Property Ownership in Cambodia for Foreigners

Koh Thonsay beachCambodia has a freehold system of land ownership, with private ownership of land allowed for specific types of land. However land ownership is restricted to Cambodian citizens. Despite this restriction, it is not impossible for foreigners to obtain land rights in Cambodia, with ownership of some types of property actually relatively simple.

There are four main types of land and property tenure in Cambodia:

1. Freehold:
This is unrestricted land ownership. Foreigners rights to freehold land are restricted to purchasing through a company, providing that at least 51% of the shares are held by a Cambodian citizen. It is also possible for a foreigner to be granted “Honorary Citizenship” to Cambodia which will entitle them to purchase freehold land as an individual. Honorary Citizenship is granted by making a significant financial contribution to the government for the purpose of benefiting the country.

2. Leasehold:
This includes long-term leases which can be from 15 to 50 years in length which can also be renewed for an additional 50 years. It is not difficult for a foreigner to obtain a leasehold in Cambodia. There is no requirement for a lease to have consideration, so it is possible to provide the funds for a Cambodian citizen to purchase a freehold property and then lease the land from them without consideration, however it is recommended that you obtain legal advice before entering such an arrangement to ensure your rights are protected and you don’t fall foul of Cambodian rules.

3. Concessional Leases:
Concessional leases are granted by the government over state private land. They are generally only granted for development and industrial purposes. The concessions that can be obtained in Cambodia include Social Concessions (to build residential properties for example), Economic Concessions (for industrial and agricultural purposes) and Development Concession (which may include mining and industrial development). Concessional leases are granted by the state for up to 99 years.

Concessional Leases have recently been the subject of many land disputes and issues of human rights violations (in terms of denying people the right to adequate housing for example) have been raised.  If you are considering obtaining a Concessional Lease, we recommend you undertake due diligence regarding the land, its current uses and any rights the people currently inhabiting the land may have over it before entering into the investment.

4. Strata Title:
This applies to apartment buildings and is a relatively new concept in Cambodia, so it generally applies only to new constructions. A foreigner is able to acquire apartments with a strata title providing they do not purchase on the ground floor of an apartment building (the ground floor restriction is intended to ensure that a foreigner can own “Cambodian soil”).  Up to 70% of the apartments in one building can be owned by foreigners under strata title.

The strata title sector of the market is growing rapidly, with new development projects coming up on the horizon, making it an exciting time to enter this part of the Cambodian property market.

Aside from the requirements outlined above, there is only one other main restriction on foreign property ownership in Cambodia, being that foreigners cannot purchase property within 30 kilometers of the Cambodian border. This is a matter of national safety and security.

There are now more foreigners interested in purchasing property in Cambodia, with investors from China, Europe and North America all entering the market. Growth in the market reflects the legislative changes of 2010 that were directed at making foreign ownership of property easier. Cambodia appears to be on the cusp of a boom, which makes it a great time to have a look at investing in Cambodia as your second home.