The Ultimate Guide to Buying Property in Cambodia as a Foreigner!

Here is the ultimate guide to buying property in Cambodia as a foreigner, based on current laws and common practices.

The Short Answer: Yes and No

This is the most important distinction to understand:

• No: Foreigners are constitutionally banned from owning land in Cambodia. Article 44 of the Cambodian Constitution explicitly states that only natural persons or legal entities of Khmer nationality have the right to own land.
• Yes: Foreigners can legally own certain types of property, most commonly condominiums. This was made possible by the 2010 “Law on Providing Ownership Rights in Co-owned Buildings to Foreigners.”

This guide will walk you through the legal methods, the risky methods to avoid, and the step-by-step process.

Section 1: The 4 Legal Ways for Foreigners to Acquire Property

These are the government-recognized, secure methods for investing in Cambodian property.

Method 1: Strata Title (The Best & Most Direct Method)

This is the simplest, most secure, and most common method for foreign buyers.

• What it is: A freehold title to a “private unit” within a “co-owned building” (i.e., a condominium or, in some cases, an office unit). You own 100% of your specific unit, and a percentage of the common areas (lobbies, pools, gyms).
• The Law: Law on Providing Ownership Rights in Co-owned Buildings (2010).
• The Key Rules:
  1. No Ground Floor: Foreigners can only own units from the first floor upwards.
  2. 70% Cap: Foreigners can own a maximum of 70% of the total units in any single co-owned building.
  3. Location: The building cannot be located within 30 kilometers of a Cambodian land border.
• Best for: Residential investors, holiday home buyers, and those seeking the simplest, most secure form of ownership.

Method 2: Long-Term Lease (Leasehold)

This is the most common method for controlling land and landed properties (like villas or commercial buildings).

• What it is: You sign a long-term lease with a Cambodian landowner. This lease gives you the right to use, develop, and control the property for the duration of the term. You can build structures on the land and own those structures.
• The Law: Governed by the Civil Code.
• The Key Rules:
  • Duration: Leases are typically for 15 to 50 years and are often renewable for another 50 years.
  • Security: A long-term lease (15+ years) is a registered “in rem” right. It is recorded on the land’s hard title at the Land Office, and you receive a separate leasehold title certificate. This means your lease is secure even if the owner sells the land.
• Best for: Businesses, developers, and individuals who want a villa or landed house without the complexity of a company structure.

Method 3: Landholding Company (LHC)

This is a legal, but complex and expensive, way to indirectly own land.

• What it is: You form a legal Cambodian company. This company can then purchase and own land.
• The Law: Governed by the Law on Investment.
• The Key Rules:
  • Ownership Split: The company must be at least 51% owned by a Cambodian citizen or a 100% Cambodian-owned company. The foreign investor can hold up to 49%.
  • Security: The foreigner’s 49% stake is secured through various legal instruments, such as shareholder agreements, loan agreements, and a Power of Attorney, which give the 49% shareholder control over the company’s decisions and assets.
• Best for: High-net-worth individuals, large-scale developers, or those intending to buy multiple plots of land. This requires significant legal fees and trusted local partners.

Method 4: The Trust Law

Introduced in 2019, this is emerging as the safest, most modern way to control land, effectively replacing the risky “nominee” structure.

• What it is: A foreigner (the “Trustor”) transfers funds to a licensed, government-approved “Trustee.” The Trustee (who must be a Cambodian citizen or company) then holds the legal title of the land on behalf of the foreigner, who is the “Beneficiary.”
• The Law: Trust Law (2019).
• The Key Rules:
  • Licensed Trustee: You must use a trustee licensed by the Trust Regulator (TR) of Cambodia.
  • Registration: The Trust is legally registered, providing a secure, government-recognized framework. The Trustee cannot sell or transfer the property without the Beneficiary’s (your) consent.
• Best for: Individuals who want to control land securely without the high costs and complexity of setting up a full Landholding Company.

