How Foreigners Can Buy Real Estate In Cambodia

If you look at the border markets in Asia, Cambodia is the most open to foreign real estate buyers and business owners.

Although Cambodia is not an economically developed state, tourism, agro-industry, and the production of clothing and footwear attract foreign investors. Investment in Cambodia depends on the scope of the investment, both aimed at achieving a long-term outlook and immediate returns.

Arranges investment transactions only after obtaining competent advice on investment issues and in accordance with Cambodian law.

Located in the heart of Southeast Asia, the small country has grown economically since the break-up of the Khmer Rouge 20 years ago. Cambodia Property Investment is the first way to take advantage of the country’s unprecedented rise.

There is no such thing as a recessionary country, but Cambodia is as close as it gets. This is because Cambodia, like many border markets, is less connected to the global economy.In the 21st century, almost every country is dependent on others. If China, the United States or Europe get sick, the rest of the world will get sick.

But the rare exception is often border economies that do not rely so heavily on foreign capital. Cambodia is under the radar of most investors but it is changing rapidly. Multinational companies such as Samsung, Nike, Toyota and many more are operating in Cambodia’s bustling capital, Phnom Penh.

Foreign investment activity in Cambodia has increased by more than 800% in the last decade and seems to be just beginning.

Manufacturing is also growing at an impressive level especially due to lower labour costs than in China, which is becoming more expensive for the industry. Obviously, such factors are positive for Cambodian real estate prices and the country’s economy as a whole.

Can Foreigners Buy Cambodia Real Estate?

Cambodia not only allows foreign investment but also encourages it to grow more than anywhere else in South Asia. It’s easy to set up almost any type of business with 100% foreign ownership.

One year, multiple entry visas cost $ 250 and take a few days. Living in Cambodia with a long-term visa is easy and cost-effective.

For real estate buyers, foreign condominium units can directly own their own title. But straw titles are not available for land or shop house apartments. The general consensus is that new condominium buildings are more expensive.

You can often find great deals in old shop house apartments that survived the colonial era. Land plots with development potential are also promising for active investors.

However, things get more complicated for these two types of properties because foreigners cannot own a condominium unit directly.

You will have to enter into a designated agreement with a Cambodian citizen through a variety of contracts or create a Cambodia Land Holding Company.

The land holding company is more legally secure, but it is required to pay an annual licensing fee and a monthly tax. If you are buying a Cambodian property on a large scale, the profit may be worth the extra effort and expense.

Hard Title VS Soft Title

In addition to class titles, there is another distinction between “hard titles” and “soft titles” in the Cambodian property market. Both give you legal freehold status and must be owned by a Cambodian company.

However, there are some important differences between hard tiles and soft titles. Difficult titles are registered through the national government’s land registry and give property owners an undeniable right. Soft titles are registered with the local government. Soft titles, at least in theory, are not ironclad like hard titles.

In fact, more than 85 properties in Cambodia Real Estate are placed on soft titles and serve as legal, government recognized proof of ownership. The soft titles are so solid that virtually any local bank will accept them as collateral for a secured loan.

Most Cambodians prefer soft title property because the transfer fee is very low. Not only that, but the local government takes much less time for processing than the national government.

Everything can end in a few days instead of months, something that makes Flipper’s life easier.

With that said, proper diligence is a good idea. Real estate investors often talk to neighbours, check the land registry, and make sure that the seller of the soft title property is the real owner and that there are no barriers.

Gradually, of course, the whole land of Cambodia will be transformed from a soft title to a recognized difficult title through this initiative. It’s only a matter of time before all soft titles are replaced for free and no longer exist.

You can read “Hard title vs. soft title” on other websites. But the idea of any major difference between the two titles is largely the brainchild of the Cambodian expat community.

Is Buying Real Estate in Cambodia Safe?

In a word, yes. If things are done right, foreigners enjoy freehold ownership and complete control over their property.

However, it is important, especially for soft title properties, to talk to neighbours. Make sure there are no other claims on the property you are buying.

Although rare, people have not heard of selling mortgages or otherwise disputed properties. With proper care, it can be easily avoided. It is also important to remember that foreigners cannot own soft titles or hard title properties in their own name, just straight titles.

If you do not want to join and form a real estate holding company, your only option is to find a local nominee to own the property and bind it with several contracts.

Be aware that if you buy the upper floor of a shop house apartment in Cambodia, you own the roof of the building and generally have the right to build on it. Although you must first get district approval.

Before choosing to Invest in Cambodia, a potential investor needs to consult an expert who will not only give profitable investment advice to the economic sector but also in conducting investment transactions.