Smart property investment is attainable if you follow some simple guidelines, and the following is how foreigners can do this under Cambodia law.
Abode Real Estate is here to help you understand and navigate this process, if you need.
There are essentially 5 smart investment options that allow for foreigners to buy property in Cambodia:
- Forming a company with a Cambodian Citizen (>50% Cambodian shareholding) with which to buy property;
- Obtaining Cambodian citizenship (see CM2H program) in Cambodia or by marriage (to buy under his / her name);
- Buy property with a Cambodian citizen’s name and putting legally protective measures in place (such as hypothee or long term lease);
- Obtaining a long-term lease (<90 years); and
- Purchasing a strata title / condo property (this is the only hard title property type that can be purchased under a foreigner’s name).
The Cambodian government unveiled new foreign ownership laws related to co-owned (or shared) buildings in 2010 indicating that:
- Foreigners cannot own ground floor properties and/or land (soft or hard title)
- Total foreign ownership of private units must not exceed 70% of a single building or condo project
- Does not apply to properties <30km of national borders (some exceptions e.g. SEZ)
Smart property investment and a bit about us
Abode, established in December 2020, is a Khmer-owned real estate company offering quality property in Cambodia. We once practiced under ‘Freer Properties’, but legally transitioned to be able to offer independent and unique services. Our basic tenets are to provide:
- Accurate evaluations to ensure each property is marketed right the first time and every time. We do this through knowing the market and applying that knowledge at every step of the way;
- Basic legal advice where we can and referral where we cannot (to help you understand and grapple with the murky foreign ownership laws). It isn’t easy, but we try to make it so; and
- Useful and up to date information to help you explore Phnom Penh and Cambodia safely and meaningfully. This can be a great place if you are prepared, but can be a nightmare, if you are not.
We understand that buying, selling and renting property requires finesse. It is an important decision and we take pride in understanding all your needs. We explore all possible options and cross match properties accordingly. Abode can help you buy a property through a variety of means, including working with brokers and other agencies.
Service Agreement to support smart property investment
A ‘Service Agreement’ would enable holding of shares to enable foreign property ownership / control of a property. This includes the provision of:
- Real estate / investment strategy services
- An upfront (non refundable) payment
- Built-in checking mechanism for payment of taxes and other legal obligations
- The contract automatically ceased if non-payment
- Property purchased under Abode and shared with buyer
- Unanimous agreement of all shareholders required to sell or modify the property
Shareholder Agreement
The following is a simple guide to the aspects of a basic agreement, although this is likely to differ between individual cases and would be the result of careful consideration and discussions:
- A company would need to be established to enable a shareholding structure (approx. cost $2,500)
- Monthly tax filing services would be put in place to avoid any nasty surprises
- Please note that Land Tax as an annual company liability is currently set at 0.01%
- A mortgage could be established on the property (but this applies to condos or strata title only)
- Property owned 51% by the holding company / 49% foreign ownership
- 100% shareholder resolution is required to sell / modify the property
