Among the first few things you need to invest in is land—especially land in Cambodia. Currently, the country has shown a relatively stable economy amid the detrimental effects of the pandemic to various industries. However, industries like real estate have bounced back and continue to grow so if you’re looking to invest in this industry, now is the right time.
Since there are many possibilities to do with land and it’s limited, then this is what you need to buy first. Some of the possibilities include building a Khmer architecture there, deciding whether to develop villa vs house, or even setting up commercial properties. If you want to learn how to buy land in Cambodia, continue reading to know more.
Types of land titles
When buying properties in Cambodia, you have to take note of the property laws indicating under which title you can buy it from and what is applicable to you. After all, only locals can buy land and other properties while foreigners have a stricter rule and only specific properties they can invest in. See below the four different land and property titles:
A soft title is only granted to locals and it’s one of the cheaper and fast ways to own properties or land. While it’s only recognized and granted in the local government or sangkat and even in khan, it’s still a valid title.
Not only that but taxes and fees on transferring and buying land are less expensive under this title. Generally, it takes between 10 to 12 business days for soft titles to be transferred.
The best property and land title that could be granted is a hard title. This title is granted only to locals and is recognized both in local districts up to the national level. Not only that but this is the strongest form of property titles in the country, allowing little to no disputes to happen because of it.
It is only under the strata title can foreigners buy properties within Cambodia. However, this doesn’t mean that buying land using this option is possible since it’s only applicable for buildings with this title. For example, properties where it’s possible for different buyers to invest in a unit or units can be granted the strata title—like a condominium building. Buildings only developed within 2010 and above are the only ones that could be granted a strata title and if it’s not within 30 kilometers of the closest land border.
Moreover, foreigners can only own 70% of the share in strata-titled buildings and the rest should be owned by locals.
The Land Management and Administration Project title is only granted to locals. It works similarly to a hard title, wherein it’s recognized in both the national and local levels, but the exact GPS coordinates of the land/property and its borders are indicated.
Cost to buy land
When buying land, you have to consider the location, price, and what you want to do with it. Additionally, there are two types of land you can buy in Cambodia which are residential or commercial. Average prices for land also depend if they’re within Phnom Penh or outside of it.
The prices for land within the city centre is the following according to Asia Property HQ in 2019:
- Commercial land → $5,000 per square metre
- Residential land → $2,500 per square metre
On the other hand, prices for land outside the city costs the following just in 2019:
- Commercial land → $300 per square metre
- Residential land → $100 per square metre
Is it possible to buy land as a foreign investor?
Despite Cambodia having strict property and land ownership laws for foreigners, it is still possible to buy land through a variety of ways. See below what you can do to buy land in Cambodia as a foreigner:
- Get a Cambodian citizenship → Getting Cambodian citizenship for foreigners is encouraged by the government so if you plan to do this, it will be beneficial for your future investment options. Check the requirements for citizenship so you can apply.
- Marry a local → Marrying a local is also one way to buy properties within the country
- Buy land with the help of a local → Having a Cambodian help you buy land and other real estate properties is also another option. However, you have to ensure that you set up a trust agreement to protect your investment interest.
- Set up a land-holding company → Creating your own land-holding company in Cambodia is one way to buy land by buying it through the company. Take note though that you can only have 49% share of the company and the rest of the stakes would have to be for local shareholders. Additionally, ensure that your investment is protected by setting up security layers like minority control documents and land security.
- Set up a perpetual property lease → Another option is to set up a perpetual property lease wherein the rent contract extends 15 to 50 years. If the land is owned by the state then you can lease it up to 40 years. Under this perpetual lease contract, you can develop the land, transfer it or even assign it to someone else.