4 tips for foreigners to buy real estate in Cambodia

Many foreigners are now living, working and doing business in Cambodia. Some of them came to live for a short time and some bought a family home in Cambodia with their children and grandchildren peacefully. Do those foreigners have the right to buy real estate in Cambodia as their own?

The 1993 Constitution states that only natural persons or legal entities of Khmer nationality have the right to own real estate. But this supreme law does not prohibit foreigners from buying or investing in land in Cambodia.

According to an official from the Ministry of Land Management, Urban Planning and Construction, foreigners have the right to own property, but only on co-ownership buildings can not buy ground floor housing.

So how can foreigners buy real estate in Cambodia?

In practice, Cambodian law also allows foreigners to buy real estate in Cambodia, which is done through four main methods, including:

1) - Khmer citizenship

This means that according to the 1996 Cambodian Citizenship Law, foreigners who have obtained Cambodian citizenship from the King have the same rights to immovable property and become property owners as Cambodian citizens.

However, for foreigners who do not want to bother buying real estate, they can easily and legally own a co-ownership building from the first floor upwards, for example a condominium.

2) - Through Khmer representatives

Foreigners can buy land through a Cambodian representative, but on the title deed must be named a Cambodian representative, not a foreigner. To protect those foreign investors, they must have a guarantee contract with their representative.

Guaranteed contracts can take many forms, such as mortgage contracts, long-term leases, or loan agreements. But the most popular and safest contract is a mortgage contract, which means that the Cambodian is asking for a loan from abroad to buy land, so the land title is attached to the mortgage, as in the case of us borrowing money from the bank to buy land.

Simply put, the Cambodian representative has the name on the title deed, but has no right to sell or transfer ownership without the permission of the foreign mortgage owner. Therefore, both parties have to mortgage the land with the proper cadastre.

3) - Purchase through a trust company

Law on Governance 2019 Foreigners can buy land in Cambodia through a government company registered with the Ministry of Economy and Finance. The purchase must also be a letter of guarantee or a standing agreement in accordance with the terms of the law.

This type of company is a company that owns or manages assets that the founder of the administration (called a grantee, trustee or trustee) transfers the assets to the trustee, who manages the assets for the benefit of others (called the trustee).

Simply put, buying through a reputable company will be highly responsible, with the Board of Governors acting as the property manager for foreigners without the right to resell, even if the land is in the name of the company. By. Buying in this way, foreigners will gain high confidence and do not have to lose the cost of starting your own company.

4) - Through a corporation with at least 51% Cambodian ownership or Land Holding Company

In this way, foreigners can occupy the land as a Cambodian company, holding at least 51% of the shares and foreigners holding 49%. In this way, foreigners are protected by stock contracts.

This method is more expensive. If the foreigner intends to open a new company, it will cost at least $ 4,000 to $ 12,000, depending on the services of a lawyer. In addition, opening a company to buy such land, foreigners are obliged to pay legal taxes such as 20% income tax or annual patent tax. Therefore, this method should be used in case of large-scale investment.

However, if a foreigner does not want to start his own company, foreigners can also use the corporation as a purchasing agent through various binding agreements, such as mortgage contracts, long-term lease agreements or loan agreements, the same as the first method.

Source : Compass Original