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Investors Guide

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[heading icon=”fa-question” type=”block” size=”h4″ extra=””]Investors Guide[/heading]
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[togglehead id=”ss” tab_id=”ss0″]Why Invest In Cambodia?
[togglebody tab_id=”ss0″]Cambodia is deemed by many to be a last investor’s frontier in Southeast Asia. It is brimming with raw natural resources and undeveloped talent. When foreign investors bring capital and first-world know-how to the table, magical things can happen…

Cambodia offers investors a package of benefits, which makes freehold ownership just one incentive among many; In Cambodia, there is very little discrimination between foreigners and locals in regards to company registration, taxes and customs duties. Meanwhile, the country is geographically central, with a young and motivated labor pool, and, of course, buoyed by the US dollar. Furthermore, Cambodian based manufacturers still enjoy tax-free export to Europe because Cambodia is still classed as a less developed country (LDC).

Rami Sharaf, Member of International Advisory Council, APCO Worldwide, and a well-known advocate for the Cambodian market, says that, “the major attraction for foreign investors considering whether they should invest in Cambodia is the ASEAN-member nation’s steady economic growth; phenomenally steady growth: 7.5 per cent average for the last 5 years, year on year. This puts Cambodia as the number 21 worldwide in growth, and number 1 in the region.”

1) Cambodian Investment Opportunity in Short:

Why Invest In Cambodian Property?

US$ Investment Economy: Invest in the world’s most resilient currency as Cambodia has long been a dollarised economy and will continue to be.

Virgin Investment Territory: Enormous growth potential and very positive appreciation trends in recent years.
Strong, Sustained Growth in GDP: 7% average for the last 5 years, year on year. No. #15 worldwide in growth, and No. #1 in the region.

Secure Assets: Freehold Foreign Ownership Laws and Attractive Long Term Lease Policies.
Strategic Location: Sandwiched between two strong economies, Thailand and Vietnam; Midway between the world’s largest and fastest growing economies, China and India; and sitting between Australasia and Asia, with trade agreements connecting it to both.

Political Stability: The country has had the same Prime Minister for more than a quarter of a century, the longest serving non-royal leader in South East Asia.

Trade Integration: Joined ASEAN for increased access to regional markets; LDC status gives tariff free access to highly developed markets in Europe and Americas.

Improved Logistics: Deep sea port, railways, roads and flight connections around the nation and Asia growing yearly.
Retirees’ Mecca: Due to a unique, low-cost quality of life.

Cambodia is Unique: Less-developed countries with high growth potential are not usually so actively welcoming of investment and are typically more politically and financially unstable.

The combination of a stable government and banking industry, pro-business and pro-foreign investment policies, and tremendous growth potential is relatively rare. Financial and governmental stability are typically associated with more mature markets that have greater barriers to entry combined with less growth potential.

This unusual combination of pro-growth and development factors has already yielded substantial development and progress in Cambodia, yet there remains more money to be made.

This is a country and a populace eager for growth and doing a great many things right. It is an exciting time for both local nationals looking forward to a brighter future and for potential foreign investors looking for an investment frontier.

Pro-business government policies have helped attract foreign investment to the many different market sectors, including: Offices and Commercial Development; Retail Development; Industrial Development; Residential Real Estate; Agricultural Development.

It is also literally well positioned due to its physical proximity to some of the most vibrant markets on the planet. This fact is being capitalized upon and enhanced via regional trade agreements that strengthen Cambodia’s ties to multiple large, developed markets.

Cambodia has a young, energetic workforce and a rich and intriguing cultural heritage. Both of these treasures are nestled amidst a landscape filled with natural beauty that draws more and more tourism every year. It is a world filled with opportunity for any investors who are willing to do their due diligence and bring first world savvy and capital with them to the bargaining table.

It is still a corner of the world being overlooked by many people. This oversight is one they may live to regret. Although there is always an element of risk in any kind of investment, the fundamentals here are incredibly strong.

Thus, well planned, well managed foreign development projects have excellent prospects.

This is a place where dreams can not only become reality, they can shape the future. What would you like to build? Aquaculture? An organic farm? A world class hotel? A state-of the art condo?


2) The Current Outlook and Key Development Trends:

The country enjoys a relatively low cost of living, which helps keep wages low, thus making it a place investors can get their feet wet with relatively low risks. The government has liberal business policies and is actively seeking to attract additional foreign investment. It is a beautiful country with a rich heritage, fueling opportunities in tourism. It has an unusually good geographic position, giving it access to some of the largest and most active and growing markets in the world.

Due to its membership in ASEAN, it has access to the ASEAN Free Trade Area.

ASEAN is kind of like the European Union for the Southeast Asian Nations. For comparison, the countries of the European Union have 508 million people and the ASEAN countries have 625 million people and are a less mature market, providing vastly more opportunity for growth.

Cambodia joined the Association of Southeast Asian Nations (ASEAN) in 1999. This multinational organization has substantial goals of economic development for the group of countries located roughly between Australia and China, many of them island nations.

If ASEAN were a single country, it would have the seventh largest economy in the world, after the US, China, Japan, Germany, France and the United Kingdom. Please note that Germany, France and the United Kingdom are all members of the European Union, the organization ASEAN is hoping to emulate to some degree.

Additionally, Cambodia has been designated one of the Least Developed Countries (LDC), which gives it preferential access and free trade to both the European and North American markets. Cambodia’s LDC status gives it preferential access to some of the richest markets in the world for certain products.

Obviously, the country’s qualification as one of the Least Developed Countries has some downsides, such as limited infrastructure and widespread poverty. But, increasingly, there is evidence that foreign companies typically provide both better pay and better working conditions for local nationals.

This means that investing in an LDC can be a case of doing good while doing well: You can feel good about the improvements your investment is bringing to the country while also being happy with the benefit to your own bottom line.

In fact, the poverty rate in Cambodia has dropped dramatically from 47.5 percent in 1993 to just 23 percent in 2011. So while it is still a poor country, it is seeing incredible forward progress. This fact helps ensure that investment will be profitable for the investors.

Additionally, Cambodia is midway between China and India. Very recently, India displaced China as the world’s fastest growing economy. Due to its location, Cambodia has excellent geographic access to both of these huge, emerging markets. The wealth of the future is practically guaranteed to be determined by who has access to these extremely large and very fast growing markets. Talks are under way between India and ASEAN, which could create a similar trade block.

In 2010, the China–ASEAN Free Trade Area (CAFTA) became a reality, giving member nations access to a trading block of 1.7 billion people. ASEAN also has an agreement with Australia and New Zealand that creates yet another free trade area in the other direction (AANZFTA).

In 2003, the Heritage Foundation’s Index of Economic Freedom ranked Cambodia 35th among 170 countries in terms of economic freedom. This puts in on par with Japan and places it well ahead of many of its neighbors in the ASEAN community. Thus, it constitutes one of the most open economies in the region. At that time, the Index of Economic Freedom commented on positive governmental policies.

Cambodia has been noticed for its unusual degree of market-friendliness for an LDC. The areas of note include:

Opportunities in Tourism:

Unlike its neighbors, such as Thailand and Vietnam, Cambodia explicitly desires to attract foreign investment in its tourism sector. Tourism is the area in which Cambodia rightly most wants to attract foreign investment. This goal is little different than its neighbors like Thailand, Vietnam and most recently even Laos. In recent years, tourism to Cambodia has exploded, enjoying double digit increases many years and hitting 4.5 million tourists in 2014.

In 1992, Angkor Wat, the world’s largest religious monument, was named a World Heritage Site. It attracts significant interest, fueling growth of hotels and other amenities in the nearby town of Siem Reap. While it is certainly the best known site in Cambodia, there is no shortage of cultural heritage and natural beauty for attracting additional tourism dollars to the country. Development of hotels, golf courses and other amenities are a strong market.

The government has a track record of dealing progressively with this development segment, such as at the Phnom Penh International Airport which has recently seen huge capacity development.

Retail Growth:

The retail sector is growing rapidly: New malls, such as AEON Mall – with AEON Mall 2 and Parkson on the way soon in 2016, are having a dramatic influence on Phnom Penh’s retail sector.

According to Knight Frank Cambodia’s: “Cambodia Real Estate Highlights 1st Half 2015,” total supply is building fast: 2011: 59,154 sqm; 2012: 66,154 sqm; 2013: 72,114 sqm; 2014-15: 134,153 sqm; 2016: 223,173 sqm (est.); 2017: 297,591 sqm (est.).

With the entrance of a host of new brands and extensions of existing franchises in the retail sector, the supply by district is evening out. The evening of the share of retail supply could be related to new and existing brands increasingly looking outside of the Phnom Penh city center, where their customers are increasingly choosing to live.
Agricultural Investment Opportunities:

An abundance of water and fertile land combined with affordable local labor creates significant opportunity for agricultural investment and development, such as in organic farming and agro-processing.

Foreign partners bring not only capital, but also essential knowledge and skill to the table. The combination of forces is very often a win/win for both sides. Although land cannot be owned by foreign investors, access to land is readily available via 99-year leases and joint ventures where a local partner owns at least 51 percent of the equity.

Some hot agricultural areas include: fisheries, rubber processing, sugar processing, jute, palm oil refineries, and large varieties of tropical fruits and organic produce.
Foreign Direct Investment (FDI):

Throughout the 1990s, Cambodia attracted increasing amounts of Foreign Direct Investment. Malaysia got in early and captured a great deal of “first mover” benefit, as well as concessions for their investments, such in mining and forestry.

Cambodia has come a long way since Malaysia first took notice of the country in terms of internal improvements and development, yet there remains a great deal of room for additional growth. The good track record of improvement combined with so much remaining upside is a situation that is extremely attractive for investors.

3) Tykoonre.com’s 2015 Cambodia Real Estate Review:

What is the state of the nation’s development now as 2016 rolls in, for real estate investors?

The economy is growing rapidly:

Cambodia’s economic growth over the last 10 years has been some of the fastest and most-consistent in the Southeast Asian region, recording an average GDP growth of 7.0% per year since 2010. In 2015, this rate dropped very slightly to 6.9%.

Cambodia has a total population of 15.4 million, and Phnom Penh, Cambodia’s capital city and economic hub with a population of around 2.5 million, in 2015 was second only to Laos in Southeast Asia for the fastest rate of urban spatial extension, as indicated by the World Bank.

One of Cambodia’s key secrets to success in its economic growth has been creating an attractive environment for foreign investment, and this remains a key driver.

In 2015, Cambodia received over $4B in foreign direct investment (FDI) and has a permanent expat population of over 78,000. Tykoonre.com suggest that Cambodia is becoming a magnet for FDI due to the abundance of low-cost labor, rapid urbanization, an increasing middle-class consumer market, low barriers to entry for foreign businesses, relative proficiency in English language, attractive tax incentives and import/export duty exemptions, continually improving logistics networks, and an economy backed by the US dollar.

