The Four Ways Of Establishing Control Over Land

1. Buying land through a locally-incorporated company

    Foreigners often hold land in Cambodia through a company. This structure offers the least risk for the foreign investor, who can be an individual, or a legal person. More than one piece of land can be held. But setting up a landholding company is expensive, and there is a high maintenance cost, and taxes on rental income are quite high.

    The applicable legislation is the Law on the Investment of the Kingdom of Cambodia (Chapter VI, Article 16), which states that ownership of land can be vested in "legal entities in which more than 51% of the equity capital are directly owned by natural persons or legal entities holding Cambodian citizenship". Moreover, "use of land shall be permitted to investors, including long-term leases of up to a period of 70 years, renewable upon request".

2. Taking control of land through a lease.

    Long-term leases are another common way for foreigners to control land in Cambodia. For instance, the super-luxurious Phnom Penh Raffles Le Royal Hotel is held on a long-term lease. A long term lease gives the lessor all necessary rights to develop the land - e.g., he can get construction permission in his own name.

3. Buying land by acquiring Cambodian citizenship.

    Taking out Cambodian citizenship is one way of getting the right to buy land, which the government is encouraging. Citizenship applications will be considered if a significant investment is being make in Cambodia. It is important to ensure that the Ministry of the Interior, the Council of Ministers, and the President, all agree to the grant of Citizenship.

4. Buying land through a nominee structure

Often used by investors because it is simple and cheap, the nominee structure ignore the Constitutional prohibition on direct ownership of property by foreigners, and is illegal and strongly discouraged by all land lawyers.

    The following is how the structure works. The investor signs a trust agreement with the holder of the land: "I hold this land for you." The land is then mortgaged, and leased to the foreigner.

Editor：Chea