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Everything you need to know is included in our Cambodia Property Pack
Cambodia is a popular destination for foreigners who want to invest in real estate.
It has stunning scenery, a vibrant culture, and hospitable locals. But purchasing property in a foreign country can be complex, particularly when it comes to the laws and regulations.
This guide is here to help foreign buyers comprehend how the property market works in Cambodia. It covers all the information you need to know in a straightforward and simple way.
Also, for a more in-depth analysis, you can check our property pack for Cambodia.Can you purchase and own a property in Cambodia as a foreigner?
If you are American, we have a dedicated blog post regarding the property buying and owning process in Cambodia for US citizens.
Foreigners interested in buying real estate in Cambodia should be aware of several key points regarding their rights and the regulations in place.
While Cambodia offers enticing opportunities for real estate investment, there are distinct differences between the rights of foreigners and locals in this regard.
Firstly, it's important to note that foreigners cannot own land outright in Cambodia. The Cambodian Constitution and Land Law restrict land ownership to Cambodian citizens.
However, there are ways for foreigners to indirectly control land, such as through long-term leases or setting up a land-holding company with a majority Cambodian shareholding. This structure is often used for larger investments and developments.
Despite the restriction on land ownership, foreigners can own other types of real estate, most notably condominiums or apartments.
The key condition here is that the property must be on the first floor or above, and foreigners can own up to 70% of any one building, provided the building has a strata title. This strata title system, introduced in 2010, allows for foreign ownership in condominiums and is a popular choice among international investors.
Regarding residency and visa requirements, there is no need for a foreigner to reside in Cambodia to purchase property. Nor is there a specific visa or permit required solely for the purpose of buying real estate.
Investors can enter Cambodia on a tourist or business visa and proceed with property transactions.
There are no specific rules that differentiate between foreigners based on their country of origin. The laws and regulations apply uniformly to all non-Cambodians.
There is no minimum investment requirement for buying property in Cambodia. However, buyers should be aware of all the associated costs, such as taxes, legal fees, and potential property management expenses.
Can you become a resident in Cambodia by owning a property?
Cambodia did not offer a direct residency-by-investment program linked to real estate purchases.
This means that simply buying property in Cambodia does not automatically qualify you for residency.
However, Cambodia is known for having relatively flexible and accessible options for obtaining residency, which can be an indirect benefit for real estate investors.
To gain residency in Cambodia, the most common routes are through employment, business investment, or retirement.
If you're purchasing property in Cambodia as part of a broader investment or business plan, you might qualify for a business visa, which can be a pathway to longer-term residency. Business visas can be extended annually and, with continuous renewal, can eventually lead to a form of long-term residency.
For those considering retirement in Cambodia, there's the possibility of obtaining a retirement visa.
This type of visa typically requires proof of financial self-sufficiency and that you are of retirement age. Owning property might enhance your profile as a stable resident but is not a direct criterion for obtaining this visa.
The process for obtaining residency involves applying for the appropriate visa, which usually starts with a business or ordinary visa. This can then be extended annually.
After a number of years of continuous residence in Cambodia (often reported as seven years), you may become eligible to apply for permanent residency.
It's important to maintain your visa status without interruption during this period.
As for citizenship, Cambodia does offer the possibility of naturalization. The requirements include having resided in the country for a certain number of years, having some knowledge of the Khmer language, and demonstrating good behavior and understanding of Cambodian customs.
Owning property might indirectly support your citizenship application by demonstrating your commitment to living in Cambodia, but it is not a direct qualifying factor
Thinking of buying real estate in Cambodia?
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Market indicators
You can find fresh and updated data in our pack of documents related to the real estate market in Cambodia.
By taking a closer look at the GDP per capita indicator, it becomes apparent that Cambodian people have become 7.4% richer over the last 5 years.
With the population becoming wealthier, there is a likelihood of increased demand for real estate, potentially leading to higher prices in the future.
The platform Numbeo indicates us that rental properties in Cambodia offer rental yields between 3.5% and 6.2%.
While they may not provide significant profitability, these moderate yields offer stability and a steady income stream over time.
