Home » “Co-Owned Buildings and Land Acquisition in Cambodia: Exploring Opportunities and Challenges under the 2010 Law on Foreign Ownership”

“Co-Owned Buildings and Land Acquisition in Cambodia: Exploring Opportunities and Challenges under the 2010 Law on Foreign Ownership”

by Surya Narayan
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In recent years, Cambodia has experienced rapid economic growth, attracting investors and expats from around the world. However, navigating the country’s complex property laws can be a challenge for foreigners looking to invest or settle down in the Southeast Asian nation. The 2010 Law on Foreign Ownership and its subsequent decrees have opened doors for foreign investors, but it’s crucial to understand the nuances and limitations of these regulations.

A Breakthrough in Foreign Ownership:

The Law on Provision of Ownership Rights over Private Units in Co-Owned Buildings to Foreigners and its follow-up Sub-Decree No. 82 have significantly eased restrictions on foreign ownership in Cambodia. These laws allow foreigners to own up to 70% of private units in co-owned buildings or condominiums, excluding ground and underground floors. This key development has marked a major step forward in the Cambodian property market, opening up opportunities for foreign investment.

Navigating the Formalities:

While the 2010 laws have created new possibilities for foreign ownership, they also come with specific formalities that must be followed. To register their rights to co-owned buildings or condominiums, foreigners must apply for co-ownership titles. The law applies to both newly constructed co-owned buildings and existing buildings that are to be converted into co-owned structures.

Limitations in Land Registry:

Despite the progress made by the 2010 laws, most private units in Cambodia remain unregistered as “co-owned” property at the Land Registry. This means that, according to Cambodian law, only Cambodian citizens or entities can legally own these properties. Cambodian entities are defined as those in which 51% or more of the voting shares are held by a Cambodian citizen or entity with a registered address in Cambodia.

Creative Solutions for Foreign Ownership:

To overcome these limitations, foreigners often set up landholding companies where they hold 49% of the voting shares, with a Cambodian legal person or entity holding the remaining 51%. This arrangement allows foreigners to own land in Cambodia while adhering to local laws. Additionally, foreigners can register a security interest in land by way of a hypothec (mortgage), further expanding their options for property ownership.

The 2010 Law on Foreign Ownership and its subsequent decrees have undeniably created new opportunities for foreign investment in Cambodia’s property market. However, understanding the intricacies of these regulations and navigating the formalities is essential for successful ventures. By partnering with local experts and adopting creative solutions, foreigners can seize the opportunities presented by Cambodia’s burgeoning real estate market while remaining compliant with the nation’s laws.

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