Furthermore, with the solidification of ASEAN, Cambodia is well located, surrounded by strong regional economies that are increasingly outsourcing low and mid-level skilled manufacturing operations to the Kingdom. These new industrial opportunities are lessening the economy’s reliance on the garment industry, and offering low-wage workers more opportunities for career and skills growth.

Cambodians are also entering the global community en-masse through technology – namely through dramatic increases in internet penetration throughout the population. In 2015, Cambodia had over 5 million internet users, a third of the population.

Since 2010, foreigners have also been allowed to own apartments and condominium units in Cambodia – but not land, and, accordingly, not the first floor of buildings. While foreign ownership of land in still unconstitutional, land can be easily held by foreigners on long leases that are renewable, and through majority locally-owned companies incorporated in Cambodia. These structures are arguably safer than comparative legal schemes in other Southeast Asian states in which foreign land ownership is formally prohibited.

Phnom Penh Overview:

Phnom Penh is the capital of Cambodia, situated at the confluence of three rivers, the Mekong, the Bassac and the Tonle Sap. The Phnom Penh metropolitan area is home to about 2.5 million permanent residents.

Phnom Penh is Cambodia’s economic center as it accounts for the largest portion of the Cambodian economy. High economic growth rates in recent years have triggered a real estate boom in Phnom Penh and construction is taking place across the city, with a plethora of new hotels, restaurants, bars, and high rise residential and commercial buildings springing up around the city.

Industrial zones at the edge of the city have also expanded continuously in recent years, along with huge growth in the “borey” sector throughout the suburbs of Phnom Penh, “borey” essentially meaning gated community residential developments with self-serving infrastructure. These types of properties are extremely popular with local buyers and offer various housing types. Most of these properties are being bought off-plan.

The Phnom Penh Master Plan 2035, supposedly nearing completion by the government this year, seeks to dictate the urban planning for the expansion of the city and construct new infrastructure to accommodate the growing population.

Until now, the city has had no zoning regulations of note nor identifiable urban development planning.

According to tykoonre.com research, flats located in central Phnom Penh cost around $3000 USD p/m2, as averaged across the prime residential areas. Rents can range from $9 – $14 p/m2 per month, depending on location and quality.

Villas are generally more expensive than flats, at around $3,500 to $4,500 p/m2. Rental prices for villas typically range from as low as around $6p/m2 to $27p/m2.

Low-to-middle range apartment developments, targeting the local market, average $200 to $500 a month rental per unit in the central areas of Phnom Penh City.

The high-end, serviced and luxury condo market is priced considerably higher than this – but these prices vary greatly across developments depending on scale, location and quality.

Beoung Keng Kang, Chamkarmon, represents the highest priced district in Phnom Penh with price for land reaching 6000p/m2 in some parts. Previously, home villas were a popular option for families wishing to live in Chamkarmon generally, however, many of these villas have now either been demolished and the land sold for development, or converted into boutique hotels or restaurants. High-end condo developments and hotels are changing the area dramatically at present. However, growing congestion and a lack of parking in and around the city center is increasingly causing problems for inner-city Phnom Penh residents.

Other upcoming Phnom Penh residential property areas include the west and south of the city generally. The peninsular of Chroy Changvar is also seeing huge development from foreign and local developers, and here height restrictions on new buildings are largely unlimited. These locations are very close to central Phnom Penh yet land prices remain considerably lower.

Presently, prime and mid-level office space across Phnom Penh is rising dramatically, with a variety of new high-rise projects beginning to be released into the market, or slated for completion in the coming years. These new office complexes are often coming at the cost of knocking down villas, flats and other older real estate. Grade B and C are proving most popular, as Grade A office space is beyond the budget of most local firms. Phnom Penh commercial property options are only set to boom in the upcoming future, especially with the rise of ASEAN and the AEC.

Another trend is in regards to the advent of high quality shopping centers and malls.

Cambodia’s first international shopping mall opened its doors in June 2014: Aeon Mall. Aeon has since seen high demand for store space from both international and local retailers. A new breed of international franchisers who have for many years ignored the Cambodian market and refused to enter it, see the attractiveness of occupying slots in complexes such as Aeon Mall as it reflects international standards of retail space and retail space management. The new mall has convinced some of these franchisers that opportunities exist and that there are viable spaces for them to locate their brand.

Parkson Mall on Russian Boulevard is the next of its kind to open in Phnom Penh, and is currently under construction. Aeon 2 is also in the pipeline. TK Avenue is another well known, well-established and modern shopping plaza and cinema complex, located in Toul Kork.

The condominium market in Phnom Penh continues to expand, with early investors in centrally located developments enjoying appreciation of up to 30% from off-plan purchases. High-end condominium development looks set to continue in prime residential locations, with developers also looking to offer luxury projects outside of traditional residential districts.

While the condo market was originally dominated by foreign investors, Khmer buyers are beginning to demand condos, predominantly for investment purposes and rental returns. This has led to a trend of local developers offering lower-range condo development projects to the market, and these types of developments range of $30-60,000 per unit off-plan and are being bought primarily by local buyers.

Domestic demand is a key element of a successful condominium project for any developer in Cambodia, due to foreign ownership of an individual building (strata law) being restricted by law to 70%.

Another trend we will see more of in 2016 are mixed-development complexes, including condo, office space and retail. Tykoonre.com suggests that the reason for this is that developers are aware of a potential oversupply in the pure-condo market in 2018-19 and are thus hedging their bets with mixed development offerings.

Increasing investment from Singaporean, Japanese, Korean, Taiwanese, Hong Kong and Chinese residents continues to grow in Cambodia, and the comparatively high yield guaranteed by many developers is still attracting overseas purchasers who see positive chances for appreciation in Cambodian developments compared to their slowing home markets.

Thus far developers in Cambodia have focused on the high-end market, and to some extend the upper middle class, as these two markets represent the lowest hanging fruit.

Still, suggests tykoonre.com, a massive demand exists for quality, affordable housing development in Cambodia suited to the needs of the lower-middle class and lowest income earners, especially in expanding urban centers. Without any proposed government intervention in the market for this demand, this appears to offer a great opportunity to developers able to cater to this large demographic.

Check out some other great resources on tykoonre.com in our Location Profiles and Investor Guides: Learn more about Phnom Penh…

Sihanoukville Rising:

As property prices in Phnom Penh continue to push upwards, many investors are quickly being priced out of these first-tier markets, as are many developers seeking land for their next project. Sihanoukville in particular stands out as an exciting investment destination worth serious consideration.

Home to the Kingdom’s only deep-water port, Sihanoukville is the capital of the province of the same name and is home to a fast-growing population of approximately 300,000.

Many of Sihanoukville’s residents are there for the port or its associated export-focused manufacturing. The city is Cambodia’s second-largest manufacturing base after Phnom Penh, with most of its output consisting of garments and shoes.

The government plans to transform this area into an entire Special Economic Zone (SEZ) and is currently dredging the port to support larger freight vessels. Large reserves of oil off the coast of Sihanoukville have also been prospected, and plans are being made for its extraction in the coming years.

In 2015, the average percentage of growth year-on-year was around 15-25 percent for land located in the city center of Sihanoukville, according to tykoonre.com research.

But along the seaside road and main commercial roads, prices have rose dramatically in recent years – in some places between 40-50 percent compared to prices 2013-14.

Sihanoukville offers opportunities for cheap land to be developed into resorts, offices, guest houses, hotels or apartments. As investment capital continues to flow into the region, in particular from the Chinese, the region is also seeing the beginning of a high-end condominium market, with various grand scale projects already underway.

Check out some other great resources on tykoonre.com in our Location Profiles and Investor Guides: Learn more about Sihanoukville.

What is the state of the condo market?

It is no accident when foreign investors enter Cambodia and spend millions on high-rise condo projects. Why do foreign investors invest in Cambodian condos? The answer relates to political stability, strong economic growth, and the free use of the US dollar.

The Cambodian economy has increased so fast since the civil war’s end, and relative stability has been achieved in only two decades. Cambodia maintained a 7 percentage GDP increase every year since, which makes it the sixth fastest growing economy in the world.

CEO of Eastland HK Development, Sam Yang, who has been building Cambodian condos and high office buildings in Phnom Penh, said that his latest project, East Commercial Center (ECC), will finish at the end of 2017. This building is 38 floors on Norodom Boulevard – with small, adjustable office spaces for sale and rent, with reason prices and a good location.

He went on to say, “I think that 2018 will be ok. There isn’t any market which is unaffected by politics. You have to remember that Myanmar and Thailand will also have elections, and it will be the same type of situation we predict in Cambodia”.

He added that there three main points in this market which make it very attractive. Firstly, we are sure that the next major international economic boom will occur in an ASEAN country. Secondly, Cambodia is the third country in ASEAN to have achieved relative political stability. Thirdly, investors can rely of the US dollar in Cambodia, and this is very attractive.” Yang also sees Chinese investment continuing to increase in the next few years, citing plans for a regional Chinese railway in the coming years.

He added that thus far the Cambodian real estate market has only attracted relatively small investment pools, in comparison to international standards of major investments. Generally, new real estate investments in Cambodia are valued at around 5 to 10 million dollars only. The larger real estate investment funds of 200 to 600 million dollars have not yet come to Cambodia – but they will soon.

“The Cambodian condos market will continue to improve and Chinese investors plan to construct more roads and railway lines in 2018 to link the Asian markets together.” Mr. Sam Yang asserted, “Even though the investment in Cambodia is growing fast, we should still think about the correct supply while this country is developing. This is why ECC is focusing on affordable office space.”

The director of JS Land Limited, Koy Lesan, said that even though there are many condo projects being built recently, some of condos don’t respond to needs of customers and are too expensive. Prices per unit of around 80 to 100 thousand hundred dollars do not reflect Cambodian incomes. He went on to say that the needs for more housing for locals and foreigners are increasing, but most condo projects are still overpriced.

This understanding has inspired JS Land’s new project. The Cambodian condos project is 19 storeys high and has 212 units. Each unit is priced at just $38,000. The important thing is that it will be easy for the customers to cooperate with Maybank, who has offered financing for the project. They can install payments on long terms from 20 to 25 years, allowing buyers to manage their investment alongside a low average income across the population.

General Director of Century 21, Kevin Goos, said that the Kingdom is the most attractive market among Asean countries. The biggest real estate markets of Singapore, Hong Kong, and Taiwan are decreasing in investment by around thirty percent. Hence, we can expect increased investment in Cambodia in the next 2 years.

He went on to say that the real estate market in Phnom Penh has affordable prices, if we compare to other countries in Asean. Cambodia is still growing fast across economic sectors, as it has been since 2001.

