Cambodia, a nation rich in history and culture, has been making significant strides in attracting foreign investment, particularly in its real estate sector. A pivotal development in this regard is the enactment of the Trust Law in 2019, which has opened new avenues for international investors to participate in Cambodia’s burgeoning property market. This article delves into how the Trust Law has simplified foreign ownership, highlights key provisions, and showcases Cambodia as an investor-friendly destination.
Understanding Cambodia’s Trust Law
Enacted on January 2, 2019, Cambodia’s Trust Law was designed to create a safe investment climate by regulating trust transactions, including arrangements to hold land for foreign investments. The law sets out rules and procedures to establish, register, manage, and control trusts, granting more protection to the parties involved and providing more venues for trustors to enforce the trust in case of a breach by the trustee.
The law defines four types of trusts:
- Other Specialized Trusts: Catering to unique financial arrangements.
- Commercial Trusts: For investment purposes, including real estate holdings.
- Public Trusts: Serving community interests, such as charities.
- Individual Trusts: Benefiting private individuals.
Foreign Ownership Before the Trust Law
Prior to the Trust Law, foreign ownership of land in Cambodia was highly restricted. Article 44 of the Cambodian Constitution explicitly limited land ownership to natural persons or legal entities with Khmer nationality. Foreigners were prohibited from owning or possessing land directly. As a result, many investors faced significant legal barriers when considering property investments in Cambodia.
While foreigners could buy strata-title properties like condominiums under the 2010 Foreign Ownership Law, direct land ownership remained prohibited. Investors often resorted to complex arrangements like nominee structures, which carried significant legal risks and lacked full transparency.
The Game-Changer: Trust Law of 2019
The introduction of the Trust Law marked a pivotal shift. By allowing foreigners to own landed property through trust structures, Cambodia offered a transparent and legally protected mechanism for international investors to participate in the real estate market.
Under this law, foreign investors can appoint a licensed trustee to hold property on their behalf. The trustee has the legal title, but the investor retains beneficial ownership, including the right to control and benefit from the property. This structure ensures compliance with Cambodian laws while providing clarity and security to investors.
Key requirements for establishing a trust include:
- Registration with the Ministry of Economy and Finance.
- Clearly defined roles and responsibilities for trustees and beneficiaries.
- Compliance with anti-money laundering laws.
Impact on Foreign Investment
The Trust Law has had a profound impact on foreign investment in Cambodia’s real estate sector. As of the second week of November 2023:
- Trust registrations reached 683 cases
- Total investment volume surpassed USD 1.223 billion
- 552 foreign investors were involved, contributing USD 580 million
This surge in foreign participation demonstrates how the legal framework has instilled confidence in international investors, making Cambodia a more competitive market in Southeast Asia.
Advantages of the Trust Law
The Trust Law offers several advantages that have made Cambodia an attractive destination for foreign real estate investors:
- Legal Ownership: Foreign investors can legally own land through trust structures, overcoming previous constitutional restrictions.
- Transparency: The law provides a clear framework governing the rights, duties, and responsibilities of the trustor, trustee, and beneficiary, ensuring transparency in transactions.
- Protection: Investors’ interests are safeguarded, with legal recourse available in case of breaches by trustees.
- Flexibility: The law accommodates various types of trusts, catering to different investment needs and strategies.
- Accessibility: The trust mechanism reduces the complexity of property acquisition for foreigners.
Government Initiatives to Enhance Investment Climate
In addition to the Trust Law, the Cambodian government has implemented complementary measures to improve investor confidence in the real estate sector:
Ease of Business Reforms: Cambodia has simplified property registration and investment licensing procedures through its “Single Portal” digital platform launched in 2022.
Sub-Decree No. 50 (2023): Issued in early 2023, this regulation enhances the transparency of real estate management and ensures better investor protection.
Special Economic Zones (SEZs): Cambodia has established several SEZs, including Phnom Penh SEZ and Sihanoukville SEZ, which offer tax incentives and streamlined regulatory processes for foreign investors.
Economic Growth and Real Estate Market Projections
Cambodia’s economy has been experiencing significant growth, which has positively impacted the real estate market. The Real Estate market in Cambodia is projected to grow by 2.86% (2025-2029), resulting in a market volume of US$693.40 billion by 2029. Residential Real Estate dominates this market segment, with a projected market volume of US$574.10 billion in 2025.(Statista)
Key drivers include:
- Increasing urbanization with Phnom Penh leading the demand for high-rise residential developments.
- Growing tourism driving resort and hospitality investments.
- Infrastructure improvements, such as the Phnom Penh-Sihanoukville Expressway.
Conclusion
Cambodia’s Trust Law of 2019 has been a game-changer in unlocking the country’s investment potential, particularly in the real estate sector. By providing a legal framework for foreign ownership through trusts, the law has attracted global real estate buyers, leading to significant foreign investment inflows. The success stories and positive market projections underscore Cambodia’s position as an investor-friendly market, poised for continued growth in the coming years.
With a combination of legal reforms, economic stability, and proactive government measures, Cambodia has successfully positioned itself as one of Southeast Asia’s most promising real estate markets.
Also read, Cambodia’s Economic Growth in 2025: Key Sectors Driving Progress
