Cambodia has, over the years, attracted a significant amount of foreign investment, especially in its real estate sector. While the country promotes foreign investment, it also has specific laws and regulations concerning foreign ownership of property. Here’s a concise overview of the legal landscape surrounding foreign ownership of property in Cambodia.
The 2010 Foreign Ownership Law
The pivotal moment for foreign investors in Cambodia’s real estate sector came in 2010 when the government amended the law to allow foreign nationals to own private units in co-owned buildings, a significant relaxation from the previous blanket ban on foreign ownership.
Key Provisions of the Law
Foreign Ownership Limitation in Buildings: Foreign nationals cannot directly own land in Cambodia, but they can own buildings. Specifically, foreigners can own upper floor units but not the ground floor of co-owned buildings. This law pertains mainly to condominiums or apartment units.
Percentage of Ownership: The law allows foreigners to own up to 70% of the units in any co-owned building (from the 1st floor up). However, this is subject to some exceptions, especially in areas deemed strategic by the government.
Geographical Restrictions: Foreigners are not permitted to own property within 30 kilometers of the country’s borders, except in special economic zones. This provision aims to safeguard border territories.
Title Types: The most secure title that a foreigner can hold is a “Strata Title” or “Condominium Title”, which refers to owning a unit in a co-owned building. This title grants ownership rights similar to what Cambodian citizens would have over their property.
Land Ownership through a Company: While foreigners can’t own land directly, they can indirectly own it by setting up a Cambodian company. This company, which can be up to 49% foreign-owned, can buy and hold land. The remaining 51% must be owned by Cambodian nationals or legal entities.
Leasehold and Long-term Leases: Another route for foreigners to acquire real estate is through long-term leases. These can be for an initial period of up to 50 years and can be renewed. Such lease agreements often come with options to build on the land, transfer lease rights, or use the property as collateral.
Safeguarding Your Investment
If you’re a foreigner interested in investing in Cambodian property, it’s crucial to:
Conduct Due Diligence: Before any property purchase, especially if investing through a local partner or company, ensure thorough checks on land titles, existing liens, or disputes.
Seek Legal Counsel: Navigating the intricacies of Cambodian property law as a foreigner can be challenging. Engage with experienced local legal counsel like law firms or experts familiar with Cambodian property laws.
Stay Updated: Property laws and regulations can evolve. Stay informed about any changes to ensure continuous compliance and protect your investment.
Cambodia offers promising opportunities for foreign real estate investors, thanks to its rapidly growing economy and increased urbanization. However, while the 2010 amendment significantly liberalized property ownership rules for foreigners, it’s crucial to understand and navigate these laws carefully. Always consider seeking professional legal advice when venturing into the Cambodian real estate market.
