Buying a condo in Phnom Penh?

[vanbrit548]

What are the rules / pitfalls of a foreigner purchasing a condo in Cambodia? Can condos be bought in foreign name? Any special rules about bringing the money into cambodia? Is it like Thailand with the 49% foreign quota rule? Do i need to get something like a Tor Tor 3 when i bring money into the country?

Any advice is greatly appreciated.

Sent from my iPad using ThaiVisa app

[rarky]

Can foreigners buy Real Estate in Cambodia?

Yes, but with some restrictions...

Legislation passed at the beginning of April 2010 allows foreigners to own property in Cambodian buildings above the ground floor. This works well for apartments in condominiums or even older buildings in cities but not for a villa in a residential area except if you can manage to buy the upper floor.

The following options show how it is possible to buy almost anything.

Buying Real Property in Cambodia

Under Cambodian Land Law, foreign nationals cannot hold a 100% stake in real property within the Kingdom (except for the case above mentioned). However, legal mechanisms and documentation exist that allow foreigners to fully control the purchase, sale and use of real property in which they have invested, and benefit fully from any profits they make.

There are basically 5 Options for buying real estate and details of these follow.

Option 1: Forming a Company with a Cambodian Citizen

The safest method by which foreign nationals can purchase real property within Cambodia is to form a limited company in partnership with a Cambodian citizen. Any real property purchased for investment is then registered in the name of the company. The company must have a minimum 51% Cambodian shareholding. However, careful allocation of shares, and careful drafting of the rights attached to share certificates can ensure the foreigner’s full control of the company and its assets. Additional mortgage, security and Power of Attorney documents can also be created to accompany ownership documentation. Following this procedure ensures security for the foreigner’s investment.

Under this Option, the foreigner is expected to pay 100% of the purchase cost of real property plus any construction costs. If the real property is later sold, 100% of the sale price goes directly to the foreigner. This includes any profit accrued as a result of the property increasing in value. This issue should be detailed carefully in any company and/or sales documentation.

Of course the choice of your partners is of prime importance.

Option 2: Purchase plus long-term Rental

This method allows foreign nationals to purchase real property and register the Title Deed in the name of a Cambodian citizen. The foreigner and the Cambodian then enter into a long-term rental agreement by which the Cambodian citizen leases the property back to the foreigner. Lease periods can last up to 99 years.

The problem with this method, and why it has few takers, is the psychological attachment to freehold ‘ownership’. Most foreign investors expect full ‘ownership’ of something they buy. The principal of renting back property that has already been purchased is an anathema to most foreigners.

However, correct drafting of the terms of the property holding and lease arrangements make this a reasonably secure method of controlling real property in Cambodia. Under this method, the foreigner may sell the property at any time and keep 100% of the revenue from the sale. The Cambodian citizen is not permitted to disagree with or obstruct the sale. The foreigner retains the original copy of the new Title Deed as a security precaution: sale of real property is impossible without the original copy of the Title Deed.

Though the foreigner can sell the property at any time, the Cambodian citizen’s signature or thumbprint is generally required before any sale can take place. A good working relationship between both parties is therefore very important.

Option 3: Registering Real Property with a Cambodian Citizen

This method is very similar to Option 2 but requires 100% trust in the Cambodian citizen.

Foreign nationals have rights, under the Kingdom’s Statutes, to choose a Cambodian in whose name their Title Deed is registered. That is, a foreign national can purchase property and register the purchased property in the name of the Cambodian citizen.

Once the Title Deed is transferred to the Cambodian citizen, the foreigner retains possession of the new Title Deed. This is a security precaution that protects the foreigner’s interests by preventing the Cambodian citizen selling the land or property: sales are impossible without the Title Deed. Transferring the Cambodian’s rights to the foreigner via a Mortgage or Lease Agreement provides additional security for the foreigner’s investment.