If we compare the real estate market in Cambodia, it is the same as other countries such as Singapore, Taipei and Hong Kong during decades of the 1980s and 90s. He went on to say that Cambodia granted a good opportunity for business expansion and the stand of the government on Foreign Direct Investment (FDI) is very attractive if we compare to other Asean member state policies. He added that the creation of the new construction law and development in the country generally, will open the door for investors to invest more heavily in real estate, and aids foreigners buying condos with greater transparency and consistency.

The director of Khmer Real Estate, Mr. Kim Heang, said that the real estate development in Cambodia is showing great potential as the Cambodian economic sector is rising by around 8 percent per year for the last 20 years. Cambodia in becoming an increasingly attractive place for investors because Cambodia today has better infrastructure, low labor prices, and 70 percent of people are under 35 years old. These factors are the most encouraging for investors, believes Heang.

He went on to say that the growth of the construction sector is demanding more responsibility and respect, as it is becoming a crucial industry for the nation’s growth and people’s’ wealth.

“Now Cambodian valuers and agents are also rising in their abilities and professionalism in order to prepare for the Asean economic community integration” he said. “Cambodia is one the leaders in economic growth within Asean, and we will step forward into the future as a strong market”.

General Director of Century 21 Mekong, Chrek Soknim, said that he is optimism about the growth of real estate in Cambodia. “This should continue to grow sustainably until 2018 because the sector faces no impediments.”

He claimed that there are three factors currently supporting the growth of the real estate market sector. First of all, good political stability is important to attract more investors. Secondly, the Asean integration at the end of this year will mean more commerce and cultural exchanges between Asean states, naturally supporting demand for accommodation, investment properties and office space. Thirdly, the increase in quality and variety of available real estate will allow investors more choice when they buy real estate in Cambodia. And Forth, the royal government of Cambodia will soon be able to grant loans to its citizenry on long repayment terms of 20 years and higher, meaning more people will have credit to buy their own homes. When the majority of people are able to buy a house, then the construction and real estate sector can only grow.

“Even though new development projects face some obstacles in the coming years, if they choose the right location, and build to the right quality standards, these problems will be limited,” he added. He mentions that the economic growth rates of 7 to 7.5 percent are ideal for business growth, and will also support the real estate market development industry.



Check out some other great resources on tykoonre.com in our Location Profiles and Investor Guides: Learn more about Cambodia, Phnom Penh, Siem Reap & Sihanoukville. Learn more about Investing in Cambodia, Foreign Ownership in Cambodia & the Cambodian Expat Experience!

4) The Cambodian Construction Sector:

The construction sector has become the most dynamic engine of growth, partly due to the return of political stability and a revival in consumption, according to a recent report by the World Bank.

Economic growth here is still led by construction, garment exports and tourism, the World Bank said in its report “World Bank East Asia and Pacific Economic Update – Staying the Course.”

Construction investment increased nearly 3 billion US Dollar in the first 11 months 2015 if compared with the same period last year, according to the data from the Ministry of Land Management, Urban Planning, and Construction.

According to Im Chhunlim, senior minister of the Ministry of Land Management, Urban Planning, and Construction, said construction investment capital reached about 2.9 billion US Dollars in the first 11 months in 2015 if compared with the same period last year, increased 27 per cent.

A group of local real estate expert said the construction sector helps invigorate the economy as well as GDP growth. Kim Heang, CEO of Khmer Real Estate and president of Cambodian Valuers and Estate Agents Association (CVEA), said the construction sector took the biggest part in Cambodia’s GDP because most wealthy people gain benefit from the land and construction.

He warned, “We don’t have to concentrate only on the construction sector because the prices can increase or decline depending on the situation as there are many sectors we have to focus on such as tourism, agriculture, as well as garment.”

“People’s income does not meet the current residential, and number of tenants saw an increase, so the government must take action to make middle income people to be able to afford housing,” he said.

In order to become a developed country with strong GDP, we have to depend on human resource. It is a long-term investment and the education system has to be improved,” Mr. Heang said.

Chrek Soknim, CEO of Century21 Mekong, stressed the vital role of the construction sector in the Cambodian economy. “The economy talks about money. Currently as we can see, construction sector in Cambodia injected a lot of money into the economy. That’s the reason the construction sector took a big part in the GDP growth,” Mr. Soknim said.

However, he said, “even though the Cambodia property sector is younger if compared with other countries, the Kingdom gains advantages from the sector.” “With people’s stable income bank sector in Cambodia also plays a vital role in boosting the property sector, and cash flow can help the economy,” he added.

“To make the construction sector consistency, the government has to take care of investors by issuing laws to projects both investors and buyers,” Mr. Soknim said.

In Sitha, vice-president of World Trust Estate, said currently there have been many construction sites popping up in Phnom Penh, and this creates many jobs for people as well as experts in the sector: “It means workers and experts in the construction sector earn more income from the construction, and many constructions boost the GDP growth and according to the current data from the Ministry of Land Management, Urban Planning and Construction, the construction saw an increase, and this means it took a part in the GDP as well,” Mr. Sitha said.

“Bank sector plays an important role in providing loan for people to have enough ability to afford home as many middle-income people use the loan to buy their own home,” he added.

Return On Investment of condo investment in Cambodia is around 7.5 per year if compared to the same Asian markets, Cambodia’s investment provide more benefit as Thailand and Japan at 6.3 and 5.5 per cent respectively, China and Hong Kong are offering rent yields of only 2.7 and 3.3 per cent respectively, and Philippine at 7.1 per cent annually, according to a recent study of Century 21 Mekong.

According to a report of real estate agency Century21 condominium development increased by 20 per cent annually from 2008 to 2014 with 13 projects successfully completed, which translates to 3,090 available units as of today.

With another 17 projects currently underway, the report predicted that by 2018, when many of the current projects are slated for completion, the number will have more than tripled to over 10,000 available units across Phnom Penh.

Cambodia’s per capita GDP is forecast to reach $1,220 this year, up from $1,123 last year, according to official data. This places the country near lower-middle income status. Its new forecast comes just a few weeks after the Asian Development Bank revised its March forecast for economic growth this year from 7.3 per cent to 7 percent.

The construction sector has become the most dynamic engine of growth, partly due to the return of political stability and a revival in consumption; however, the tourism sector is underperforming, despite the initial recovery in tourist arrivals to Thailand.

Tourist arrivals during the first six months grew by only 4.6 percent (reaching 2.3 million visitors), compared to 6.9 percent during the same period last year, the report from the World Bank said.

Check out some other great resources on tykoonre.com in our Location Profiles and Investor Guides: Learn more about Cambodia, Phnom Penh, Siem Reap & Sihanoukville. Learn more about Investing in Cambodia, Foreign Ownership in Cambodia & the Cambodian Expat Experience!

5) 2016 Cambodian Real Estate Market Predictions:

Tykoonre.com spoke to the leaders of the Cambodian real estate market to find out what type of trends we are likely to witness in the property market in 2016.

Sunny Soo, managing director of Keystone, Savills Cambodian associate:

“For the last 6 months, the speed of apartment transactions have softened significantly in Cambodia, especially those projects heavily targeting foreign buyers – and one would only assume this trend to continue into 2016, especially when the volatility of regional economies continue to be a challenge and the Cambodian economy as a whole moves slower than the real estate market boom, the market will eventually face adjustment. The coming election in 2018 may also prompt some developers to start considering holding onto their development plan for now, unless 2016 proves to be a good year for transaction. Nevertheless, it seems that landed developments as well as projects targeting locals will continue to see higher demand as the middle income group continues to grow bigger. All in all, there are still good opportunities for real estate developments in middle-end offices and hotels. The Cambodian market will continue to remain significant for investment consideration among the countries in this region in 2016.”

Simon Griffiths, associate director at CBRE Cambodia:

“For 2016, confidence in the Phnom Penh real estate market, with particular reference to the condominium market, will be low within Cambodia with commenters stating oversupply and too-rapid growth causing oversaturation, ultimate leading to exposure to risk.

Interestingly, this sentiment will not be reflected outside of Cambodia, in particular relating to Taiwan and China where inbound investment is expected to grow from consumers and developers alike. However, Singaporean investment is likely to cool.

Developers who have not launched schemes pre-2016 are likely to continue to progress with development plans but unlikely to consider exclusively condo developments. Mixed-use schemes, as well as freehold strata title office and retail space, are likely to become more popular as the potential returns in these sectors are realized both locally and internationally.”

June Zeng, investment adviser at Da Yu Real Estate:

“In my opinion, 2016 will be a rather different year for property developers and real estate agents alike. The major fact everyone has to face is that gone are the days when anyone who had a piece of land in town could make a fortune simply by building something on it. The age of professionals has come, which consequently means Adios to the amateurs.

In the city of Phnom Penh, market performance will strictly favor the few projects that score high in two aspects: excellent product and professional marketing. Anything short of either, I’m afraid, is very likely to bring about disappointment.

The immediate question Phnom Penh is soon to face within this year is not whether or not there are too many condo units in the market, but why there aren’t enough small-sized and affordable units for the young middle class and expats.

So, 2016 is the year for many to re-examine demand, which isn’t a bad thing at all as that’s how a market learns to mature. Despite Phnom Penh’s new challenge, the nearly uncharted waters of other provinces are still fresh. 2016 is also the year we might hear major success stories from other fast-growing cities – Sihanoukville, to name the most potential one.”

VA Vireak, chairman of Century 21 Fortune Investment:

“Cambodia’s property market in 2016 is very challenging and it’s very hard to predict about its future for this year and beyond.

On one side, there are some challenges with increased supply (houses, condos, apartments, offices, …), and the possibility of global economy impacts (mainly from China and the region), the interest rate and bank loan policy (which may be changed), the exchange rate from US Dollars to other currencies (the strong US Dollar), etc.

On the other side, Cambodia’s economy can maintain the growth of around 6.9% till 2018, the population growth rate in the urban areas as well, and the AEC (ASEAN Economic Community) integration.

Economic growth means more income to the country and to the people as well, therefore the GDP per capita will be increase, so people can have more money to buy the property – of course if there is not too much inflation. Population growth in the city triggers the demand for the housing, as most developments are based in cities only. The AEC integration will bring more skilled workers and specialist, so this new labor pool can help to boost the demand, especially for the condo, apartment and office space.

All these factors can help to balance on the real estate market.”

Van Chanthorn (John), managing director of TownCity Real Estate:

“The property market in Cambodia will be better than in the previous years for the following reasons.

The ASEAN Integration will bring more expatriates to Cambodia. When expatriates come, whether tourists, investors, employees, students, workers or interns, the first thing that they need is accommodation, a place for business, an office, or hotel for a temporary stay. So when they come, it is not only a direct benefit to Cambodia but indirect as well. Cambodians can earn more money and will have the purchasing power to buy other products. When this happens, finally the locals will have enough money to invest in property.

