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How To Invest Real Estate In Cambodia?

Cambodia, one of the small countries that were once unknown in Asia, is leading the world with a GDP growth rate of over 7% for 8 consecutive years and has become one of the fastest growing economies in Asia. "Cambodia real estate" is also changing in the wave of overseas investment. Cambodia's GDP growth rate in 2019 was 7.1%, and the housing price growth rate in 2018 was 16.7%, ranking first in the world. In 2018, the rental return rate reached 6.92%, ranking first in Southeast Asia, and becoming the world’s most eye-catching "Asian Economic New Tiger" . At present, Cambodia's rapid economic growth triggered the rapid heating up of the real estate industry, which is attracting investors from Japan, Singapore, China, Europe and the United States to flock to the market.

Can Foreigners Buy Properties in Cambodia?

Cambodia’s relatively relaxed investment environment encourages foreigners to buy houses. In 2010, Cambodia passed the "Foreign Ownership Property Law", allowing foreigners over 18 years of age to freely buy and sell real estate. They can freely buy and sell houses above the second floor of high-rise buildings with their passports, and they can obtain the same certificate of title and enjoy the same freehold property rights as the citizens.

However, Cambodia’s policy stipulates that foreigners cannot purchase land and villas in Cambodia in their own name. Therefore, foreigners cannot buy first-floor houses. They are only allowed to hold the property rights of houses above the second floor. That is, only the property rights of the buildings are registered, and there is no land property rights. The property rights with land certificates can only be held by Cambodians.

Cambodia has two forms of real property rights, "soft card" and "hard card". A "hard card" is a form of property ownership approved by the Central Government based on the Land Law and approved by the Ministry of Land and Resources. "Hard cards" are also divided into two types: Certificate of Immovable Property Possession; Certificate of Immovable Property Ownership. Both of these are certificates of landing in land administration agencies in accordance with the Land Law, and they are printed on good hard paper by the government, so they are called "hard cards".

A "soft card" is a form of property ownership that is only recorded by the local government. In practical applications, it is evidence to claim the property rights. It is usually printed on very ordinary A4 paper. The property rights of hard cards are permanent property rights for all years. The property rights of the soft card shall be subject to the actual registration period.

Common Procedures of Buying Properties in Cambodia

There are generally six steps in buying a house in Cambodia, including house inspection, house selection, deposit payment, agreement signing, down payment, contract signing, and house delivery:

  1. Select a house and pay a deposit, usually $3,000.
  2. Sign the subscription agreement with the passport and confirm the payment plan. Developers generally provide multiple payment options, including full payment or instalments. (The common one-year instalment plan includes: down payment 30%; later payment every 3 months, 15% at a time, 4 times a year, 60% in total; the remaining 10% should be paid when handing over the house)
  3. Pay the down payment. (Usually the down payment is made within 7 days after the deposit is delivered, the down payment ratio is usually 30%-50%)
  4. Sign the purchase contract and supplementary agreement with the developer.
  5. When the project is completed and handed over, the final payment shall be paid. (usually 10%)
  6. After the house is delivered, the hard card is processed, the processing cycle is about 3-6 months, and some developers agree to do it within one year.


Taxes and Fees Involved

  1. Purchase stage:

Name change fee: The name can be changed once before the hard card is processed, and the cost is 500-1,000 US dollars.

Attorney's fee/notarization fee: paid by the buyer, about US$300-500.


  1. Holding stage:

Housing transaction tax: also known as registration tax, stamp tax, deed tax, transfer tax. All housing transactions need to be this, with the amount of 4% of the total housing price, a one-time payment. This tax is for the transfer of hard cards, and only houses with hard card property rights will be collected, while houses with soft card property rights do not need to be paid.

Cambodia’s latest measures point out that from February 2020 to January 2021, houses with a total value of less than US$70,000 will be exempt from the tax. This favorable measure is only for real estate development registered with the Ministry of Finance and Economics or provincial and municipal financial bureaus. Quotient.

Property tax: also known as property tax and real estate tax. After the house is delivered, 0.1% of the total value of the house is paid to the Ministry of Economy and Finance. The value is not the market price. The Ministry of Economy and Finance will evaluate the property based on the type of house, area, floor, and construction age.


Hot Cities in Cambodia

Phnom Penh: Phnom Penh is the capital of Cambodia. Housing prices in the core area of Phnom Penh are growing at a rate of 20%-25% annually. The rental return rate of apartments in Phnom Penh in Cambodia is as high as 6.92%, ranking fourth in the world and first in Southeast Asia.

Sihanoukville: Sihanoukville is located in southwestern Cambodia and is a port city in Cambodia. Sihanoukville Port is the busiest coastal port in Cambodia, and the city is also the most popular tourist destination in Cambodia except Angkor Wat. The total area is 868 square kilometers. Sihanoukville’s real estate is currently scarce, land is scarce, and land prices have risen rapidly. Urbanization and the entry of foreign gold diggers have directly driven the growth of real estate demand. The rental rate of return is very high, with the annual rate of return of buying and renting as high as 8-11%. If there is a cooperative development and construction of houses, the estimated rate of return will be higher.

Siem Reap: Angkor Wat temples have made Siem Reap a world-famous tourist destination, with more than one million international tourists every year. Siem Reap International Airport is Cambodia’s second largest airport. Therefore, one of the main drivers of the Siem Reap real estate market is tourism. Investors generally look for hotels or tourism companies as investment objects, and individuals generally invest in residential buildings.

Advantages of Investing in Cambodia

The population structure is young and the development potential is great. The average age of Cambodian citizens is 27.8 years old, and more than 70% of the population in the population structure is under 34 years old. It is a very young country. A large number of young laborers can work, innovate, and help the country develop. Cambodia is in the process of rapid urbanization. Each year, 16.2% of people leave the countryside to find work in the cities. A large number of rural young people and returned overseas students who come to Phnom Penh and Sihanoukville to find opportunities need to settle here. These populations constitute a rigid group of real estate buyers, which promotes the high investment and high growth of the Cambodian economy.

The tourism industry is developed. The development of Cambodia's tourism industry has driven the development of related industries such as finance, transportation, hotels, catering and service industries, and has become an important pillar and source of income for the Cambodian economy in the future.

The economic environment is open. The Cambodian government attaches great importance to the introduction of foreign investment, and all industries are open to foreign investors, and they implement open investment policies, including: no foreign exchange control, tariff preferences, legal property rights, etc., especially for foreign investment in the real estate industry. Related laws.


Risks of Investing in Cambodia

The infrastructure is not yet perfect. Many of Cambodia’s infrastructure is not yet complete, relatively backward, roads are not clear, and electricity is unstable. Compared with other countries in the Indochina Peninsula, Cambodia’s infrastructure is not optimistic. The current transportation infrastructure construction in Cambodia cannot meet the needs of economic development at all, and infrastructure such as roads, ports, and aviation have all deteriorated in the past few years.

Over-reliance on foreign investment. Cambodia’s rapid economic development in recent years has benefited from the development of tourism, real estate, and textiles. Among them, the textile industry is still Cambodia’s pillar industry, while the tourism and real estate industries rely more on foreign tourists and foreign investment, making some vulnerable to other countries’ policies.