How foreigners can buy landed properties in Cambodia through trust company?

Why do expats in Cambodia want to buy landed properties?

On the one hand, some people have worked hard in Cambodia for many years and earned some money, they want to settle down and have their own house here.

On the other hand, they are interested in the development prospects of Cambodia and want to buy real estate for investment purposes.

However, according to the law, foreigners are not allowed to directly purchase land or landed properties in Cambodia, so trusts have become an important method.

※Why need trusts?

In Cambodia, although foreigners can buy real estate, but they cannot buy Cambodian land or landed properties such as linkhouses, shophouses, villas and other Borey products in their own name. 

And trusts allows foreigners to legally invest in Cambodian landed properties without having to become a Cambodian citizen. It is one of the important ways for foreigners to invest in the Cambodian real estate market, especially landed properties.

In November 2023, when Cambodian Prime Minister Hun Manat attended “the 19th Government-Private Sector Forum”, he stated that existing laws allow foreigners to obtain ownership of land and property in some form. The “Trust Law” promulgated in 2019 also allows foreigners to purchase land in Cambodia through trusts in accordance with relevant laws.

Compared with other legal ways to own landed property, it is always uneasy for foreigners to buy a house in the name of a Cambodian. Generally, this method is not recommended unless their spouse is Cambodian, and trusts are subject to legal supervision and protection which can effectively control risks.

In term of  establishing a land holding company, foreigners can only own up to 49% of the equity. Although this method is safe, it will bring high registration fees, annual management costs, and high taxes that may be incurred when disposing of the property in the future. In contrast, the trust process is relatively simple and the fees are relatively low.

※How to distinguish between real and fake trust companies?

Trust companies in Cambodia that have applied for approval are financial institutions approved and regulated by the Securities and Exchange Commission of Cambodia (SECC).

You can go to the official website of SECC (http://www.secc.gov.kh) for inquiries as the following steps：

① Log in to the SECC official website

② Click “Market Participants”

③ Click “Intermediaries”

④ View trust companies information in “Trustee”

※Licensed trust companies in Cambodia

Currently, there are 8 trust companies certified by the SECC official website, including Cana Trust, Prince Trust, GC Trust, BIC Trust, etc. The following is some basic information of trust companies:

Cana Trust Co., Ltd. was established in May 2018 as the first Trust Company in Cambodia. Leveraging on Canadia Bank Plc’s resources and network, which has more than 30 years (since 1991) of financial experience, it provide Property trust services, Property Due Diligence Services, One-Stop Full Service, Company Registration Services, etc.

Website: https://www.canatrust.com.kh/en/

GC Trust is financial company with legally set trust according to the Trust law of Cambodia Kingdom. It was approved by the Cambodia government and Securities and Exchange Commission to run capital trust, land trust and property trust. It is a financial company with legal trust license approved by Cambodia.

Website: https://gcc-gp.com/en/gc-trust/

B.I.C Trust Co., Ltd, is a licensed trust company operating in Cambodia under the regulations of The Securities and Exchange Regulator of Cambodia (SERC) and the guidance of The Trust Regulator of Cambodia; specializing in trust service including Collective Investment Scheme (CIS) and Commercial Trust.

Website: https://bictrust.com.kh/

※How to buy landed property through trust company?

1.Determine the project to purchase you house

During the house selection and viewing stages, home buyers need to learn more about the project, developer, location and other development conditions, and also check the property rights and other documents of the project, Once you make sure that they don't have any other problems, you can select the unit, confirm the price, payment terms, and prepare a home purchase agreement, etc.

2.Determine the trust company

After confirming which trust company to holds and manages your trust assets in Cambodia on your behalf, you should provide relevant information to the trust company for investigation, review and evaluation, including information of property (hard title, location, etc.), personal information (passport, bank account, contact information, etc.).

3.Prepare trust agreement

After receiving the property appraisal report, if there are no problems, you can enter the stage of preparing a trust agreement. The agreement must clarify the rights, obligations, responsibilities of each party, as well as relevant information about the trust assets, etc.

4. Sign a house purchase agreement

The buyer pays the house payment (Down payment) after signing the agreement. This house purchase agreement must be confirmed by the trust company's lawyer, and at the same time, it is noted in the agreement that it is held by “XXX” trust company.

5. Sign a trust agreement and register the trust assets 

After signing the house purchase agreement, you’ll have to  sign a trust agreement with the trust company and pay part of the trust fees. Subsequently, the trust company needs to prepare relevant documents and register the trust assets with the trust regulatory agency. Registration ensures compliance with legal and regulatory requirements. Trust regulators ensure accurate information and increase security by issuing trust registration certificates to trustor.

6. Transfer of property rights

Finally, the property rights of the purchased property are transferred to the name of the trust company, and the buyer retains the title certificate, pays the remaining trust fees, and signs a power of attorney.

The trust company continues to manage the property on behalf of the buyer (the trustor), such as property management, drafting lease agreements, and resolving any legal or administrative issues of the property.

※How much does a trust charge?

Currently, each trust company charges different fees, and each service fee will also vary depending on the property price, location, etc. Typically, trust fees are renewed every five years.