Cambodian Returnees who have stayed abroad for a long time have now graduated in their adopted countries and look to Cambodia with new, innovative ways of doing business. When the new businesses enter the market, the properties and offices are their first requirement. These returnees and expats will also seek a higher standard of living, meaning condo demand should pick up also.

Bank policy is also changing, and this will boost the lower income real estate market. For the previous 5 years, the banking sector has increased year by year, and still more banks will come. As more competitors come, the policies of the banks are becoming more and more accommodating to Cambodian investors and young couples seeking their first home loan. More appropriate loan policies will drive up demand for low to middle range flats and villas across the market.

Government Policy to encourage international and local Investors will also develop in 2016. When the government implements new policies to encourage the private sector, more businesses will come – and when businesses come, people have jobs, better salaries and a higher standard of living. Thus, there will be greater demand for property investment and homes for stay as well. In particular, the real estate sector is monitoring the government’s plans to expand the city, and develop infrastructure in suburban areas.”

Sharon Liew, ceo of Huttons CPL:

“2016 will be a very challenging year for the property market in Cambodia. With owners and investors spoilt for choices for condominium and the country’s upcoming elections, buyers are getting more cautious on their purchase. Personally, I feel this is a better start as cautiousness leads to more informed buyers, and this also helps to prevent the exploitation of over-promising developers. The market has upgraded more to commercial properties as is the current trend, and this is another challenge for local buyers needing to absorb the commercial investment value which is rather new in this market. Overall, through experience, I always believe that “Prime property will hold its value” and “the Early & well-informed bird always catches the worm”.”

Chee Yap, project director at Grand Phnom Penh International City:

“Currently, there are so many unknown factors within the country, and both regional and global issues.

First of all, I suggest the “actual” absorption and digestion of exponential land price growth in 2015 will be something very interesting to watch in 2016.

Meanwhile, various factors will exert pressures on the local real estate market, in uncertain ways: such as minimum wages rising to USD 160 per month; local undercurrent political issues; Cambodians adjusting to improving regulations ( i.e. Traffic Law, Tax Law, Forestry Law etc.); the dropping of oil prices below USD 30 per barrel; the appreciation of the USD currency against other major currencies in 2016; and the regional influence of a booming Jakarta and increasing demand in other major regional centers.

With these things on the horizon, be prudent and conservative for 2016.

Last but not least, Grand Phnom Penh’s Fantastic Water World Waterpark will be completed in mid-February this year and will be the talk of the town during Khmer New Year.”

Ross Wheble, country manager of Knight Frank Cambodia:

“With signs of softening in certain sectors, some developers are diversifying. Whilst the supply of retail and office space will approximately double by 2018, the supply of condominiums will increase by more than six-fold. This has led to a recent slowdown in sales rates of condominiums and developers are looking at alternative asset types to appeal to investors.

TC Royal Asset Manor was one of the pioneers in this area with the launch of stratified office units in their TK Royal One development. This has been followed by a raft of new stratified office developments as developers seek to diversify away from the condominium sector and we expect this trend to continue into 2016.

Equally, with more funds being allocated to infrastructure improvements, we are seeing increasing investment in the industrial sector as multinational companies assess the benefits of setting up operation in Cambodia, particularly along the border with Thailand.

We also expect to see growing demand for agricultural land as foreign companies seek to take advantage of a more mechanized approach to farming, providing higher crop yields and better returns than the more traditional methods currently used in Cambodia.”

Alex Evengroen, general manager of Khmer Real Estate:

“My forecast for the property market in 2016 is that there will be a large shift from buying properties to investing in land.

Cambodia became part of ASEAN and this means that the country will be flooded with highly skilled and hungry Real Estate professionals and investors with a lot of inside knowledge.

The M2 price keeps going up and so it is inevitable that at one point people start to look at other and more creative options….This is in my opinion land. There will also be a change in demographics regarding the land market. More will look for (low priced) land in the other provinces like Kep, Kampot, Sihanoukville and others closer to the borders.

One of the issues I expect is the oversupply of mostly condominiums which will at a certain point lower the prices and will have an effect on the investments people make to buy these properties. If this is not well monitored and guided many people could get into financial difficulties.

One very important positive change that I see will be the unification of the official Real Estate companies under the scepter of the CVEA. This will result in a better understanding and sharing of upcoming and expected changes and needs within the Real Estate industry, and will also eventually eliminate the people who do Real Estate on the side without the proper papers or required knowledge.

We do have to understand that we have to work hard and smart to keep going in the right direction, the direction that will benefit the people of Cambodia and safeguard their investments in the industry. This also means that it is important to keep communicating frequently and act on decisions made to reach the required upgrades.”

David Kim, CEO at Informax Property:

“The core sector of new developments will shift from pure residential toward mixed commercial and residential developments in 2016, a trend we are already beginning to see.

Due to new residential shifts during 2014 and 2015 to the suburbs of Phnom Penh, these areas now need commercial facilities such as shopping centers, hospitals, offices and schools.

Expect to see a rush from mainland China. While Singaporean and Taiwanese developers were the main developers for 2015, now mainland Chinese developers with large capital are starting to launch projects in Cambodia. When they start promoting these projects in China, more and more Chinese investors will consider investments in Cambodia.

Industrial development along the borders of Cambodia will enjoy the benefits of the AEC. Cambodia has a good business environment for regional expansions such as low tax, low labor cost, freehold property, and prime logistical connectivity to other member countries of the AEC. When the AEC goes through, the biggest handicap of Cambodia – namely its small domestic market – will not be handicap anymore.

These 3 issues will be main things to watch in Cambodia’s real estate market in 2016.”

Kim Heang, president of the CVEA:

“I name the Year 2016 as “the Year of Condo Construction” as you can see the construction of Condos across the City, especially in Khan Chamkarmon, Daun Penh, 7 Makara and Khan Toul Kork.

There will be around 18 000 to 20 000 Units of Condo by 2018, this amount is too much for the local market but it is still a small amount for the ASEAN Market. Developers need to find out their own market or create their own market for their product. Also, the Cambodian Government needs to attract more investors to help the Condo industry.

The land price has increased too much in 2013, 2014 and 2015 – so the price in 2016 will not increase too much. It should be just 5 to 10% for land in down town, and still around 20% for land outside the city.

Boreys for the Middle Class and High End clientele have reached their limits, so it is better for the developers to focus on the lower income and new family markets, especially for the flat house at around 30 to 45K – instead of flat houses at 80 to 100K for the middle class, or 200 to 300K for the high end client.

Warehouses need to be moved from downtown as the price keeps increasing for their land. The savvy warehouse owner needs to sell their land for big money and shift their business elsewhere!

Serviced Apartments in prime locations such as BKK1 and nearby areas are doing good business. However, lower standard apartments will disappear and be replaced by higher end apartments.

There will be investors coming to buy factories in Cambodia as we have great advantages for industry. In particular, no tax to the EU, USA and other Asian countries, and low labor costs. However, there are too many demonstrations in the industrial industries recently – thus, the Government needs to take the action and find a solution to the issues of workers.”

Desmond Yap, general manager of Yong Yap Properties:

“Cambodia will continue to be an investment hotspot – especially with its continual integration into ASEAN and the government enforcing laws to ensure a cleaner business environment.”

Want to learn more: Check out heaps of up to date news and info about investing in Cambodia, on tykoonre.com today!

Check out some other great resources on tykoonre.com in our Location Profiles and Investor Guides: Learn more about Cambodia, Phnom Penh, Siem Reap & Sihanoukville. Learn more about Investing in Cambodia, Foreign Ownership in Cambodia & the Cambodian Expat Experience!
6) Economic Outlook:

GDP growth is increasing consistently with a continuing improvement in consumption and investment.

A robust 7 percent year-on-year consistent economic growth rate has made Cambodia an attractive country for potential investors.

According to the World Bank, lower world oil prices and buoyant business confidence have driven continued strong consumption, assisted by rapid consumption credit growth (averaging around 30 percent growth for the past 5 years); which has led to an expansion in wholesale and retail businesses.

Robust gross fixed capital formation growth, at 9.1 percent year-on-year in 2014, has been driven largely by durable equipment and construction. Inflation eased further to 0.8 percent in the second half of 2015 following a sharp decline in 2014 with a rate of 1.2 percent – this was despite strong domestic demand which reflected moderated food and oil prices.

Within this context, the construction and real estate sector has become the most vigorous engine of economic growth within the Cambodian economy. Regional anticipation of Cambodia’s integration into the ASEAN Economic Community (AEC) has bolstered business confidence and continues to fuel a booming construction and real estate industry.

The fast expansion of the banking and finance sector combined with continued broad money growth contributed to ongoing economic growth in the Cambodian economy. Swift and broad money growth continued its rate of 20.6 percent year-on-year by mid-2015, which has been primarily driven by foreign currency deposits.

Private sector deposits also remained healthy at a growth rate of 21.1 percent year-on-year, supporting high private sector credit growth.

Cambodia’s reliance on dollarization continues to impact economic performance. The National Bank of Cambodia (NBC) has been working hard on developing stronger supervision and monitoring policies for the banking and finance sector in order to maintain financial stability and help maintain the growth of the economy.

With growing US dollar appreciation, market competitiveness is experiencing some erosion leading to growth restraint in the garment and tourism sectors which have traditionally been the main economic drivers of the nation. The appreciation of the US dollar, the rise of low wage regional competitors like Myanmar, and uncertainty surrounding ongoing wage negotiations, especially within the garment sector, are stifling external competitiveness.

Thus garment exports have eased slightly to a year-on-year growth rate of 7.8 percent in value terms in the first half of 2015, compared with 9.2 percent the year before. The tourism sector has seen a decline with arrivals during the first half of 2015; decelerating to 4.6 percent year-on-year (reaching 2.3 million visitors), compared with 6.9 percent in 2014.

Foreign direct investment (FDI) continues to remain healthy and is largely responsible for financing the kingdom’s current account deficit. Flowing FDI has contributed to increases in gross international reserves, which reached USD 5.2 billion by mid-2015. Investment from major economies such as China, Taiwan, Korea, Thailand, Singapore, Vietnam and others, continues to inject foreign capital.

Preempting future downside risks, the Royal Government of Cambodia launched late last year their new Industrial Development Policy (IDP) (2015-2025). This framework aims to strengthen competitiveness through adaptability, encourage economic diversification, productivity and inclusive growth. The IDP seeks to tackle the countries over reliance on traditional sectors and low skilled/low value jobs by diversifying industrial activities.

Cambodia remains a very open free market economy with liberal trade and investment policies thus making it full of opportunities for investors.

