Can Foreigners Own Land in Cambodia? Here’s How.

Foreigners cannot technically own land in Cambodia.  

As according to Article 44 of the Cambodian Constitution, “only natural persons or legal entities of Khmer nationality shall have the right to land ownership.”  

Foreigners can however now own strata titled condominiums or strata titled commercial units with a 100% freehold hard title via the Law on the Management and Use of Co-Owned Buildings (2009), aka the Strata Law.  

It’s very important to note however that older apartment buildings, built prior to the strata law’s introduction, are also classed as landed properties by law – and cannot be legally owned by foreigners. Meanwhile, not all high-rise apartments built after the introduction of the law are strata-title-ready. IPS can however provide you guidance on which condominium projects have strata title.  

Find out more about Strata Titles Condominiums in Cambodia here.  

Or check out a selection of trusted strata-titled investments available for foreign ownership.  

Nonetheless, because Cambodia is a country that attracts a lot of foreign investors seeking land and landed properties for both long-term living and business purposes, a better question is:  

Are there ways for foreigners to own or acquire undisturbed, long-term rights to landed properties in Cambodia?  

And the answer to this question is a resounding YES! There are several ways that foreigners can effectively own land in Cambodia. These methods are well tried and tested within the market and can be achieved easily given the correct legal methods are applied.  

The Top 3 Ways for Foreigners to Purchase Land and Landed Properties in Cambodia: 

1. Through a Trusted Cambodian Nominee  

99% of foreign investors seeking to own land or landed properties in Cambodia use a nominee structure with a trusted Cambodian nominee provider because doing so is relatively simple, affordable and proven to be highly secure.   

Furthermore, any costs involved with setting up a nominee holding for the foreign investor are not due until the future sale of the prodperty being held by the appointed nominee. 

The Nominee Holding Process Explained: 

• Under this structure, foreign investors need to nominate a Cambodian national (legal citizen) to be the legal owner (nominee) of the land being purchased and sign a trust agreement with them.  

• Within this trust agreement, the nominee agrees to hold the land in their name for the purposes of the foreigner. They importantly agree to not sell the land or landed property without the express approval of the foreign beneficiary.  

• To further strengthen nominee holdings in Cambodia, it is recommended that in addition to the trust agreement, the property being purchased is also mortgaged, using the foreigners’ name as the loan provider.  

• Documents registering the mortgage on the property are then placed at the relevant Land Office making the sale of the land and its title, or its use as collateral for another loan, impossible – unless the foreigner first instructs the land office to release the mortgage that has been placed on the property and its title. 

Potential Pitfalls of Buying Land via a Nominee in Cambodia: 

However, it is extremely important to select a highly trusted nominee if you intend to buy land or landed properties via the nominee holdings structure in Cambodia – because ultimately the property title will be registered in their name, and not yours. Despite the nominee agreement, in some cases the nominee can sell the land without the consent of the foreign purchaser.  

For this reason, the preferred method of nominee for many foreign investors is not a personal nominee (such as a Cambodian wife or husband, close friend or relative) but rather a professional nominee from a trusted nominee service provider, such as a long-established and fully registered real estate agency or registered law office.  

Nominee holdings with trusted providers are backed by the reputation of that company and are unlikely to falter, as it will mean the company will face both legal action and damage to its reputation. IPS Cambodia offers such services to foreign investors.  

You can find out more about the IPS Nominee Structure here. 

2. Forming A Land Holding Company

Forming a Land Holding Company (LHC) in Cambodia is the most popular option for investors who intend to purchase and hold ownership of multiple landed properties. An LHC is legally able to purchase landed properties in Cambodia, as well as rent and sell those properties. 

The Land Holding Company Process Explained: 

• A foreigner may form a Land Holding Company (LHC) in Cambodia through a joint venture business type whereby the majority stake of the LHC is held by a Cambodian national partner, or alternatively a foreigner that has attained Cambodian citizenship.  

• The minority stake in the LHC of up to 49% is held by the foreign partner or partners. 

• Meanwhile, the 51% Cambodian shareholding of the LHC can be held by one or more nominees who may, through a Power of Attorney (POA) and other legal instruments, give control of their 51% shareholding to the 49% minority foreign shareholder/s.  

• This means that by setting up an LHC, the minority shareholder (which is the foreigner) is still able to gain 100% of the rights to make all the decisions within the company.  

• Most importantly, the foreign shareholders are able to veto any decisions to sell the land or landed properties owned by the business without their full consent.   

Potential Pitfalls of Buying Land via an LHC in Cambodia: 

The key downside of this approach is that it carries high registration fees for initial company set up, annual business admin costs and a higher tax burden when holding, renting or later selling the property assets held by the LHC. In comparison, nominee structures entail less upfront costs and processing time.  

3. Acquiring Land Via A Trust Holding

The introduction of the Trust Law of Cambodia  in 2019 has effectively regulated the trust sector in Cambodia and allows a fail-safe mechanism for foreigners to buy and control single or multiple land and landed properties in Cambodia.  

The Trust Law of Cambodia establishes a clear and comprehensive legal framework for the use of trusts to protect assets within the trust holdings for the interests of settlors, trustees and beneficiaries of those trusts. Essentially, Cambodia’s Trust Law mimics similar trust regulation found around the world.  

Benefits of Trust Holdings in Cambodia: 

• Trusts can be employed to invest in various assets, including real estate, businesses and securities.  

• The law minimizes the risk of disputes between trustors, beneficiaries and trustees through a clear process for dispute resolution.  