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

The Cambodian citizen in whose name the Title is registered does not need to be resident in Cambodia. For example, the Title can be registered with a Cambodian citizen living in the USA or Australia. The Cambodian citizen must be able to prove Cambodian nationality.

Option 4: Marriage to a Cambodian National

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

In the event of divorce or separation, division of the land or property is dependent on the conditions under which divorce or separation takes place, and the decision of any court ruling or arbitration relating to the divorce. It is often source of conflict between the divorcees.

Option 5: Acquisition of Honorary Cambodian Citizenship

A foreigner may be granted honorary Cambodian citizenship if he or she donates a significant sum of money to the Royal Government of Cambodia for the purposes of benefiting the people of Cambodia. Foreigners who have made a special impact or rendered exceptional help to the Kingdom may also be granted this honor in recognition of their expertise or altruism.

One consequence of being granted honorary citizenship is that it becomes possible for a foreign national to acquire a 100% right of ownership over real property purchased within the Kingdom. This arrangement is recognized by the Ministry of Land Management, Urban Planning and Construction for the Kingdom of Cambodia, and by the Royal Government.

Honorary citizenship is recognized by the Royal Government of Cambodia as a legitimate means of purchasing real property within the Kingdom but it does not affect the foreigner’s original nationality or citizenship in any way.

[Hecate]

Just to clarify, if one were to buy a condominium above the ground floor, it wouldn't be necessary to involve Cambodian citizens?

[mysticpaki]

Dear Rarky Being a Pakistani national im cursed with a Paki passport. What donation is required to get a cambodian passport and nationality? Id dual citizenship is not allowed id be happy to give up my Paki passport however not possible for me to reside in Cambodia at the moment Ill be 53 tomorrow and my email is <removed> Cheers

Edited December 5, 2013 by LivinginKata
email removed as per forum rules. Send a PM

[mrdome]

Just to clarify, if one were to buy a condominium above the ground floor, it wouldn't be necessary to involve Cambodian citizens?

No, you can own it 100%.

[mrdome]

Dear Rarky Being a Pakistani national im cursed with a Paki passport. What donation is required to get a cambodian passport and nationality? Id dual citizenship is not allowed id be happy to give up my Paki passport however not possible for me to reside in Cambodia at the moment Ill be 53 tomorrow and my email is <removed> Cheers

The figure went up to $75 K

[rarky]

Just to clarify, if one were to buy a condominium above the ground floor, it wouldn't be necessary to involve Cambodian citizens?

Correct.

[Sheryl]

Just to clarify, if one were to buy a condominium above the ground floor, it wouldn't be necessary to involve Cambodian citizens?

That is correct, you can buy in your own name.

There are not many actual Condos in Cambodia, though.

What is common area partments, or houses where upper floors are separately owned (sometimes with separate entrances, sometimes having to entrance through the downstairs neighbors place).

What they call "ptar leveang" (sort of townhouses/chinese-style shophouses) are very common and often the owners will sell one of the upper floors. Which can also allow the chance ot have a roof garden.

[phuketrichard]

heard $50,000 and 5 years of having a 1 year visa with extensions to get cambodian citizenship

There are a few westerners i know in shv that have brought condos. Phnom Phen is EXTREMELY over priced.

[rarky]

Dear Rarky Being a Pakistani national im cursed with a Paki passport. What donation is required to get a cambodian passport and nationality? Id dual citizenship is not allowed id be happy to give up my Paki passport however not possible for me to reside in Cambodia at the moment Ill be 53 tomorrow and my email is <removed> Cheers

Send me $100,000 USD and I will arrange it for you.

To be honest it is not as straight-up and easy as it sounds. You're investment needs to benefit the economic future and citizens of Cambodia, the criteria is very strict and it needs to be approved and signed of by the PM and the King. And truthfully there aren't that many benefits to having Cambodian citizenship apart from being able to own land outright and travel visa free to ASEAN countries.