To know more, you can also read our dedicated article: is it a good time to buy a property in Cambodia?
The life as an expat
Life as an expat in Cambodia can be both exciting and challenging.
On the one hand, expats in Cambodia get to experience a vibrant culture, friendly people, and a beautiful landscape. On the other hand, living in a developing country can pose some difficulties, such as language barriers, limited access to healthcare, and lack of reliable infrastructure.
Cambodia is a great place to experience a different culture and way of life. Expats are welcomed with open arms and can easily get involved in the local community. There are plenty of activities and attractions to explore, from the famous Angkor Wat to the stunning beaches of Sihanoukville.
Living in Cambodia is also a great opportunity to learn a new language. Khmer is the official language, but English is widely spoken, especially in tourist areas. Expats can also take advantage of the low cost of living, with food and accommodation being very affordable.
However, there are some challenges to living in Cambodia. The infrastructure is still developing, so some services may not be available. Healthcare can also be a challenge, with limited access to medical facilities and medications.
Overall, life as an expat in Cambodia can be an exciting and rewarding experience. With its friendly people, vibrant culture, and stunning landscape, Cambodia is a great place to live and explore.
What are the best places to buy real estate in Cambodia?
This table summarizes some of the best places to buy a property in Cambodia.
| City / Region | Population | Average Price per sqm (USD) | Strengths |
|---|---|---|---|
| Phnom Penh | ≈ 1.5 million | 1,500 - 3,500 | Capital city, economic center, cultural landmarks, dining and nightlife |
| Siem Reap | ≈ 250,000 | 1,200 - 2,500 | Gateway to Angkor Wat, historical sites, tourist attractions, vibrant markets |
| Sihanoukville | ≈ 250,000 | 1,200 - 2,800 | Coastal city, white sandy beaches, beach resorts, water activities |
| Battambang | ≈ 150,000 | 1,000 - 2,500 | Artistic and cultural hub, French colonial architecture, scenic countryside |
| Kampot | ≈ 50,000 | 800 - 2,000 | Riverside town, laid-back atmosphere, pepper plantations, nature activities |
| Kep | ≈ 40,000 | 1,200 - 2,500 | Seaside retreat, seafood markets, national park, French colonial villas |
| Banteay Meanchey | ≈ 200,000 | 800 - 2,000 | Rural province, bordering Thailand, agricultural land, rural lifestyle |
Want to explore this further?
Do you need a lawyer when buying a property in Cambodia?
When purchasing a property in Cambodia, engaging a local lawyer can be crucial in navigating the legal requirements and ensuring a successful transaction.
One important document they can assist with is the Sale and Purchase Agreement, which is a legally binding contract between the buyer and seller, outlining the terms and conditions of the sale.
The Cambodian lawyer can also help with conducting a Title Search to verify the property's ownership status and identify any potential legal issues or encumbrances.
Additionally, they can guide you through the process of obtaining necessary permits and approvals from relevant authorities, such as the Ministry of Land Management, Urban Planning, and Construction.
They will ensure that all relevant taxes and fees, such as the Property Transfer Tax and Registration Fees, are paid correctly and in compliance with Cambodian laws and regulations.
What are the risks when buying a property in Cambodia?
We've got an article dedicated to the risks associated with purchasing property in Cambodia.
The main risks when buying a property in Cambodia are:
1. Land disputes: After decades of civil war and political instability, land disputes are still common in Cambodia. It is important to ensure that the title deed of the property is clear of any prior claims before proceeding with the purchase.
2. Lack of infrastructure: Many areas of Cambodia lack basic infrastructure such as roads, electricity, water and sewerage systems, making it difficult to maintain a property and attract potential tenants.
3. Uncertainty of ownership: As the legal framework in Cambodia is still relatively new, there is some uncertainty surrounding the ownership of property and how it will be treated in the future.
4. Political risks: As Cambodia is a developing nation, there is always the risk of political unrest, which could have an impact on the value of a property.
Everything you need to know is included in our Cambodia Property Pack
What is the list of documents needed for a real estate transaction in Cambodia?
