Foreigner Ownership Of Propert In Cambodia

[Sheryl]

The following link describes clearly (and, to the best of my knowledge, accurately) the various legal options open to a foreigner who wishes to buy property (residential or commercial) i9n Cambodia:

http://www.angkorrealestate.com/advice_for_buyers.php#3

I am currently in the process of buying property in Phnom Penh under the option 2 described in that link: Private Sale-Purchase plus long-term Rental of Land or Property. This involves registering the land in the name of a Cambodian citizen and then entering into a long-term rental agreement by which the Cambodian citizen leases the land or property back to me for 70 years (99 years also an option but I can't possibly live that long!). With a properly worded (and properly registered) lease agreement, a foreigner can retain all rights to sale of the land and any property on it, keeping all of the profits from any such sale, and the registered owner cannot sell the land without the ofreign leasee's consent, so in legal terms it is quite adequate.

I should add though that laws are only worth so much in Cambodia. The reason I am having to buy this property to begin with is that the house my adopted Cambodian family live in is being seized by the government (along with the homes of several hundred other families) to make way for a riverside park... And I know many other people, both Cambodian and foreign, who have had their property seized by the government for some development purpose or other (which wouldn't be objectionable if fair compensation were provided, but it never is) or by an "influential" person who simply wants it for their own. So there are always these risks and legal rights won't help you if your up against either the giovernment or a "Net Thom"(phuyai). It will, however, protect you in ordinary dealings with ordinary people.

[stevenjm]

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Sheryl - Thats terrible whats happening to them. I thought when you mentioned Chbar ambou before you were maybe referring to the small properties riverside but not theirs.

Also I am pretty sure that 70 years is max anyway. Best of luck finding a suitable property.

[Pattayatony]

What Sheryl has spoken about here is correct. Property is being taken away from people by the Govt all the time in Cambodia its a nightmare in Sihanoukville.

I have just been doing some business here with a guy that sets up company's for foreigners so they can own it 100% but it not cheap to set up. He is mainly working for the big multi national companys and they dont want to invest a Million $ on building a factory etc unless they can own the land also, that they reason this has been set up. He tells me it is 100% safe and you own it 100%, but as always "Buyer Beware"

Cheers Tony

[stevenjm]

Think I know who you are talking about and used to work for his company in Phnom penh - If its the same guy he is legit but I'm not sure how he does it.

[Pattayatony]

Think I know who you are talking about and used to work for his company in Phnom penh - If its the same guy he is legit but I'm not sure how he does it.

It is the same guy Steve and he is a very very switched on Business man. If anyone needs info on this you can PM me.

Cheers Tony

[Sheryl]

If you go to the link I posted from Angkor realty and then click on advice for foreigner buyers they describe how it can be done as "Option 1". Would obviously cost more in legal and registration fees, and might in future have some tax implications, no matter when what is involved is a commercial property but a reason to think twice about doing this just for ownership of a personal residence. Which is why I'm going with Option 2 (lease-back). But for business purposes Option 1 is c learly the way to go.

There have been murmerings about the govt revisiting laws on property ownership by foreigners, many in the business community have urged it. So more liberal legislation in the future is possible....but who knows.

[Khun Jean]

So basically it is the same as in Thailand. You can't own land.

Worse even there seems to be no way you can buy even a condominium freehold.

When compared to Thailand, Thailand seems the more favorable in that regard.

[Rumpole]

A Cambodian lawyer told me that the maximum lease period is 90 years, but you need to be aware that if title to the property is sold or transferred, there is no legal way to compel the new owner to honour the lease.

I understand that the Council of Ministers (read Hun Sen) has recently, within the last few weeks, decreed that foreigners can now own property in their name. Exact details are still a little hazy, however.

[Pattayatony]

A Cambodian lawyer told me that the maximum lease period is 90 years, but you need to be aware that if title to the property is sold or transferred, there is no legal way to compel the new owner to honour the lease.

I understand that the Council of Ministers (read Hun Sen) has recently, within the last few weeks, decreed that foreigners can now own property in their name. Exact details are still a little hazy, however.

Please be very careful about what Khmer Lawyers tell you If you need any advice you can PM me.

I think you may be talking about this an article from a news report on the 5th Sept 07 But the high powers to be say it may take many years for it to happen if ever. I have a way that you can form a company and own the land 100% safe and legal. Company's coming here to build factory's in excess of a $1Million want to own the land so yes there is a way to do it but it does cost money.