[rarky]

There are not many actual Condos in Cambodia, though.

What is common area partments, or houses where upper floors are separately owned (sometimes with separate entrances, sometimes having to entrance through the downstairs neighbors place).

What they call "ptar leveang" (sort of townhouses/chinese-style shophouses) are very common and often the owners will sell one of the upper floors. Which can also allow the chance ot have a roof garden.

Mostly true, across the river in Chroy Changva there are several condominium buildings already, and many more are currently being built and planned. There are also plans and construction ongoing for new condos in PP, most notably Olympic City. Its actually getting ridiculous, more appartments, condos, houses than there are people to fill them!

[Doc50]

I had two friends who used to live in Cambodia. After acquiring property they both almost became victims of murder attempts on their lives. In short when a foreigner buys property in Cambodia there is now a reason for some to kill you for that property.

Be careful.

Doc

[mrdome]

Just to clarify, if one were to buy a condominium above the ground floor, it wouldn't be necessary to involve Cambodian citizens?

No, you can own it 100% - that's the short answer. The longer one is that you are slightly confused and even in Thailand one can own a condo outright. The restrictions only apply to land and houses (and presumably any other ground floor dwelling) and are the same in both countries.

I have also heard that the rental market in PP took a hit lately, so planning to buy one and then rent it out may prove difficult. On the other hand, you can find apartments in older buildings with starting prices in the high 20's/low 30's ($US - most are a lot more, of course).

I do find some of the Khmer "interior design" concepts a bit hard to swallow though.

The "extra floor" they often put in that leaves the area below it feeling somewhat claustrophobic (and too low for a tall person) and dark - if there is only light from one side.

Some outside walls seem to have been replaced by a chain link fence.

The stair cases leading up to some of the flats and the building parts they expose can be extremely grotty.

Some balconies are tiny. Same goes for the size of individual rooms, if there are any. It's just a different approach to living where you spend much time outside or together.

[hellodolly]

Just to clarify, if one were to buy a condominium above the ground floor, it wouldn't be necessary to involve Cambodian citizens?

So a foreigner can own a condo on the second floor but not the first floor.

Other than that it sounded to me like the same conditions we have here in Thailand.

Edit

Just had a thought are the prices comparable to here in Thailand?

Edited December 5, 2013 by hellodolly

[mcfish]

heard $50,000 and 5 years of having a 1 year visa with extensions to get cambodian citizenship

There are a few westerners i know in shv that have brought condos. Phnom Phen is EXTREMELY over priced.

I think you mean expensive? they cant be overpriced unless you have some information regarding a property bubble. I mean real info through due diligence.

Condos in cambo have always been expensive and as mentioned already there aren't that many available.

[LivinginKata]

Post removed. If you disagree with another member's post then respond without the profanities.

[rarky]

Land is also ridiculously overpriced considering it's a proper third world country.

Yes, if buying in the cities it is ridiculously expensive. Head out into the boonies and its ridiculously cheap! I recently bought an acre of land for $4000, 30 minute drive from Phnom Penh.

Edited December 14, 2013 by rarky

[spambot]

Land is also ridiculously overpriced considering it's a proper third world country.

Yes, if buying in the cities it is ridiculously expensive. Head out into the boonies and its ridiculously cheap! I recently bought an acre of land for $4000, 30 minute drive from Phnom Penh.

Interesting!

1. Did you buy this land as a non Cambodian without the restrictions of needing another Cambodian National having some stake in the land ownership?

2. If you did - Is this land also intended for a property build and hence will then need to involve a Cambodian national in (via one of the above methods) in order for the build to progress?

[hanno]

Plenty of Condos coming up on Diamond Island with financing available. I am pretty sure they are ridiculously expensive though.

[spambot]

Plenty of Condos coming up on Diamond Island with financing available. I am pretty sure they are ridiculously expensive though.

I just read about the development and this is a copy quote: "Prices range from US$270,000 to US$900,000 and each has their own elevator."

