cola, Canon, Samsung, Mastercard, and many others have rushed to profit from “Asia’s Last Frontier”.

But there’s a nearby frontier market which has even more potential and less of the hype: Cambodia.

The two countries share a similar history. A draft foreign investment law emerged in 2012, one year after Myanmar’s military junta was dissolved. The Asian Development Bank then engaged Myanmar to fund infrastructure projects.

Cambodia’s turning point was about 15 years earlier. The nation’s first democratically elected government began a transition from a planned economy to its current market based economy in 1995.

Both nations certainly qualify as a frontier market. Myanmar’s GDP per capita (PPP) is $1,740 which is the second lowest in the world outside of Africa. Cambodia’s is slightly higher at $2,576.

This is Cambodia’s strength. It has had 15 years more to develop itself and work out the kinks in its foreign investment laws. They’re now now clear and straightforward.

In Cambodia, a foreigner can safely own a business and a condo, have the right to permanent residence and have no fear about the legal climate changing by the day. The same cannot be said for Myanmar, which is “the country offering the least legal protection for foreign companies” according to Maplecroft, a British risk analysis group.


A large office building in Cambodia: the type of infrastructure that Myanmar does not yet have.

Cambodia: A Better Frontier Market Than Myanmar

Myanmar is still politically unstable. The old military junta backs the current government, which still plays a prominent role in politics. Allegations of fraud in the latest elections are widespread. The law doesn’t guarantee freedom of speech while political discussions are heavily censored.

Furthermore, smaller investors face problems investing in Myanmar. Their property market is weak, overpriced, and bureaucratic. Buying stocks isn’t really an option for foreign investors either since the Yangon Stock Exchange only has four listed companies.

Cambodia is no bastion of democracy itself, but it’s certainly an improvement over Myanmar. Freedom of speech is a right, most elections since 1993 have gone by without major allegations of fraud, and there has not been a coup since the Khmer Rouge ceased to exist in 1999. This is something even Cambodia’s far wealthier neighbor of Thailand cannot claim.

Both nations are growing at a rapid pace and have great opportunities for investors. Cambodia’s economy grew by 7.3% in 2013 and Myanmar’s grew 7.5% during the same year. But while Myanmar may be the better place to invest in a decade from now, it is still too risky to recommend over Cambodia.

Want to learn more about how to invest in Cambodia? Here’s a post explaining more.


About Reid Kirchenbauer

Reid Kirchenbauer is the Founder of InvestAsian. He’s an accomplished stock trader and property investor in Thailand, Cambodia, and many other places. He’s been featured in publications such as Forbes, Nomad Capitalist, Property Report, and Seeking Alpha. Download his free investment guide by clicking here.

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