Lochan & Co Logo
Home Services Legal Updates Career Contact
EN 中文

Legal & Tax Updates

Stay informed with the latest updates on Cambodian Tax, Investment, Labor, and Corporate Law from our expert team.

Explore Updates
Taxation

Cambodia–UAE Comprehensive Economic Partnership Agreement (CEPA): Key Points and Benefits

• Lochan & Co Insights
Cambodia–UAE Comprehensive Economic Partnership Agreement (CEPA): Key Points and Benefits

The Comprehensive Economic Partnership Agreement (CEPA) between Cambodia and the United Arab Emirates (UAE) was signed on 8 June 2023 and entered into force on 31 January 2024.

Cambodia–UAE Comprehensive Economic Partnership Agreement (CEPA): Key Points and Benefits

The Comprehensive Economic Partnership Agreement (CEPA) between Cambodia and the United Arab Emirates (UAE) was signed on 8 June 2023 and entered into force on 31 January 2024. It is Cambodia's third bilateral free trade agreement (FTA), following its agreements with China and the Republic of Korea, and its first bilateral FTA with a Middle Eastern country. The agreement is intended to strengthen economic cooperation, expand bilateral trade and investment, and enhance market access between the two countries.

Tariff & Market Access Benefits

  • The agreement aims to reduce or eliminate tariffs on approximately 92% of tariff lines traded between Cambodia and the UAE.
  • Exporters from both Cambodia and the UAE benefit from preferential tariff treatment, with many products receiving immediate duty-free access while others are subject to phased tariff reductions based on their Harmonized System (HS) classifications.
  • The CEPA is expected to improve market access for businesses in both countries, stimulate bilateral trade, attract investment, and create new opportunities for small and medium-sized enterprises (SMEs).

Trade Targets & Growth

  • The agreement aims to increase bilateral non-oil trade to approximately USD 1 billion over the medium term.
  • It builds on bilateral trade of approximately USD 407 million in 2022 and is expected to more than double non-oil trade within five years.
  • Early results have been encouraging. During the first ten months of 2024, bilateral trade increased by approximately 7% compared to the previous year, with Cambodia recording a trade surplus by exporting more goods to the UAE than it imported.

Sector-Specific Opportunities

For Cambodia (Export Opportunities)

  • Expanded export opportunities for agricultural products, grains, fruits, meat, processed foods, apparel, footwear, leather goods, and other manufactured products.
  • The agreement facilitates exports of halal-certified agricultural and processed food products, including products derived from beef and chicken, enabling Cambodian exporters to access the UAE's growing halal market.
  • Cambodia also views the UAE as a strategic gateway for expanding exports to the wider Middle East, Africa, and other Arab markets.
  • Additional opportunities are expected in sectors such as tourism, infrastructure, logistics, and food processing.

For the UAE (Export & Investment Opportunities)

  • Enhanced export opportunities in machinery, automobiles and automotive parts, petroleum products, oils and lubricants, construction materials, and industrial equipment.
  • Increased investment opportunities in logistics, infrastructure, ports, aviation, renewable energy, tourism, financial services, and other strategic sectors.
  • Cambodia provides UAE businesses with improved access to ASEAN markets and regional supply chains.

Trade Facilitation & Structural Provisions

The CEPA includes comprehensive provisions covering:

  • Trade in goods.
  • Rules of Origin, ensuring that only qualifying goods receive preferential tariff treatment.
  • Customs procedures and trade facilitation, incorporating principles of the WTO Trade Facilitation Agreement to improve customs efficiency and transparency.
  • Sanitary and Phytosanitary (SPS) measures.
  • Technical Barriers to Trade (TBT), promoting cooperation on technical regulations, standards, conformity assessment procedures, and transparency.
  • Trade in services.
  • Digital trade, including cooperation on electronic commerce, paperless trading, electronic authentication, and digital business facilitation.
  • Intellectual property rights, strengthening protection and enforcement to encourage innovation, technology transfer, and investor confidence.

Investment & Economic Cooperation

  • The agreement is expected to encourage greater bilateral investment by improving transparency, strengthening investor confidence, and promoting long-term commercial partnerships.
  • It establishes mechanisms for ongoing cooperation, implementation, consultation, and dialogue between the two governments to support effective execution of the agreement.
  • The CEPA also contributes to stronger regional and global supply chains by improving trade connectivity and facilitating cross-border business activities.

SME Support

  • The CEPA promotes the growth of SMEs by improving transparency regarding laws, regulations, investment opportunities, and business environments in both countries.
  • It encourages business matchmaking, information-sharing, market research, capacity building, digital business platforms, and cooperation between trade promotion agencies to help SMEs expand internationally.

Strategic Significance

Cambodian officials have described the CEPA as one of the country's most significant bilateral trade agreements due to its potential to diversify export markets beyond traditional trading partners. For Cambodia, the agreement supports economic diversification, expands access to Middle Eastern and African markets, and enhances foreign investment opportunities.

For the UAE, the CEPA forms part of its broader strategy to diversify its economy beyond oil by strengthening trade partnerships with high-growth economies. Cambodia is among the UAE's operational CEPA partners, alongside India, Indonesia, Israel, Türkiye, Georgia, Costa Rica, Mauritius, Serbia, and Jordan.