When buying a property in Cambodia, the following documents are required:
1. National Identification Card (NIC) of the buyer
2. Title Deed of the property
3. Power of Attorney (if applicable)
4. Tax Identification Number (TIN) of the buyer
5. Certificate of Land Tax Payment
6. Authorized Signature of the Seller
7. Notarized copy of the Sales and Purchase Agreement
8. Certificate of Registration of Property with the Ministry of Land Management, Urban Planning and Construction
We review each of these documents and tell you how to use them in our property pack for Cambodia.
How can you negotiate with people from Cambodia effectively?
When engaging in property negotiations in Cambodia, it is important to consider key aspects of Cambodian culture that can influence the process.
Respect for hierarchy and authority is deeply rooted in Cambodian culture. Showing deference to senior individuals and demonstrating respect for their position can have a positive impact on the negotiation dynamics.
Hospitality is highly valued in Cambodia, and it is common to exchange pleasantries and engage in small talk before getting down to business. Embracing this friendly atmosphere and reciprocating hospitality can help foster a productive negotiation environment.
Patience is essential when negotiating in Cambodia, as decision-making processes may take time. It is important to maintain a calm and composed demeanor, allowing sufficient space for discussions and considering different perspectives.
Indirect communication is common in Cambodian culture, and it is important to be attentive to non-verbal cues and implied meanings. Politeness and tactfulness in language and tone are valued, as direct confrontation or aggressive negotiation styles may be counterproductive.
Finally, understanding the local real estate market and legal procedures is crucial. Conducting thorough research, seeking guidance from local experts, and being aware of regulations and customs will empower you during negotiations and ensure a smoother property transaction process in Cambodia.
Can foreigners get a mortgage in Cambodia?
Yes, foreigners can obtain property loans in Cambodia. The Cambodian government allows non-residents to apply for property loans, subject to certain conditions and requirements.
Foreigners looking to obtain a property loan in Cambodia generally need a valid visa or residence permit, proof of income or employment, and must meet the specific criteria set by the lending institutions in the country.
Some banks in Cambodia that can grant mortgages to foreigners include Canadia Bank, Acleda Bank, and ABA Bank.
However, it's important to know that mortgage rates in Cambodia for a 20-year term range between 9% and 13%, which can make it difficult for borrowers to access affordable funds. As a foreigner, you should seek other financing options for a smoother borrowing experience.
What are the taxes related to a property transaction in Cambodia?
Here is a breakdown of taxes related to a property transaction in Cambodia.
| Tax | Description | Calculation | Who pays |
|---|---|---|---|
| Capital Gains Tax | Tax on the profit from the sale of the property | 20% on the net capital gain (the difference between sale price and cost) | Seller |
| Rental Income Tax | Tax on rental income generated from the property | 10% of the associated total rental income | Owner |
| Property Transfer Tax | A tax on the transfer of ownership | 4% of the property's registered value | Buyer |
| Stamp Duty | Tax for stamping the property transfer documents | Varies between 100 and 2000 Riel | Buyer |
| Property Tax | Annual tax on the property's value | 0.1% of the property's value if it is over 100 million Riel | Owner |
For a more detailed calculation, refer to:
- the LIA Global's website
- the LIA Global's website
- the LIA Global's website
- the LIA Global's website
- the Knight Frank Cambodia's website
What fees are involved in a property transaction in Cambodia?
Below is a simple breakdown of fees for a property transaction in Cambodia.
| Fee | Description | Calculation | Who pays |
|---|---|---|---|
| Property Valuation Fee | Fee for property valuation services | Varies between 0.025% and 0.17% of property value depending on the worth of the property | Buyer |
| Notary Fees | Fees for notarizing property-related documents | Typically a percentage of the property's value or a fixed fee | Buyer |
| Property Inspection | Fee for property inspection by the government authorities | Varies depending on the property's size and location | Seller |
| Real Estate Agent Fee | Commission fee for real estate agent services | Around 3% to 5% of the property's sale price | Seller |
You can find more information about the calculation on:
- the IPS Cambodia's website
-Buying property as a foreigner in Thailand: the guide
Buying real estate in Cambodia can be risky
An increasing number of foreign investors are showing interest in Cambodia. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.