You are right about the lease hold it may not transfer if the owner sells the land but this all depends on how the contract is set up. So be very careful about info you get from Khmer Lawyers. I am trying to help a guy now who bought $700,000. in property and he didnt cross all the T and dot all the i.

Cambodia's private sector has urged the government to allow foreign ownership this week saying an open-minded real estate market would promote economic growth.

The Cambodian investment law was amended back in 2005 to allow foreign ownership of permanent fixtures, but as yet has not been enforced. The non-implementation of the act has in fact rendered the amendments as a forgotten law, and as such has now become out dated. In the current legal understanding, the old law will only allow a property investment in the name of a Cambodian national but with the pressure from the private sector to increase wealth, urgent action will be required.

Cheers Tony

[Rumpole]

Please be very careful about what Khmer Lawyers tell you If you need any advice you can PM me.

I have a way that you can form a company and own the land 100% safe and legal.

Quite agree that Cambodian lawyers are generally as reliable as many of their Thai counterparts. This was actually a university lecturer who mentioned it in passing - I hadn't specifically sought his advice.

I am not particularly interested in owning property in Cambodia.

[A_Traveller]

As I've noted elsewhere, Article 44 of the Constitution prohibits the freehold foreign ownership of land. All acts, decrees, sub-decrees are subordinate to the constitution. So for there to be a legal implementation of foreign land holding, the constitution would need to be amended.

Article 44: All persons, individually or collectively, shall have the right to ownership. Only Khmer legal entities and citizens of Khmer nationality shall have the right to own land. ...

The principal normally being used is that of creating a Khmer entity, {i.e.: 51/49% holdings} and then using provisions within the relevant {usually company} law to protect the foreign interest {e.g.: creating contractual provisions between the parties within the entity}. Whilst this may be presently 100% legal, such arrangements could be subject to constitutional challenge, and if the view was that the constitution was being flouted then the case would be successful, against the foreign held interest.

Further, within the Investment Law [2003], Article 16, and, again, in sub-decree 111 on its implementation, Article 19 [2005] foreign ownership of land is expressly prohibited, irrespective of 'permanent fixtures'.

Regards

[Khun Jean]

....Whilst this may be presently 100% legal,...

Would that not be with the same conditions as in Thailand. Meaning dat de 51% have to use their own money to buy the shares of the company. When the foreigner pays 100% of the bill, what will the case most time, you would be using nominees, and that again is illegal.

Edited October 31, 2007 by Khun Jean

[Sheryl]

A Cambodian lawyer told me that the maximum lease period is 90 years, but you need to be aware that if title to the property is sold or transferred, there is no legal way to compel the new owner to honour the lease.

The lease can specify that the land cannot be sold without your consent, and such provisions are legally binding.

An additional precaution is to keep the land title and certificate of sale with you, the registered owner of the land cannot sell without these documents.

So you can in fact protect yourself legally from the land being sold problem. However, if you want to sell the land at a later date and the registered owner doesn't agree, there is no legal way to compel them. So if buying for investment purposes only, forming a company ios a better option.

All of this relates to legal protections. In Cambodia those only work so far....if a high ranking person or gun-toting goon wants your land, laws won't help you.

[stevenjm]

A Cambodian lawyer told me that the maximum lease period is 90 years, but you need to be aware that if title to the property is sold or transferred, there is no legal way to compel the new owner to honour the lease.

The lease can specify that the land cannot be sold without your consent, and such provisions are legally binding.

An additional precaution is to keep the land title and certificate of sale with you, the registered owner of the land cannot sell without these documents.

So you can in fact protect yourself legally from the land being sold problem. However, if you want to sell the land at a later date and the registered owner doesn't agree, there is no legal way to compel them. So if buying for investment purposes only, forming a company ios a better option.

All of this relates to legal protections. In Cambodia those only work so far....if a high ranking person or gun-toting goon wants your land, laws won't help you.

As Sheryl said - The lease only needs to be lodged correctly and satisfy the lease laws ie. max of 70 years (or 99 if that happens to be the law) and be between the owner (lessor) and lessee. Any articles within the lease are binding between the 2 parties and have nothing to do with the lease laws - these are legally binding articles between the two parties and as such can be enforced. Up to you and lessor what you want to be placed in the lease and agreed upon - including consent of sale or any other terms you decide on. As far as I know laws only cover legality of lease with lodgement and time period and as such content is open and binding between paries. There are no laws I am aware of that restrict or give terms / conditions on lease article content.

Of course in event of death of lessee the lease could be disputed as the agreement was only between the original lessor and lessee, despite the terms - this is where a strong lease needs creating and legal advice needed.

Edited November 1, 2007 by stevenjm