Tykoonre.com suggests that Cambodia is attractive destination for FDI due to the availability of low-priced labor, fast urbanization, an growing middle-class, easy, free and open policies for foreign businesses, English language as the main business language, appealing tax incentives and import/export duty exemptions, continually improving infrastructure and logistical networks, and the predominance of the US dollar.[/togglebody]
[togglehead id=”ss” tab_id=”ss1″]Living in Cambodia[/togglehead]
[togglebody tab_id=”ss1″]Want to start living in Cambodia? You should. Over 80,000 expats have already moved to the Kingdom and life is good! Realestate.com.kh has put together a guide for those considering joining us here in sunny Cambodia…

1) Real Expat Reviews:

Firstly, let’s see what some expats currently living here in Phnom Penh have to say:

Daniel Santantoniou, an Insurance Broker originally from Geneva, Switzerland, who has lived in Cambodia for 20 months, says that “the best thing about living in Cambodia is the cost of living, business opportunities, overall growth in all sectors, proximity to the beach and the influence of Buddhist culture.” Daniel lives in a one bedroom apartment, local Khmer style, with a view of Royal Palace and the National Museum. This costs just 430$/month, including water and cleaning once a week, which Daniel says is “good value for money given the location and view. However, we found serviced apartments way overpriced in Phnom Penh compared to Bangkok.”

Alexander Evengroen, a Netherland’s native and a business developer and motivational speaker by trade, has lived and worked all over the world, including China, Singapore, Thailand, Ghana, Malawi, and now Cambodia… “I have stayed in beautiful Cambodia for around 5 years. The best thing about living here is my beautiful Cambodian wife,” says Alex. In terms of advice for new expat residences, Alex says that, “someone moving to Phnom Penh soon needs to be open-minded and go further than the tourist attractions. Dare to explore more provinces and meet the fantastic people of Cambodia. The amazing food, the culture and so much more. Meet other expats to share experiences and join events to learn from each other – but don’t only hang around them! See and feel the beauty of this great country.” Alex lives in a beautiful spacious 5 bedroom, 5 bathroom villa home with “all the needs and facilities you can dream of – Seldom do we get power cuts, and fully air-conditioned – in the Attwood area of Phnom Penh.”

Filipino native Carmela Torres, a real estate marketer by day, band vocalist by night, has resided in Phnom Penh for 1 year and 3 months. She says, “The best thing about living in Cambodia is the affordable yet high quality of life (cheap cost of living). Also, the unique freedom to start a business and not get killed with taxes.” “My advice for an expat moving here,” says Carmela, “would be shop around to find the best deals on property and to always try to barter the price. Do not be overly anxious about safety and security when moving in Phnom Penh, and when it comes to healthcare I think the medical care facilities here have greatly improved, and many ailments can now be treated in Phnom Penh by foreign doctors and foreign-trained Cambodian doctors. Dental care is also professional and affordable. But have medical insurance in your home country in case of the worst! Finally, beware the heat!” Carmela lives in a stand-alone apartment in the BKK1 area, which she says is “definitely good value for money: Centrally located, easy access and very close to everything.”

Haley Flack, a student instructor from London, has lived in Cambodia almost fourteen years. Haley comments that, “I enjoy my job and the easy going lifestyle of Phnom Penh. On weekends, the hardest thing is deciding where to eat – as there are so many great restaurants, and which gigs to go to. We are generally spoilt for choice. A piece of advice I would give is to stay calm and do not lose your temper. A smile will go a long way even when you get frustrated, which will happen.” In regards to where you should live, Haley explains that, “I have lived in the same apartment for nearly ten years. The rent is very good and the landlord is very hands off, apart from when we need help. We live behind the University of Fine Arts. It is very good value for money. However, one thing I will say is the apartment next door and many others in our area lie empty. Why? Because the rent is more than double than ours. I don’t understand why the landlords keep the rent high and therefore the apartments empty. I have had friends look at them and try to haggle the price, but they won’t budge.”

Adolfo Perez-Gascon, a Spaniard who has lived in Cambodia for 2 years already working as a journalist, thinks that, “the best thing about living in Phnom Penh is the fact that you have access to a big and vibrant community of expats, while also having the opportunity to interact with a very friendly and open local population. Living in Phnom Penh, you’ll find that you have access to almost all western commodities and activities that you enjoy back home, but you are still in a foreign and exciting country; a country that you’ll feel compel to explore and learn more about. In this regard, Phnom Penh strikes an almost perfect balance.” Adolfo notes that, “a lot of people move to Phnom Penh without a plan; they don’t really know what they want to do here, and, of course, do not have a job waiting for them. They are lured to the country by lax visa requirements and the prospects of an easy life. My advice to any person planning the move to Cambodia is to come here with a job. Do your research, find an employer that you’ll like to work for, and don’t board that plane until you are sure of what you are going to be doing. Having a concrete plan of action will help you enjoy your experience in the Kingdom a lot more. Starting work right away will help you integrate into the community. I shared an apartment (with 2 other people) on the second floor of a traditional Khmer building located in the vicinity of the Genocide Museum. Rent is extremely cheap (we pay 400$/month for the whole apartment). Compared to my home country, this is an amazing deal. Put bluntly, you’ll never find such cheap accommodation in Spain. The apartment is nice, spacious and comfortable. We have all the amenities that you’d expect of a modern house, including Wi-Fi and aircon.”
2) A Little History That Ex-Pats Should Know:

Cambodia has a rich history going back at least five thousand years. However, it was an experiencing a Dark Age from the 1400s until 1863. This Dark Age ended when the French came in and established a protectorate. Over time, this situation changed and Cambodia became a French colony.

In the early 1940s, events that occurred during World War II weakened the French Colonial Empire. In 1953, Cambodia established itself again as an independent kingdom. Thus, from the 1940s through the 1960s, development in Cambodia was comparable to what was occurring in Vietnam and Thailand at the time.

Unfortunately, the war in neighboring Vietnam negatively impacted Cambodia, resulting in sections of Cambodia being bombed by various parties, including the USA. This helped bring a group to power known as the Khmer Rouge. Most likely, you have heard the term “Khmer Rouge” and are aware that it has negative associations. They came to power in Cambodia in the 1970s, and, during their relatively short reign of terror, killed approximately a third of the country’s population.

These events affected everyone in the nation and still do. But this era was particularly hard on educated professionals, such as doctors, lawyers, and teachers. They were targeted first. Although these events are history, they are not yet resolved. The country is still struggling to heal its wounds from these events.

The trials of the Khmer Rouge leaders for their atrocities started relatively recently and are still ongoing in The Extraordinary Chambers in the Courts of Cambodia (ECCC) located outside Phnom Penh. Additionally, the country developed the Tuol Sleng Genocide Museum and Choeung Ek Killing Fields in Phnom Penh. These are tourist sites aimed at educating the world, as well as a form of national therapy, helping the country to come to terms with these recent events.

Check out some other great resources on tykoonre.com in our Location Profiles and Investor Guides: Learn more about Cambodia, Phnom Penh, Siem Reap & Sihanoukville. Learn more about Investing in Cambodia, Foreign Ownership in Cambodia & the Cambodian Expat Experience!

3) History and the Ex-Pat Community:

Modern Cambodia was established in 1993. Thus, it is a relatively young nation, yet it has a long and rich history. The recent events detailed above have some of the following impacts on the ex-pat community today:

1) The tremendous recent loss of so many educated people is the primary reason that Cambodia has such a thriving ex-pat community. The country needs far more educated, skilled professionals to fill vital roles than it can supply internally. So, if you are an ex-pat living in Cambodia, you have been welcomed here to help with the recovery process that the country is still undergoing.

2) If you want to fit in and be comfortable in your interactions, it helps to understand the culture a bit. One of the take-aways from this short history lesson is that there is a significant French influence in Cambodia due to the years that it was a French colony. Another is that Cambodia is right now undergoing a process not unlike The Nuremburg Trials from some years ago, when European leaders were similarly tried for war crimes from World War II.

3) The country still has a lot of landmines and other visible scars from being embroiled in conflict for decades. It is wise to be mindful of potential danger in some parts of the country when you travel.

4) Phnom Penh for Expats:

As the capital and the largest city in the nation, Phnom Penh is a locus of the ex-pat community.

Not only are there a lot of jobs here that are well-suited to attracting ex-pats, it has development more comparable to that of many western nations. This gives ex-pats the chance to find their comfort zone, anywhere from largely recreating a life similar to what they had in their country of origin to living much like a local for an especially broadening personal experience.

The ongoing influx of foreign investment and foreign workers living here has brought with it western style businesses and amenities, plus international school amenities geared to the needs of ex-pat families. As with any big city, more development tends to lead to higher prices. However, going local can give you an exotic experience on the cheap, if you so desire it.

Western style luxury apartments with all the amenities and also serviced apartments — such as a pool, gym and security — can be had for $500-$3000 per month. Check out properties available NOW!

Alternately, more authentically Cambodian digs can be rented for less than $300 per month.

If your comfort zone involves organic, upscale food stores, you can find that for prices comparable to what you would pay at home. Or you can shop the local outdoor vendors (similar to western Farmer’s Markets) for substantially less, often about half price.

A western style coffee from a foreign chain can be had for around $3, while a cup of coffee from a local stall is typically well under $1. In fact, the first Cambodian Starbuck’s recently opened in the Phnom Penh International Airport. If you just must have a taste of home, it can be found there at typical Starbuck’s prices.

There is plenty to do and see within the capital, including fine dining, live music, movies and other entertainment venues. But, living in Phnom Penh also gives you easy access to the recently expanded international airport and bus services, making regional travel very do-able for the more adventure-minded types.

All of this means that an ex-pat living in Phnom Penh can live what would be a very upper class lifestyle in most large western cities, but on a relatively modest income.

A housekeeper can be hired for about $5 per visit, making it affordable to have one come once or twice per week.

A mid-price restaurant meal for two is approximately $15-20; about the same as or not much more than you would pay for fast food in many western cities.

Plus, simply being here means that when you take a day trip or a weekend jaunt, it is invariably to see things that many westerners would only dream of visiting if they were incredibly rich.

Check out some other great resources on tykoonre.com in our Location Profiles and Investor Guides: Learn more about Cambodia, Phnom Penh, Siem Reap & Sihanoukville. Learn more about Investing in Cambodia, Foreign Ownership in Cambodia & the Cambodian Expat Experience!

5) The Ex-Pat Work Scene:

Most ex-pats in Phnom Penh live on anywhere from $12,000 to $60,000 per year.

They are employed in NGOs, the hospitality and tourism sector, education, tech and business. Some are hired to come here. Others choose to simply show up and look for work.