[ozyjon]

After reading all the posts on Thai Visa do you still want to buy anything in a third world country, are you looking for long term security, does Pol Pot come to mind? For free advice go to Victory Hill, many Aussies there by the way, never seen so many in one place, but a lot of free advice. Not being funny but the longer i stay in LOS and the more people i meet and the more posts i read i get the vibe and that vibe is to keep my money in my home country and have an escape plan should things go bad and remember "you can't take it with you" what you can't pack into your suit case stays behind so think smart for your future, otherwise go to Victory Hill, many foreign bars for sale there.

[4whiteknnight]

Dear Rarky Being a Pakistani national im cursed with a Paki passport. What donation is required to get a cambodian passport and nationality? Id dual citizenship is not allowed id be happy to give up my Paki passport however not possible for me to reside in Cambodia at the moment Ill be 53 tomorrow and my email is <removed> Cheers

The figure went up to $75 K

I was told, but never pursued it, that even over 50yo you could get a marriage certified and pursue citizenship through the Sangkat level. It takes really solid connections and of course something to solidify the friendship...

Nothing at all like the $75k mentioned, but as I said, SOLID CONNECTIONS.

I haven't tried it but have made some fine friends on other matters....

[hanno]

Plenty of Condos coming up on Diamond Island with financing available. I am pretty sure they are ridiculously expensive though.

I just read about the development and this is a copy quote: "Prices range from US$270,000 to US$900,000 and each has their own elevator."

[mrdome]

Now let's look at this reply in detail:

"After reading all the posts on Thai Visa do you still want to buy anything in a third world country, " ... Yes, I am. First or second world - no guarantee you will not suffer some kind of loss.

"are you looking for long term security" ... That security you speak of is an illusion. If we wanted that, we should all stay or move to Northern Europe - where plenty of us come from in the first place, coincidentally. We all have our reasons to like it in SE Asia.

", does Pol Pot come to mind? " ... Pol Pot is dead, silly person. Are you honestly suggesting that the Khmer Rouge may rise again? I think it's more likely that Thailand will descend into civil war by the way things are going.

"For free advice go to Victory Hill, many Aussies there by the way, never seen so many in one place, but a lot of free advice. Not being funny but the longer i stay in LOS and the more people i meet and the more posts i read i get the vibe and that vibe is to keep my money in my home country and have an escape plan should things go bad and remember "you can't take it with you" what you can't pack into your suit case stays behind so think smart for your future, otherwise go to Victory Hill, many foreign bars for sale there."

... Not drawn to Sihanoukville and not interested in running a bar. Nice jumping off point for some of the most beautiful islands on the planet though... It sounds as if this whole SE Asia thing isn't for you maybe if you are easily afraid and security is your main concern.

[rarky]

Land is also ridiculously overpriced considering it's a proper third world country.

Yes, if buying in the cities it is ridiculously expensive. Head out into the boonies and its ridiculously cheap! I recently bought an acre of land for $4000, 30 minute drive from Phnom Penh.

Interesting!

1. Did you buy this land as a non Cambodian without the restrictions of needing another Cambodian National having some stake in the land ownership?

2. If you did - Is this land also intended for a property build and hence will then need to involve a Cambodian national in (via one of the above methods) in order for the build to progress?

I bought this land with my Khmer wife, therefore I own 49% and she owns 51%. Sorry if I got your hopes up.

[LawrenceChee]

Has anyone seen the new development Bridge in PP

It seems to hold a good investment deal being the first point block 45 storey building there

[TheSiemReaper]

Only a complete wombat would invest in Phnom Penh's property market or indeed Thailand's at the moment. The chances of civil war come the next election are increasing by the day and should His Majesty cease breathing in Thailand that country will also likely descend into civil war. Given that Malaysia or even Vietnam look like better bets (and Vietnam has just made buying property a shedload easier for foreigners too).