Pitfalls for Foreign Property Ownership in Cambodia
Love Cambodia and want to own a piece of it?
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.