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Cambodia has become an attractive destination for real estate investors in recent years. Thanks to its fast-growing economy and favourable investment climate. The land has proven to be a popular choice among the various properties, especially for locals who prefer landed homes over condominiums and apartments. In this article, we’ll explore the key factors to consider when investing in land in Cambodia, including the cost of property, foreign ownership regulations, and the reasons behind Cambodia’s rising appeal.Cambodia Property Guide: Understanding Cambodia Properties1. Hard Title2. Soft Title3. Strata TitleCan Foreigners Buy Land in Cambodia?How Much Does a Property Cost in Cambodia?Why Choose Cambodia?A Buyback OptionOther Things To Understand in CambodiaUnderstanding Cambodia Properties One of the key advantages of investing in land in Cambodia is its high appreciation rate. Land prices in good locations with good amenities can rise by 10% yearly. Moreover, for short-term investors, some opportunities only require a four-year commitment. This means that investors can expect to earn a handsome profit within a relatively short time frame."Sounds promising but about foreign investors?" However, if you're a foreigner looking to invest in Cambodia, knowing the regulations governing land ownership is essential. While foreigners can own land and properties in Cambodia, some restrictions exist. According to Cambodian law, foreigners may own land through a company, provided a Cambodian entity owns 51% of the company. This means that a Cambodian citizen must hold the majority ownership of the company, while foreign individuals or entities can own the remaining 49%. Here are three types of properties you can invest in Cambodia: 1. Hard Title A Hard Title is the most secure and recognized form of land ownership in Cambodia. It is issued by the Land Management and Administration Project (LMAP) under the Ministry of Land Management, Urban Planning, and Construction.Ownership Rights: Owners of properties with a Hard Title have clear, legal ownership, which is recognised both by the Cambodian government and internationally. The title can be transferred, mortgaged, or sold. Registration: Hard Titles are registered with the Cadastral Office, and they have a clear record of the land’s ownership and boundaries.Foreign Ownership: Foreigners are not allowed to own land under a Hard Title. 2. Soft TitleA Soft Title is a more informal and less secure form of property ownership, often used for land that has not been officially registered with the authorities. Ownership Rights: The Soft Title is typically recognised by local communities and the landholder, but it is not registered with the government, making it less secure than a Hard Title.Risks: Because Soft Titles are not officially registered, the risk of land disputes or legal challenges is higher. Registration: A Soft Title is often based on traditional ownership or informal agreements. Landholders may choose to convert their Soft Title into a Hard Title by going through the official registration process.Foreign Ownership: Foreigners are not allowed to own land under Soft Title.3. Strata TitleA Strata Title refers to the legal ownership of individual units within a condominium or multi-unit property. Ownership Rights: A Strata Title gives the owner full ownership of the interior space of their unit, while the common areas (e.g., hallways, elevators, amenities) are co-owned by all unit holders through a management company or owners' association.Foreign Ownership: Foreigners can own up to 70% of the units in a building that is registered under a Strata Title. This is one of the few ways foreigners can own property in Cambodia without having to partner with a local.Condominium Developments: Strata Titles are most common in modern condominium developments in urban areas like Phnom Penh, where real estate demand is high. Can Foreigners Buy Land in Cambodia?If you're still wondering whether foreigners can buy properties in Cambodia, the short answer is yes. But with significant restrictions: Land Lease: Foreigners can lease land in Cambodia for up to 99 years through a lease agreement. This option provides a way for foreign investors to use the land for commercial or residential purposes.Partnership with a Cambodian Citizen: Foreigners can enter into a partnership with a Cambodian citizen to buy land, where the Cambodian partner holds the legal title to the land, but the foreigner holds the majority of the profits from the property.Condominium Ownership: Foreigners are allowed to purchase property in Cambodia, but they can only buy up to 70% of the units in a condominium building. They can own the property outright if it is a condominium and meets the rules for foreign ownership.How Much Does a Property Cost in Cambodia?The cost of property in Cambodia varies depending on the location, type of land, and purpose of the investment. On average, prices for land in urban areas like Phnom Penh, Siem Reap, and Sihanoukville tend to be higher compared to rural or less developed regions. However, Cambodia remains one of the more affordable markets in Southeast Asia, especially when compared to neighbouring countries like Thailand or Vietnam.Phnom Penh: The capital city, Phnom Penh, is the most expensive area for land investment. For a standard single family home in Phnom Penh tend to be between $150k to $200k. Siem Reap: Known for its proximity to the famous Angkor Wat temples, Siem Reap has a thriving tourism industry. Land prices here are somewhat lower than Phnom Penh, ranging from $500 to $1,500 per square meter in prime areas.Sihanoukville: This coastal city has seen significant development in recent years. Prices for land here can range from $200 to $1,000 per square