Simply showing up is not as crazy as it might sound. Cambodian visas have some of the most lax rules in the entire world, and being here allows one to find jobs via word of mouth that won’t ever be advertised online. You can also check newspaper listings if you are here.

Some people start by looking at online job listings. The two most popular Cambodian job sites are Bong Thom Dot Com and HRinc.

6) How to Get a Visa:

There is a low bar to entry here. Many people get a standard E-class visa by simply showing up. Airports and border check points both allow you to get one by filling out very nominal paperwork and paying a few extra dollars above what a tourist visa costs. For about $300, you can extend it to a year.

However, in 2014, Cambodia passed a new law that requires foreign workers to have a government issued work book. This is really a responsibility of the employer, not the employee, and, so far, enforcement has not been stringent.

Check out some other great resources on tykoonre.com in our Location Profiles and Investor Guides: Learn more about Cambodia, Phnom Penh, Siem Reap & Sihanoukville. Learn more about Investing in Cambodia, Foreign Ownership in Cambodia & the Cambodian Expat Experience!

7) Currency:

It may surprise you to learn that US Dollars and Cambodian Riel are the predominant currencies here. In fact, most ATMs dispense US Dollars only (unless otherwise noted). With the exchange rate in the neighborhood of 4000 Riel to $1 US, it is typical for transactions to be made primarily in dollars, with “change” given in the form of Riel instead of US coins.

8) Popular Ex-Pat Neighborhoods:

A popular area for ex-pats is Boeung Keng Kang 1, 2 or 3. (Don’t worry: Everyone just abbreviates this as BKK 1, 2 or 3.) The Russian Market and the Riverside area also have many ex-pats. BKK 1 and 2 are more upscale, with more amenities geared specifically towards foreigners. BKK 3 and the Russian Market both offer an attractive mix of western and local shops. Learn more about these popular areas!

Search for your new home away from home now!

The Riverside area is popular with tourists and has a number of bars and nightclubs. It is, perhaps, less family friendly than the other neighborhoods, but a good place to go if you love the nightlife. More recently, Tuol Kork is a neighborhood about 30 minutes out that is increasingly attracting ex-pats. As with other large cities, commuting to a suburb outside the densely developed downtown area is a good way to find places renting for much less money. Learn more about expat rentals in Phnom Penh!

9) Housing:

In addition to the aforementioned luxury apartments and local style rentals, Phnom Penh also has French colonial architecture and western style homes tucked away on tree-lined streets. Single ex-pats who choose to share an apartment can find accommodations for as little as $150 per month. Those who choose to live on their own may pay up to $500 for an apartment, depending upon its size, location and amenities. Couples or families are typically looking at costs between $250 and $1000.

Should i opt for a long or short term lease in Cambodia? Here are some pros and cons.

If you go through a real estate agency to help you find a place, it shouldn’t cost you anything as they are typically getting paid by the landlords. They can help you understand what is available and what is in the lease. Just like you would in other countries, it is not uncommon to sign a lease for a set period of time, pay a security deposit and your first month’s rent prior to moving in. Here’s how to choose the right Cambodian real estate agent for you!

10) Utilities:

Although some landlords cover utilities for you, such as cable, water and trash, they typically charge you for electricity. The typical rate is around $0.25 USD/kilowatt. Read your contract before you sign. Some landlords may try to pad that. Make sure you understand your contract before you sign!

11) English is Common:

As with many countries, a lot of the locals speak English. This makes it easier to shop, dine and make friends than you might expect. Many shops and restaurants can assist you in English, even with local goods.

12) Petty Crime:

If you look like a well-heeled foreigner, you may find yourself the target of petty crime. This is pretty normal in less developed countries, but Phnom Penh is actually safer than Vietnam and Bangkok. Crime levels have gone up recently, but if you take reasonable precautions, this shouldn’t be particularly more concerning than in any big city. Bag snatching is a minor issue in downtown areas at night, especially for western women. This also occurs from the side of Tuk Tuks at night, perpetrated by thieves on motorbikes. To be sure, make sure you keep your bag on the inside of you at all times. Learn more about home and personal security in Cambodia.

Check out some other great resources on tykoonre.com in our Location Profiles and Investor Guides: Learn more about Cambodia, Phnom Penh, Siem Reap & Sihanoukville. Learn more about Investing in Cambodia, Foreign Ownership in Cambodia & the Cambodian Expat Experience!

13) The State of Medicine in Cambodia:

Perhaps you have heard that you should “Go to Thailand” if you need medical care while in Cambodia. It was not that long ago that this was the standard wisdom in the ex-pat community, but medical care has come a long way in recent years. Increasingly, Phnom Penh has first rate doctors available, whether foreign doctors who came here to practice or Cambodian doctors who were trained abroad. Dental care is also comparable to that in more developed nations, while costing far less.

None the less, some kinds of procedures may not be available locally. Thus, it is not uncommon for people to go elsewhere if they require certain things. Thailand is still popular, followed by Singapore and Malaysia. Bangkok is particularly popular for OB care.

However, even after you factor in travel expenses, you will find that medical care in this region will generally be less expensive than what you would pay in the USA. To give you a general idea of the price range: Visiting a local emergency clinic for stitches, plus two follow-up appointments, can cost less than $300.

Check out some other great resources on tykoonre.com in our Location Profiles and Investor Guides: Learn more about Phnom Penh.

14) Getting Groceries:

Ex-pats can shop at modern grocery stores for many of the same amenities they would find in a western country, often at prices that are not substantially different, though there are certainly some notable exceptions. For example, apples and are not native fruits here. Since they are imported, they may be surprisingly expensive compared to the prices in your country of origin.

However, many ex-pats enjoy checking out the numerous open air markets that dot the city. Similar to Farmer’s Markets, these are a great place to get great prices on locally grown produce. Bonus: You may get a chance to learn some of the local language (Khmer) and it puts you directly in touch with local culture in a low risk, comfortable manner. You do not have to be too adventurous to partake of this ex-pat experience, while collecting charming stories to tell back home someday.

Ex-pats may love the local outdoor markets with their fresh, surprisingly cheap in season produce, but for more perishable items, like meat and dairy, many ex-pats prefer to shop at stores geared towards western sensibilities. These are western style grocery stores with air conditioning and refrigeration for perishables. Unsurprisingly, they are more readily available in some of the same neighborhoods where ex-pats tend to concentrate, such as BKK 1 and 2 or the Russian Market.

You may especially enjoy the lingering French influence that is clearly present at such places. Their bakeries routinely carry croissants, baguettes and other authentic French style baked goods. Most ex-pats can find all their familiar favorites, just like back home. If you are feeling a bit homesick, you can just stock up on all of your “normal” foods and cook at home, giving some of the local eateries a rest for a bit. Then dip back into Cambodian culture again at will, whenever you feel like it.

15) Wine and Spirits:

If you are fond of good alcohol, it is surprising how readily available and affordable such things are in Cambodia. Many familiar brand names, such as Absolut Vodka, are readily available, usually for under $20. You can find wine shops and craft beers. There are bars and restaurants that will serve you cocktails. Happy Hour often means cocktails are half price. A can of local beer from a local shop is astonishingly cheap. You can also find experiences such as weekly rum tastings.

16) Local Transportation:

Within Phnom Penh, ex-pats and locals mostly travel by hiring tuk-tuk and “motos” (local slang for motorbikes). Tuk-tuks are carriages pulled by a motorbike. Going across town via tuk-tuk should cost around $5. Shorter trips within the city will be less.

If you are traveling alone, you can catch a ride for a small fee on a moto. This will be cheaper, but more of an adventure. They are not particularly regulated here, thus most drivers are engaging in a casual form of unregulated entrepreneurship. Pretty much anyone who owns a motorbike can hire themselves out. They do not usually provide helmets for their passengers. Of course, they typically do not wear a helmet themselves either.

Taxis can be found, but they mostly service the airport. If you really want a taxi, you should call and arrange one. They do not typically cruise the city looking for passengers, so it is not realistic to assume you can readily flag one down.

In 2015, local bus service was established in the city. Unsurprisingly, given how new the system is, routes are limited and service is not yet reliable. This is something to look forward to for the future, but not something you should count on for basic transportation just yet.

17) Travel Outside of the Capital:

Phnom Penh’s International Airport is still being upgraded. Its ongoing expansion has added more international flights, both to and from the capital. There are multiple daily flights to Bangkok, Thailand, and Ho Chi Minh City, Vietnam for less than $100. For about $50, you can take an Air Asia flight to their Kuala Lumpur hub and from there go on to other parts of Asia.

Although the local bus service is in its infancy, regional bus service has been around for some time. Thus, it has had the opportunity to mature. Typically for less than $20, you can find air conditioned buses to most parts of the country via Giant Ibis. For not much more money, it is also possible to find buses that will take you to a bordering country, such as Thailand. If you wish to go someplace not on an established bus route or you wish to retain additional control over your schedule, for a bit more money, you can also hire a car and driver to take you anywhere you wish to go.

18) A Magnet for Foreign Nationals:

Phnom Penh has much of the charm and opportunity that our parents found in so many places around the world, but which is nearly non-existent these days. This unusually low cost cosmopolitan city offers ready access to relatively obscure, exotic regional destinations. Plus, it has economic access to major markets, such as India, China and Australia. This makes it one of the few places left in the world where educated people from more developed nations can find abundant career opportunity while living like they are on a permanent vacation.

Check out some other great resources on tykoonre.com in our Location Profiles and Investor Guides: Learn more about Cambodia, Phnom Penh, Siem Reap & Sihanoukville. Learn more about Investing in Cambodia, Foreign Ownership in Cambodia & the Cambodian Expat Experience!

19) Retiree’s Mecca:

InternationalLiving.com’s Annual Global Retirement Index has just named Cambodia as 1 of 3 top retirement destinations worldwide. The retirement index seeks to compare and contrast retirement destinations around the world – all of which are exhibiting relatively low costs of living by global standards.

Retiring in weaker economies is becoming a global trend for expats from more expensive, developed economies, as the relative costs of living in cheaper retirement destinations guarantees a better quality of life for pensioners.

In the past 10 years the Kingdom of Cambodia has become one of Southeast Asia’s most up-and-coming destinations for tourists and expats looking to enjoy the exotic charm of a country that also offers the most attractive cost of living in Asia. Cambodia has flexible visa requirements for citizens of Western countries who can obtain annual long-stay visas with a minimum of paperwork and a processing fee of just $285 per year. When you get there, everything from entertainment to renting is very affordable in Cambodia.

Meanwhile, the Cambodian government looks set to make it even easier to retire in the Kingdom…

Meanwhile, the government has released plans to increase Cambodia’s attractiveness as a destination for foreign retirees, according to a draft policy from the Ministry of Tourism obtained by the Cambodia Daily.

