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                                              ADVICE FOR FOREIGN BUYERS
          Introduction

There are two categories of property available to foreigners to buy in Cambodia; property that is directly in contact with sub-soil, and property that is located above ground level and is not directly in contact with sub-soil. This latter category of property includes apartments and condominiums in multi-share buildings that are on or above the first storey. Under a recent law, foreigners can retain a full right of ownership over such property.

For all other forms of property ownership, including land ownership, the following legal principal applies: foreign nationals cannot hold a 100% stake in real property within the Kingdom of Cambodia if the property is directly in contact with the sub-soil. However, legal mechanisms and documentation exist that allow foreigners to fully control the purchase, sale and use of real property in which they have invested.

The following summary is designed to give a basic idea of the purchase options available to foreigners for both categories of real estate.

1. Ownership of Units in Multi-Share Buildings

Under a recent law passed by the Royal Government, foreign nationals may purchase individual units in multi-share buildings such as apartments and condominiums and retain a 100% right of ownership. This type of property comes with full Title, and the foreign buyer retains complete control over the ability to profit from the future sale of their asset.

The key proviso contained in the new law forbids foreigners from owning ground-level units in this type of multi-share building. This proviso side-steps the legal principal of foreigners being barred from owning sub-soil. However, full ownership is available for units on or above the first storey of multi-share buildings.

2. Registering Real Estate with a Cambodian Citizen

Foreign nationals can nominate a Cambodian citizen in whose name the Title Deed of any property they purchase can be registered. The Cambodian citizen does not have to be resident in Cambodia, but they must be able to prove their nationality.

Foreigners choosing to purchase real estate by this method retain possession of the Title Deed, which provides quite a high degree of security under Cambodian land law because property sales are impossible without a Title Deed. Transferring the Cambodian’s rights to the foreigner via a Mortgage or Lease Agreements provides additional security.

Copies of the Title Deed and any Mortgage or Lease Agreements must be registered with the Department of Provincial Land Management, Urban Planning and Construction, as well as the appropriate District and central government departments that handle land registry. Most importantly, a copy of the Land Title and any Mortgage or Lease Agreements must be lodged with the Cadastral Land Registry Office.

3. Forming a Company to Register Property Ownership

One of the safest ways for foreign nationals to purchase real estate property within Cambodia is to form a limited company in partnership with a Cambodian citizen. Real estate purchased for investment is then registered in the name of the company. The company must have a minimum 51% Cambodian shareholding, but careful drafting of the Company Document and the rights appended to share certificates can ensure the foreigner’s full control of the company and its assets. Further legal protection can be achieved by adding mortgage, security and Power of Attorney documents to company documentation.
The foreign investor is expected to meet the administrative costs of setting up the company, plus the full purchase price [and construction costs] of any real estate purchased in the name of the company. Any revenue or profits generated by future sale of the property goes entirely to the foreign shareholders of the company. The precise details of the disbursement of profits in the event of a sale should be specified carefully in the Company Document and any additional legal documentation.

4. Marriage to a Cambodian National

Foreigns married to Cambodian citizens can register the ownership of real estate in the name of their wives/husbands. on the Title Deed. It is also possible for a foreign national married to a Cambodian citizen and resident in the country for a long period to apply for Cambodian citizenship. In the event of citizenship being granted, Cambodian Law holds that land can be registered in the names of both parties. Neither partner can subsequently sell the land or property without mutual agreement.

Note : In the event of divorce or separation, division of the land or property is dependent on the conditions under which divorce or separation takes place, and the decision of any court ruling or arbitration relating to the divorce. Generally, local courts will favour a Cambodian citizen over a foreign national when settling such disputes, regardless of the circumstances in which divorce or separation take place.

         Independent Legal Advice

CamGLOBE Realtor recommends that clients consider seeking independent legal advice before entering into any contract to buy and sell real estate.

Law firms within the Kingdom are not allowed to promote their services and therefore CamGLOBE Realtor cannot recommend specific law firms. However, reputable local and international legal firms exist in Cambodia that offer a full range of services related to real estate. The legal advice and document preparation available through such firms includes :

• Providing legal advice on local laws
• Advice on project and financing documentation
• Obtaining business and project licenses
• Drafting joint venture agreement
• Incorporation and registration of compaties
• Advice on labour law and employment contracts
• Advice on the ownership, lease, titling and registration of land
• Registration and protection of intellectual property
• Taxation
• Corporate governance
• Dispute resolution