Section 2: Risky & Illegal Methods to AVOID

These methods are common but carry extreme risks. You have no legal protection and can lose your entire investment.

1. Nominee Structure (HIGH RISK – AVOID)

• What it is: You give money to a Cambodian citizen (a “nominee”), and they buy the land in their name. You then sign a “trust agreement” or a loan document saying they owe you the money.
• The Reality: This is illegal and unenforceable. It directly violates the Constitution. The courts will not recognize your side agreement. The nominee is the 100% legal owner of the property. If they decide to sell it, die, or simply stop answering your calls, your money is gone.

2. Marriage to a Cambodian Citizen

• What it is: You marry a Cambodian citizen, and the property is purchased in their name.
• The Reality: This is essentially a nominee structure with a marriage certificate. While the land can be registered as “joint spousal property,” the foreign spouse still has no direct ownership rights to the land itself. If the marriage ends in divorce, the foreigner’s claim to the property is weak and complex to dispute in court.

Section 3: Step-by-Step Guide to Buying a Strata Title Condo

This is the process for the most common and secure purchase.

1. Find a Property & Reputable Agent: Engage a well-known, licensed real estate agency. Do not rely on informal “fixers.”
2. Conduct Due Diligence (The MOST Critical Step): This is non-negotiable. Hire an independent Cambodian lawyer to:
   • Verify the Developer: Check their licenses and permits for the building.
   • Verify the Title: Confirm the developer has a “Hard Title” for the land and that the building is properly registered for “Strata Titles.”
   • Check for Liens: Ensure there are no existing mortgages or legal claims on the property.
3. Sign a Reservation Agreement: Once you choose a unit, you’ll sign a reservation agreement and pay a small deposit (e.g., $1,000 – $5,000) to take it off the market.
4. Sign the Sales and Purchase Agreement (SPA): Your lawyer must review this contract. Once signed, you will typically pay a larger deposit (e.g., 10% – 30%). If the property is off-plan, the SPA will detail the installment payment schedule.
5. Handover: Once the property is complete and you have made the final payment, the developer will hand over the keys.
6. Title Transfer: This is the final, official step.
   • You and the seller (developer) will go to the Land Office (MLMUPC – Ministry of Land Management, Urban Planning and Construction).
   • You will sign the Vente Définitive (Definitive Sale Contract).
   • You will pay the 4% Transfer Tax.
   • The Land Office will process the transfer and, after a few weeks or months, issue the new Strata Title (often a pink certificate) in your name. You are now the legal, freehold owner.

Section 4: Key Considerations: Titles, Taxes, and Fees

Property Titles in Cambodia

• Hard Title: The strongest and most secure title. It is registered at the national level with the MLMUPC. A Strata Title is a form of Hard Title. This is what you want.
• Soft Title: The most common type of title, but also the weakest. It is only registered at the local Sangkat (commune) level. It is faster and cheaper to transfer but is not recognized nationally and is more vulnerable to disputes. Avoid properties with only a soft title.
• LMAP Title: A modern, GPS-coordinate-based Hard Title, considered the most secure of all.

Taxes and Fees

• Transfer Tax (Stamp Duty): 4% of the assessed property value (not necessarily the price you paid). This is paid by the buyer upon transfer.
• Value Added Tax (VAT): 10% on all new properties sold by a developer. This is typically included in the final purchase price.
• Annual Property Tax (TOIP): An annual tax of 0.1% on the property’s value exceeding $25,000 (100 million KHR).
• Rental Income Tax: If you rent out your property, you are subject to a 14% tax on the gross rental income (for non-resident foreigners).
• Legal Fees: Expect to pay $500 – $2,000+ for a lawyer to conduct due diligence and review contracts. This is essential.

Disclaimer: This guide is for informational purposes only. Property laws can change, and every transaction is unique. You must engage a qualified and independent Cambodian lawyer before making any purchase.