“The draft includes a range of proposals to extract more income from Cambodia’s tourist industry by encouraging foreigners to buy property and stay longer in the country, with involvement from the ministries of tourism, finance and land management,” said the Cambodia Daily report.

The proposed policies are said to include measures such as the development of “special residences” throughout Cambodia with commercial tourist properties and a wide range of useful facilities. “Special tourists” such as retirees would have the right to buy, rent or sell property in these special residences, and also be entitled to longer-term and more flexible vi­sas, according to the draft of the policy.
[togglehead id=”ss” tab_id=”ss2″]Foreign Ownerhsip[/togglehead]
[togglebody tab_id=”ss2″]Cambodia, unlike its three neighboring counterparts, has a freehold land ownership system for its citizens. Foreigners based in Cambodia are also allowed rights of ownership over certain properties, subject to 2010 Law on the Provision of Ownership Rights.

These rights, however, are restricted to buildings that have obtained a “strata title”, which is available only to newly completed apartment buildings. According to the strata title regulation, foreigners cannot acquire a ground-floor unit legally, and any foreign ownership allocation is limited to a maximum of 70 percent of the units in any one co-owned building. Nevertheless, a foreigner lease term over landed properties can still be up to a 50 year maximum, with a 50 year renewal option included.

Tell me more about Cambodian Land Titles
Tell me how I can own, control or lease Land as a Foreigner in Cambodia
Tell me more are the Strata Title Transfer Process
Tell me more about the Land Title Transfer process and cost in Cambodia
Explain some of the most common pitfalls for foreign property ownership in Cambodia
Check out some other great resources on tykoonre.com in our Location Profiles and Investor Guides: Learn more about Cambodia, Phnom Penh, Siem Reap & Sihanoukville.

Learn more about Investing in Cambodia, Foreign Ownership in Cambodia & the Cambodian Expat Experience!

Search for real estate and property all over Cambodia on tykoonre.com NOW!

1) Tell me more about Cambodian Land Titles:

Cambodia Land Title Classifications Explained, Once and For All!

To the new property buyer, Cambodian land title classifications can be rather confusing. Let’s explore the three main ways property ownership can be secured in Cambodia, and the major misconceptions surrounding Cambodian property ownership and Cambodia land titles.

All Cambodian land title records were destroyed between 1975 and 1979. This meant that after the war, proof of ownership had become near impossible. In 1989, a Cambodian Land Law was passed and a revised version was issued in 2001 allowing private ownership of land.

The 2001 Land Law created the land registry system issuing Cambodia land titles that remains in place today. Since then, more than two million Cambodia land titles have been issued to Cambodians.

Property ownership can now be secured by one of three forms of Cambodia land title: Hard title, Soft title and Private Ownership in Co-owned Buildings – also known as Strata Title. In addition, a highly-secure LMAP title is also now available.


Hard title is the strongest form of property ownership in Cambodia and the best Cambodian Land Title.
Hard titles are an ownership certificate provided by the national Land Management and Planning office.
Hard titles contain detailed information that has been duly recognized and certified at a national level with the Ministry of Land and a cadastral office.

A Transfer tax of four percent applies when a hard title transaction occurs.


Soft title is the most common form of ownership and the most commonly issued Cambodia land title.
It is a Cambodian land title that is recognized at the local government level.
Soft titles are provided by the local Sangkat or District office and are not registered at a national level – but are still considered a possessory status.
The majority of property transactions still occur with soft titles to avoid ownership transfer taxes and fees.
However, most new major development projects are being transacted with hard titles as these are the most durable Cambodia land title.
Check another useful blog post on tykoonre.com relevant to Cambodia land titles: “Pitfalls for Foreign Property Ownership in Cambodia.”


Private Ownership in Co-owned Buildings is the most recent form of ownership and allows foreigners to legally own property in Cambodia.

This is more commonly known as a Strata Title.
Strata Title is a less common Cambodia land title, but numbers are growing fast.
The ‘Law on Foreign Ownership’ was promulgated on 24 May, 2010.

This law limits foreign ownership to co-owned buildings. Foreigners still cannot own land, as it is
Co-owned buildings are defined as a building or construction in which several owners reside, consisting of some parts that are the exclusive ownership of each co-owner (private units) and some other parts that are common spaces for the common use of co-owners (common areas).

Strata title has also recently been extended to commercial buildings, and in particular shared office complexes.
Learn more about the strata title process here.


A titling system called LMAP (Land Management and Administration Project) has been introduced in Cambodia by the World Bank to improve land tenure security by the Ministry of Land Management Urban Planning and Construction.
Under the scheme, GPS coordinates are being registered for all land plots in the country.
If you have an LMAP title already, the borders have been agreed between neighboring parties so all border disputes have been resolved.

This is the safest type of title.
Foreign Property Ownership in Cambodia may not be simple, but it is increasingly possible.

Always do your due diligence and take your time, and soon you will achieve foreign property ownership in Cambodia, and gain a valuable property asset.

For clarity on all of these issues and more, it is highly recommended by Realestate.com.kh to enlist experience legal support whenever considering a lease in Cambodia as a foreigner.

2) Tell me how I can own, control or lease Land as a foreigner in Cambodia…

So many people ask can foreigners own land in Cambodia… Although the short answer to this is very simple – no – there are plenty of effective ways to control land in Cambodia for your business or personal use.

Are you a foreigner who wants to buy or lease land in Cambodia? If yes – here is some handy advice you need to read!

Tykoonre.com has put together an informative article to show you exactly how you can buy or lease land in Cambodia as a barrang, and the legal precautions you must follow if your venture is to be a success into the future. It’s not all smooth sailing though, and we advise seeking professional legal counsel for any such transaction. But, at least this article is a good start!

Broadly, under Article 44 of the Constitution, foreigners cannot own land in Cambodia.

However, foreigners can establish control over land several ways:

Buying land through a local company;
By leasing land;
By attaining Cambodian citizenship;
Or by buying land through a Cambodian nominee (note: this one is actually outlawed by the constitution).
How can foreigners buy land in Cambodia through a locally-incorporated company?
This presents the least risk for foreign investors, either individual or a legal person.

Multiple pieces of land can be held. However, the costs of creating a landholding company are expensive, with high maintenance costs, and rental income taxes are high.

See the Law on the Investment of the Kingdom of Cambodia (Chapter VI, Article 16): “legal entities in which more than 51% of the equity capital are directly owned by natural persons or legal entities holding Cambodian citizenship”.

And further: “use of land shall be permitted to investors, including long-term leases of up to a period of 70 years, renewable upon request”.

51% Cambodian ownership is necessary. However, when structured with 2 classes of shares having different rights of control, one class held by foreign investor, one by the local investors, this shareholder dominance is in check. Often, local shareholders are attributed lesser rights to transfer shares or nominate directors, and any major company decisions may require a threshold vote of a 2/3 majority.

Generally, private agreements are created in which the Cambodian shareholders grant the foreigner special rights over the land. Also, by registering a mortgage on the land, the land cannot be transferred without the consent of the foreigner.

Yet, this method still can fail if the Cambodian partner denies their legal obligations. In Cambodian courts decisions may be brought, and costs are high.

Hence, due diligence on any local partner is crucial to limit risks.

How about Leasing the Land?
Often when people first ask “can foreigners buy land in Cambodia” they are quickly convinced that leasing is a better option.

Long-term leases are commonly used by foreigners as a means to control land in Cambodia.

And for most foreign business people, long term leases are, for all-exclusive-purposes, as effective as outright ownership.

Long term leases allow all necessary rights to develop the land and gain construction permissions. However, leasing structures are ultimately less secure than the company structure described earlier, but progress in being made on their clarification.

According to the Land Law, lease lengths are highly flexible. Leases generally last for 50 years, 70 years, or 99 years.

Keep in mind that leases lasting longer than 15 years must be registered at the Land Office in order to be valid. If you are trying to lease state owned land, there is a 40 years maximum on leases, with possibilities for extensions.

Whenever leasing, do your due diligence and run a full background check on the owner, similarly as you should for any company partnerships. Leasing from the wrong person, who knows the right people in power, could mean your lease becomes very unstable, very quickly.

Ensure that the lease contract includes dispute resolution outside Cambodia. However, even if you do this, in practice it may not be as effective as many believe. This is because the majority of land disputes do not involve disputes over the contract itself, rather quasi-legal matters. Cambodian courts have also been known to out rightly refuse to recognize foreign arbitration clauses.

These lease contracts might also include a clause requiring the owner to get the lessee’s permission before they may sell, or prevent the owner from selling until the new owner fully-recognizes the preexisting lease.

On top of this, a ‘block sale notice’ can be registered with the relevant Land Office, which tells the office to halt any attempts to sell the land without the lease owners’ preceding permission.

Some further issues present themselves, and the lease law remains somewhat unclear.

Firstly, regulation surrounding ownership over buildings at the close of the lease is uncertain. Floors above the ground floor of buildings belong to the lessee, who can then register titles for these floors. But, as the owner of the 1st floor also owns the land according to the Land Law, at the closure of the lease the owner of the land will also own this building. Yet, in contradiction of this, the Law on Investment, which essentially covers companies registering for tax incentives, the buildings are held to be owned by the lessor.

Nevertheless, the Government has become proactive on these issues of late, which is increasingly clarifying these uncertainties. Another problem once existed as leases are currently un-recordable at the Land Registry office; however, this issue is also under reform.

For clarity on all of these issues and more, it is highly recommended to enlist experience legal support whenever considering a lease in Cambodia as a foreigner.

Can foreigners buy land in Cambodia with Cambodian citizenship?
Yes. The Government considers citizenship applications from foreigners when a significant investment is being made in Cambodia. The Ministry of the Interior, the Council of Ministers, and the Prime Minister, all must agree to the grant of Citizenship – so you need to be a very serious and major investor to gain citizenship.

Can foreigners buy land in Cambodia through a Nominee Purchase?
Buying in a local’s name is very easy and is the most inexpensive means of controlling Cambodian land. But, by doing so, you will be ignoring the Constitutional prohibition on direct ownership of property by foreigners. Therefore it is illegal and strongly discouraged by legal support in Cambodia.

In short, to buy through a nominee structure, the investor signs a trust agreement with the landholder guaranteeing to hold the land on their behalf. The owner then mortgages that land and leases it to the foreigner.

If things don’t go to plan, a foreigner can easily face expropriation by the state, or be forced to sell the land.

Check out some other great resources on Realestate.com.kh in our Location Profiles and Investor Guides: Learn more about Cambodia, Phnom Penh, Siem Reap & Sihanoukville. Learn more about Investing in Cambodia, Foreign Ownership in Cambodia & the Cambodian Expat Experience!

