Cambodia

Cambodia

Tilleke & Gibbins

1

Restrictions

Can anyone (including foreigners) own and occupy real estate in your jurisdiction (including shares in property owning companies)? Are there any restrictions?

Generally, only natural persons and legal entities with Cambodian nationality may own real estate in Cambodia. A legal entity has Cambodian nationality when at least 51% of its shares are owned, individually or collectively, by Cambodian natural or legal persons. However, subject to certain regulatory exceptions and requirements, foreigners may own up to 70% of the private units of a co-owned building, such as condominiums, detached or semi-detached buildings, and any other buildings with common structures, excluding the ground and underground floors.

Any person, regardless of their nationality, may occupy real estate through rental without any restriction.

 

Are there restrictions on lending for the purchase of real estate by foreign companies? If so briefly give an outline?

There are no restrictions on foreign companies borrowing or lending for the purchase of real estate in Cambodia. However, Cambodian law prohibits the practice of having a Cambodian national act as a nominee shareholder of foreigners for the purpose of avoiding legal restrictions on foreign ownership of real estate in Cambodia. Therefore, any loan for this purpose is also restricted.

2

Taxes

Buying

Please provide a short summary of the fees and costs (including tax) relating to buying real estate in your jurisdiction.

Transferring ownership or right of possession over an immovable property, including land and buildings, is subject to stamp duty tax at the rate of 4% of the market value of the property, as determined by the Ministry of Economy and Finance. Stamp duty is the liability of the buyer or any person who receives the ownership or right of possession over the immovable property.

Owning

Are there taxes applicable to owning real estate and can the burden of the taxes be passed to someone else (e.g. a tenant or an occupier - not being the owner)?

Owners, possessors or final beneficiaries of real estate worth more than KHR 100,000,000 must pay an annual tax on immovable property (TOIP) at the rate of approximately 1% of the property market value. Owners of unutilized real estate that is not subject to TOIP must pay an annual unused land tax at the rate of 2% of the property market value. Third parties may pay those taxes on behalf of the obligated taxpayers, but in the case of default the tax administration may not consider the liability to pay as having been transferred.

Tax Breaks

Are there tax breaks or other incentives for foreigners to buy real estate in your jurisdiction? If so what are they?

There are no tax breaks or incentives for foreigners to buy real estate in Cambodia as only Cambodian nationals may buy real estate in Cambodia. However, foreigners may possess and utilize real estate in Cambodia through economic land concessions provided by Cambodian government. Transferring possession over such land is exempt from stamp duty.

Real estate in special economic zones is exempt from TOIP, as are properties used for agricultural, religious, or charitable purposes. Infrastructure, including airports and ports, and real estate of embassies, consulates, international organizations, and foreign governmental agents are also exempt from TOIP.

3

Title of Real Estate

How is the ownership of Real Estate evidenced in your jurisdiction?

Cambodia’s land registration system is still developing, so evidence of real estate comes in various forms. In order to be enforceable against third parties, real estate must be registered with the Cadastral Office, which issues one of several types of certificates, commonly known as hard titles, depending on where the land is located and when it is registered. Soft titles, including land sale/transfer contracts, may also evidence ownership, but such ownership may be disputed. Strata title evidences ownership of private parts of co-owned buildings, e.g. condominiums.

Is it possible to keep the identity of owners of real estate confidential in your jurisdiction?

It is not possible to keep the identity of owners of real estate confidential in Cambodia. The cadastral office has public services for providing cadastral information or copies of cadastral documents.

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Jay Cohen
Tilleke & Gibbins
Phnom Penh, Cambodia