Cambodian Land Trade: Land Property Rights

Land is a non-renewable resource with the characteristics of scarcity of supply and diversity of use. Cambodia has a stable social and political situation, a relaxed investment environment, and is very attractive to foreign investment. Relatively cheap land prices and permanent land ownership give great imagination space for land appreciation, and land has become a hot spot for foreign investment in Cambodia. In order to enable foreign investors to have understanding of Cambodia land laws and regulations and to avoid investment risks, we sum up the following points based on previous land investment cases and experience for investors'reference:
Land ownership
Land in the Kingdom of Cambodia is divided into state-owned land and private land according to the nature of ownership. State-owned land includes forests, rivers, natural lakes, riverbanks, beaches, roads and so on. No individual or company can acquire the ownership of state-owned land or the right to develop state-owned land in any form. Private land is divided into state private and individual private. State private land can be transferred, leased or licensed according to relevant sub-decrees. Individual private land can be freely transferred, given, exchanged or leased.
Subject qualification of investment land
According to the Land Law of the Kingdom of Cambodia, only natural persons of Cambodian nationality or legal persons of companies of Cambodian nationality are eligible to hold land ownership. If a company registered in Cambodia has no less than 51% of its shares held by natural or legal shareholders of Cambodian nationality, the legal person of the company can be recognized as having Cambodian nationality according to law. Therefore, if foreign investors want to acquire the ownership of Cambodia land, they must first meet the requirements of this subject qualification. In practice, foreign investors can apply for Cambodian citizenship by means of "investment immigration" or establish a Cambodian corporate by adopting appropriate equity structure design.
Land Ownership Documents
As mentioned before, the target land purchased by investors must be land of a private nature. At present, Cambodia private land ownership files include soft land certificate and hard land certificate. Soft land certificate consists of a series of documents, which are signed by the village head and township head of the place where the land is located. Soft land certificates are only registered with county (district) cadastral committees, not formal land ownership certificates. Soft certificate land can not be used for bank mortgage loan, but soft certificate land currently occupies a large proportion in Cambodia, especially agricultural land. Hard land certificate is a formal real estate ownership document issued by the provincial cadastral Committee of the place where the land is located.
When an investor purchases soft land certificate, he should first transfer the soft land certificate to the investor's name, and then apply for the hard land certificate to the provincial cadastral committee. To apply for the conversion of soft land certificate to hard land certificate, the cadastral management department should pay a certain fee. The specific payment standard is determined according to the specific location of the land. Such fee can be borne by the buyers and sellers of the land through consultation. If the investor purchases hard-certificated land, he or she will have to pay 4% of the real estate transfer tax according to the transfer price of the land agreement. The real estate transfer tax is also borne by the buyers and sellers through consultation.
In the process of land transaction, deposit and payment of land price are determined by the buyer and seller through consultation, which is not mandatory in Cambodia law.
Land leasing and land concession
In addition to acquiring land ownership, investors can also acquire land development and use rights through leasing and franchising. The longest term of land lease is 50 years, and the lease term is longer than 15 years. The long-term lease agreement can be registered with the Cadastral Committee. Concessioned land has a maximum age of 99 years, but the Cambodian government has suspended the approval of new concessions since 2012.
Preliminary investigation of investment land
Whether land is purchased or leased, investors are advised to conduct pre-investigation on the target land. The content of the survey includes the status quo of land ownership, land ownership restrictions, ownership defects, land planning and so on. The full pre-investigation can avoid the risk of land investment to the greatest extent. (This article is excerpted from Chinese information)