3) Tell me more are the Strata Title Transfer Process…

Cambodian laws towards land titles for foreign ownership have been largely untested amidst the current construction boom. Yet the Ministry of Land Management, Urban Planning and Construction (MLMUPC) have now started to transfer strata titles to purchasers of residential units – creating legally binding ownership within co-owned buildings.

What are the steps to creating a Strata title?

At the very first stage, the developer acquires the land that the development will be on with a hard title in the name of the development company.
However, from this original master title you cannot directly transfer private unit ownerships to individual buyers.

Before this, you must first transfer the total collection of split titles into the developer’s name and ownership. For example, there might be were 50 separate titles for 50 units, made from the original, single hard title. The land department of the ministry will also screen your common area regulations and practices at this stage. If the land department is satisfied that the co-owned areas will be correctly managed and insured, then the strata titles will be issued.

Once these 50 titles have been created and transferred into the company’s ownership, we can proceed to transferring these individual titles to the individual buyers.

What is involved in the transfer of the strata title from the development company to the end buyer and owner?

The MLMUPC requires fully certified documentation of the identity and marital status of the end buyer and these documents must also be supplied and translated into Khmer.

Importantly, the strata title is solely in Khmer, thus no English names are permitted on the strata title and all buyers need their name to be translated. Khmer buyers, foreign buyers and the development company all must satisfy slightly different process and documentation demands.

During this stage, choose to engage the services of a qualified local legal firm to review the certified documents and their translation, to liaise with the authority at the land department and to provide legal assistance to buyers along the process until the transfer tax payment.

Does the buyer have to be in Cambodia to transfer the new strata title into their possession?

Yes. The buyers must physically be present in Cambodia to affix their thumbprint on their certified documentation, but most importantly on Vente Definitive and on Application for Ownership Transfer, both of which are standard templates to be provided by the land department.

This means international investors must come back to Cambodia to get the title transferred.

What costs are accrued during the transfer process?

There is a public service fee per strata title for the conversion of the master title. There is also a public service fee for each individual strata title to be issued in the buyer’s name.

Concerning the transfer tax, once the set of certified documentation is reviewed and accepted by the land department, the exact same documentation with other forms will be submitted to the General Department of Taxation. The tax officials will then issue an invoice with the amount of transfer tax to be paid after assessment of the property value based on their determined ranges and calculation method.

After issuance of the evidence from the General Department of Taxation that the tax has been paid by the buyer, the land department will complete the title transfer.

What if the buyer refuses the strata title transfer?

In theory, this will bring problems when it comes to resale because the second buyer will have difficulties to do a thorough examination or to have certitude that there are no disputes, mortgages, judgments or unpaid taxes associated with the property sold.

Pure investors are usually resistant to fulfill the physical paperwork and monetary demands to transfer the ownership in their name. Some developers in this case may accept to hold the title for them – but this can cause complications for buyers later. It is not really advised. On the other hand, such an arrangement also creates landlord liabilities for the developer holding the strata title.

An effective way to mitigate this for the reassurance of the buyer is to enlist quality legal support, to ensure constant communication with the developer and to get education surrounding the process.

Hiring a professional legal firm with experience in this is crucial – because they can make this transfer process as smooth and predictable as possible.

Check out some other great resources on Realestate.com.kh in our Location Profiles and Investor Guides: Learn more about Cambodia, Phnom Penh, Siem Reap & Sihanoukville. Learn more about Investing in Cambodia, Foreign Ownership in Cambodia & the Cambodian Expat Experience!

4) Tell me more about the Land Title Transfer process in Cambodia…

The following information explains the steps necessary for transferring land titles of ownership in Cambodia, thanks to Realestate.com.kh. Each step gives instructions, the responsible Government agency, the estimated time to complete the step, and the official cost.
Step 1 – The buyer verifies the title certificate with the Land Office, checking for potential liens (debt) or other encumbrances:

For the first step, the buyer must obtain a copy of the initial title certificate from the seller and verify proper ownership, ensuring that the seller is the rightful owner of the title certificate.

He/she verifies the title certificate with the land office to ensure that there are no liens, mortgages or other encumbrances registered already for that property.

Relevant Government Agency: Land Office

Estimated time to complete the step: 10 days (should occur simultaneous to steps 2 and 3)

Official cost: According the Prakas 995 dated of December 28th 2012 on public service at Ministry of Land Management, Urban Planning and Construction = KHR 50,000/US$12.50

Step 2 – Obtain information on the property from the relevant Commune Council Official:

The land purchaser must contact the village chief or the commune council official, in which the property is located, to obtain information on the land, in addition to an official search upon the title at the municipal land office.

Relevant Government Agency: Commune Council

Estimated time to complete the step: 10 days (should occur simultaneous to steps 1 and 3)

Official cost: No Cost

Step 3 – The buyer must obtain the certificate of incorporation of the seller’s company and other official documents from the seller:

If the landowner is a legal entity, the buyer must obtain a copy of the ID of the shareholder, or person acting on behalf of the company, and a certified/notarized copy of the certificate as issued by the Ministry of Commerce.

These documents are needed to verify the accuracy and identity of the company name appearing on the title certificate.

A Power of Attorney is also needed, as well as a resolution signed by the Board of Directors from that company authorizing the named individual to represent the company at the land office, accompanied by the Power of Attorney implementing that Resolution.

Relevant Government Agency: Ministry of Commerce

Estimated time to complete the step: 10 days (should occur simultaneous to steps 1 and 2)

Official cost: KHR 80,000/US$20

Step 4 – Apply for registration at the District Land Office of the Ministry of Land Management, Urban Planning & Construction (MLMUPC):

When 2 persons/companies wish to buy/sell real property, they must first go together to the district office of the Ministry of Land Management, Urban Planning & Construction (MLMUPC) and arrange to prepare and sign documents. The documentation needed includes the company’s statute, its Certificate of Incorporation, and Power of Attorney (obtained in Step 3).

At the same time, the original Title Certificate held by the seller must be presented to the Khan at the time of signing the deed, in order to have the name of the new owner officially inserted on the document.

Relevant Government Agency: District Land Office, MLMUPC (District Land Office of the Ministry of Land Management, Urban Planning & Construction)

Estimated time to complete the step: 20 – 30 days

Official cost: A cadastral transfer fee of KHR 600,000 is paid to MLMUPC.

Step 5 – Pay transfer tax at the Tax Collection Office:

A transfer tax of 4% of the total value of the property is paid to the Ministry of Economy and Finance at the Tax Collection Office, relevant to the location of the transferred property.

A Tax Receipt is then issued to prove that the property transfer tax has been paid.

The 4% transfer tax is set out in Article 40 of the Law on Finance 1995. In Phnom Penh, however, this tax is not assessed based on the true transacted value of the property; but, rather, based on a schedule of price of property determined by the Phnom Penh Municipality.

The assessed valuation by the Phnom Penh Municipality is usually based on the total number of square meters, the land’s location, use, potential use etc. The tax is thus not based on the actual price for which the land is sold; rather it is based on the assessed value made by the Municipal office.

If the land is more than 1200m², the surplus of the land will also be subject to “unused land tax.” For land less than 1200m², the unused land tax is not applicable.

*The time for the tax office to complete the calculation of transfer tax will depend on the location of the land and its size.

Relevant Government Agency: General Department of Taxation

Estimated time to complete the step: 1 day*

Official cost: 4% of property value (transfer fee)

Step 6 – Return to Cadastral office to complete the registration process:

After all taxes are paid, the parties may return to the cadastral office at the MLMUPC and sign/thumbprint a MLMUPC form for buying/selling real property, as filled in by MLMUPC official.

The signing/thumb printing must be witnessed by a local authority such as commune chief, who will also thumbprint.

These procedures are based on Land Law Arts. 65, 244 and 245. Land Law Art. 69 bars transfer unless all necessary taxes are paid. The documentation provided should include payment receipts of transfer tax (obtained in Step 5).

Relevant Government Agency: MLMUPC (District Land Office of the Ministry of Land Management, Urban Planning & Construction)

Estimated time to complete the step: 5 days

Official cost: Cadastral service fee paid in Step 4

Step 7 – Obtain the certificate of title from the Municipal Land Office:

The Khan/District land office forwards all the “transfer documents” to the Municipal Land Office where it issues the final Certificate of Title in the new owner’s name. It is now registered.

Relevant Government Agency: Municipal Land Office

Estimated time to complete the step: 1 to 2 weeks. The last procedural step in practice can take several weeks, depending on the diligence of the land officials and interested parties.

5) Explain some of the most common pitfalls for foreign property ownership in Cambodia…

Here are some clarifications of the most common misconceptions surrounding foreign property ownership in Cambodia for non-Cambodians.

Foreign nationals are unable to buy land freehold within Cambodia as according the the Land Law 2001 and the Cambodian Constitution unless a landholding company is set up with the majority of shares being held by a Cambodian citizen or citizens.
Alternatively, foreign nationals are able to acquire land on long-term leases as an alternative to foreign property ownership in Cambodia. These long-term leases for a foreign owner have a maximum lease term of 50 years as determined by the civil code established in December 2011. These leases can be registered at a national level with the Ministry of Land Management Urban Planning and Construction.

Long-term leases are a compromise chosen by many international investors due to the difficulties of foreign property ownership in Cambodia. Learn more about long term lease law.

It is extremely important to remember that it is illegal for foreign nationals to own a property under soft title.
However, due to a common misinterpretation of the Law on Foreign Ownership by local authorities across Cambodia, some sangkats (local councils) are currently allowing foreigners to purchase property under soft titles in their own names.

In addition, this misconception is supported by some agents and brokers who mis-advise their foreign clients as to the true nature of their soft title, claiming that it in fact represents full ownership. However, not all sangkats allow this. Boeung Keng Kang Sangkat, for example, will not allow a foreigner to be represented on a soft title whatsoever.

Furthermore, a sangkat officer can interpret a soft title as they wish: As David Murphy, Director of IPS Cambodia, explains,”Sangkat Officers are publicly elected officials who stand for election every five years. This means that when a foreigner owns property under a soft title in their own name, there is a significant risk that any change in the elected officials of the relevant sangkat may result in the correct interpretation of the law, jeopardizing or voiding that foreigner’s effective ownership.”

To protect from this misunderstanding, ensure that you always conduct a title search with the relevant Ministry of Land Office or Commune Office before purchasing property. Such a search should confirm who holds the title to the property and reveal any registered mortgages or other encumbrances on the title.

Keep in mind, as the land buyer; you may not be given the actual title to conduct the search, because this is the seller’s only evidence of ownership. The buyer will instead get given a copy of the title, so it is important that you confirm that it is the most recent copy.

Foreign Property Ownership in Cambodia may not be simple, but it is increasingly possible.

Always do your due diligence and take your time, and soon you will achieve foreign property ownership in Cambodia, and gain a valuable property asset.[/togglebody]


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