• The law also supports trust asset management by foreigners by assuring foreign investors of ownership and management certainty in the short and long term.  

• Trusts also provide foreign investors with a means to safeguard assets from creditors, lawsuits and other third-party risks, and can also facilitate tax reduction for foreign investors. 

• Trusts holdings, as in other countries, can also help foreign owners in matters of succession – allowing the safe and effective passing of properties and other assets to children and next of kin upon death.  

Potential Pitfalls of Buying Land via Trust Holdings in Cambodia: 

The main downside of trust holdings for property buyers in Cambodia is the costs for set up and maintenance of the trust, meaning that this option may not make sense for smaller-scale investors. However, as the sector develops, more operators are offering trustee holdings options within pre-established trusts, and these prices are becoming more accessible for non-institutional investors.  

Costs for Trust Holdings for Residential Land Buyers in Cambodia: 

• The set up and registration fees for a private trust holding via an institutional trust provider in Cambodia cost around USD$3000.  

• Meanwhile, there are annual fees to the bank and to the Government regulator. Depending on the size of land being held in the trust, these fees are around $1500 to $2500 per year for the residential buyers.   

• IPS Cambodia can support investors looking to establish a trust holding in Cambodia. Find out more today.    

FIND LAND FOR SALE IN CAMBODIA 

Other Ways for Foreigners to Purchase Land and Landed Properties in Cambodia: 

1. Leasing Property Under A Long-Term Leasehold

The long-term leasehold method is the simplest method for achieving uninterrupted control of land and landed properties in Cambodia and provides significant protections of the foreigner’s legal rights to the leased property.  

This method is most suited to buyers who are happy with holding tenure over the property for up to 100 years, and don’t intend to pass on land ownership to their heirs after the tenure period. 

The Long-term Leasehold Process Explained: 

• Individual foreigners, foreign-owned businesses or foreign-headquartered organizations are permitted to acquire effective control over Cambodian-owned land or landed properties through a long-term lease agreement.  

• Entering into long-term leases agreements will guarantee exclusive rights over landed property to foreign individuals and entities for extended periods.   

• Longterm leasehold agreements in Cambodia offer terms of a minimum of 15 years, up to a maximum of 50 years, and the lease contract may contain a provision for the term of the leasehold to be extended for consecutive periods of 50 years.  

• The lease contract can also include a provision that the land will not be sold to anyone else without the lessee’s consent.  

• Due to the long length of the leasehold over the land, this method allows ample time for construction and other major changes to the land or landed property for the required purposes of the lease. However, some major alterations to the property will require the express consent of the owner within the leasehold agreement.  

• To improve the security of long-term leaseholds, the lease may be registered against the property with the relevant Land Office. Once registered, the relevant Land Office will issue a leasehold title certificate to the lessee.  

• The leasehold certificate protects the long-term interests of the lessee and ensures that the property cannot be sold or leased without the permission of the lessee.  

Need clarification on the long-term leasing process in Cambodia? No worries, contact our professional team today! 

FIND LAND FOR LEASE ACROSS CAMBODIA  

2. Marrying A Cambodian National 

Akin to the nominee structure detailed above, when a foreigner is married to a Cambodian citizen, they are permitted to buy a land or landed property under the name of their spouse on the title deed.   

It should be noted that under Cambodian Law, a foreigner married to a Cambodian that is not a citizen of Cambodia is not permitted to be registered on a land title. However, if a foreigner has been granted citizenship, both the spouse and the foreigner’s name are allowed to be registered on a land title.   

To strengthen your rights to a matrimonial property as a foreigner in Cambodia, you may like to consider setting up a nominee structure as detailed above. That way, if the relationship sours in future, you still have control over any landed properties that you purchased during the relationship. 

Another option is to purchase a strata-titled condominium, as this can be held in the foreigner’s name entirely – and will offer no risk if the relationship goes south.  

3. Acquiring A Cambodian Citizenship 

Under Cambodian Law, only Cambodians have the right to own a land or landed properties in the country. Therefore, acquiring Cambodian citizenship will earn foreigners the right to own a land completely without having to partner with a majority Cambodian stakeholder, lease, or undergo a nominee structure.   

However, in practice, it is very difficult to obtain citizenship in Cambodia as a foreigner without a sizable investment to assist the process (upwards of USD$300,000).   

While there are routes for foreigners to obtain Cambodian citizenship, all IPS clients and expat staff who live/work/retire in Cambodia use the E-Class visa on a recurring basis for permanent residency (and in some cases, the new Retirement Visa) rather than seek citizenship. Given there are already multiple legal structures that allow foreigners can buy land in Cambodia, there are no practical advantages to becoming a citizen. 

Find out more about the requirements for attaining citizenship in Cambodia.  

Conclusion 

As detailed above, foreigners are allowed to own land in Cambodia under specific conditions and with some limitations. However, when doing so it’s crucial for foreign investors to have a clear understanding of the relevant law and practice.  

Proper legal and physical due diligence is also essential to verify the validity of any land title before making a purchase – whether it be land, landed properties or strata titled condominiums and offices.  

Seeking professional assistance from a reputable and registered property agency and registered Cambodian lawyer can provide guidance and support throughout the prospecting and purchasing process. 

Don’t hesitate to reach out to IPS Cambodia, a reputable and registered property agency in Cambodia for over 15 years and running, for any queries or assistance related to purchasing property safely in Cambodia. While we are not a registered law firm, we work closely with trusted legal partners who can assist in any matters that we cannot.  

Contact IPS Cambodia today to start your journey towards Cambodian property ownership!