How Can Foreigners Buy Land in Cambodia?

• 28 April 2021
• Property Focus
• 13683 Views

The 1993 Cambodian Constitution states that only persons or legal entities of Khmer nationality have the right to own land. However, this law does not prohibit foreigners from investing in land in Cambodia. So, how can foreigners buy land in Cambodia?

1) Through Khmer National Nominee

This method allows a foreigner to buy land by having a Cambodian representative hold the title for them. This means the land title deed is in the representative’s name. Thus, to secure the right of the foreigner over the property, both parties must have a contract which can be in form of a mortgage or hypothec agreement, loan agreement, or long-term lease agreement, among others.

For example, through a mortgage or hypothec agreement, it acts as though the Khmer representative bought that land using a loan from the foreigner. Thus, the land title deed has to go through a mortgage or hypothec procedure at the cadastral office. The title will have the name of that foreigner as a lender, meaning the representative has no right to sell or transfer the property without approval from that foreigner.

This process is exactly similar to when you get a home loan from a bank to buy a property, and this is by far the easiest and most secure way to own land in Cambodia without going through a complicated process.

Learn more about mortgage or hypothec agreement (Read more and more)

2) Through Land Holding Company

This method fits most with those who prefer to invest in a large-scale plot of land. The foreigner can form a landholding company with at least 51% Cambodian shareholders. Again, the foreigner is secured through the shareholder agreement.

However, forming a company can be costly, between US$4,000 to US$12,000 depending on lawyer. Moreover, owners also must pay taxes such as the 20% income tax, just like other registered firms registered in Cambodia.

On the other hand, if the foreigner does not want to form a company, they can also use a landholding company as the nominee, for which the procedure will be the similar to first method described above.

3) Through Trust Company

The newly enforced 2019 Trust Law allows foreigners to purchase land in Cambodia through a ‘Trust Company’. This method is quite similar to a landholding company method but less complicated as the foreigner does not have to deal with forming a company and other expenses such as tax.

To protect the foreigner, the trust company must be a high-credit firm with property registration with the Ministry of Economy and Finance. Meanwhile, both parties will also have to enter a trust agreement as stated in the Trust Law.

With the trust agreement, the trust company holds and manages the property, whereby the person setting up the trust (called the grantor, settlor, or trustor) transfers the property to a trustee, who manages the property for the benefit of others (called beneficiaries).

4) Becoming Cambodian Citizen

This is the most secure method, but you have to go through a lot of processes to become a Cambodian citizen. Under the 1996 Cambodian Nationality Law, foreigners who have obtained Cambodian citizenship from the King have the right to purchase land and become owner just like Cambodian citizens.

Nevertheless, for those foreigners who do not want to deal with complicated procedures of buying landed property, they can easily and legally buy other property such as units in co-owned buildings from the first floor upwards such as a condo or strata-title office.​ (Read more)

 

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