meter, with prime beachfront locations or developments near resorts. Rural Areas: In more rural regions land prices are much more affordable. Prices can be as low as $50 to $200 per square meter, making it an attractive option for large-scale development projects.Why Choose Cambodia?Economic Growth: Cambodia has been experiencing impressive economic growth, driven by sectors like tourism, construction, manufacturing, and agriculture. The country’s GDP has grown steadily in recent years, creating a favourable environment for investment.Affordable Property Prices: As mentioned earlier, Cambodia’s real estate market is relatively affordable compared to its regional counterparts, providing investors with an opportunity to secure land at lower prices with high potential for appreciation. Political Stability: Cambodia is a developing country, which is a key factor that attracts foreign investment. The government has actively encouraged foreign investment and continues to improve infrastructure, further supporting the growth of the real estate market.Strategic Location: Its proximity to major international shipping routes and growing trade partnerships around Southeast Asia makes it an attractive location for businesses and investors looking to tap into the region.Rising Demand for Real Estate: Cambodia’s growing population, expanding middle class, and increasing demand for both commercial and residential properties, the country’s real estate market offers plenty of opportunities for growth and long-term returns.Tourism Potential: With cities like Siem Reap and Phnom Penh, the country has led to an increased demand for real estate, making it an appealing option for those looking to invest in properties with rental or commercial potential. A Buyback OptionIn Cambodia, there's also a buyback option that can add a layer of security to your investment. In that case, they are confident in their ability to develop and sell the land at a profit within the agreed timeframe.A buyback agreement in real estate is a contract where the seller promises to buy back the property later, often at a fixed price or according to a specific formula. This type of agreement acts as a guarantee or option for the buyer, allowing them to sell the property back to the original seller within a certain period.Buyback agreements are commonly used in real estate transactions for various reasons, such as investment security, development projects, or certain types of financing arrangements.Indeed, a buyback option can add a layer of security to your investment. The buyback agreement also offers a guaranteed exit strategy, which can be particularly appealing for investors looking for a low-risk investment option. Other Things To Understand in Cambodia In addition to the buyback agreement, the demographic and infrastructure trends in Cambodia also make it an attractive investment option. Public services nearby, like Phnom Penh International Airport, Phnom Penh Autonomous Port, Sovannaphum Port, Green City Japanese town, Special Economic Zone, and Kandal Satellite City, makes the country more appealing than ever. Moeover, Cambodia's population is young and growing, with a median age of just 25. An alarmed and expanding market for goods and services, including real estate. As the economy continues to grow and more people move into the middle class, demand for property will likely increase.Furthermore, Cambodia's strategic location in Southeast Asia, its abundance of natural resources, and its government's efforts to improve infrastructure and attract foreign investment make it a promising destination for investors. That being said, as with any investment, there are always risks. Political instability, economic downturns, and other unexpected events can impact the value of your investment.With proper research and due diligence, investing in land in Cambodia can be a wise decision for those seeking to diversify their portfolio and capitalise on the country's growth potential.While there are regulations surrounding land ownership in Cambodia, foreign investors can still take advantage of the numerous investment opportunities available in this growing market.This article was written by Angela Chen. Looking for your townhouse investment in Cambodia? IQI is here to address all your queries![hubspot portal="5699703" id="e2cc27a1-6702-4e49-8e60-1ff4ff9ef2f4" type="form"]

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The World Bank may forecast Cambodia's economic growth to slump to between 2.5 per cent and 1 per cent this year, yet the situation offers an opportunity Cambodia to position themselves as a supply chain alternative to China.Retailers are learning lessons about the necessity of diversifying their manufacturing hubs to make them more resilient in the face of shocks. Several textile companies, such as Levi Strauss and Adidas, have recently increased their US imports from Cambodia. In the last 3 months, Levi Strauss had a 81.7% increase in shipments while Adidas had a 28.9% increase in imports from Cambodia. Now is the time for Cambodia to capitalize on this pivot and accelerate their manufacturing sector.The pandemic has also led to widespread displacement of workers, creating an opportunity for the government to invest in the human capital of workers. The government is providing retraining and upskilling programs for displaced workers to support their reintegration. The move is timely and falls into the broader narrative of preparing the ASEAN labor market for job losses, already anticipated pre-COVID-19, due to existing threats such as automation.The COVID-19 pandemic is an unprecedented crisis and Cambodia, a country dependent on tourism and supply chain links to China, is faced with heavy economic losses and an urgent need to strengthen public health capabilities. The government needs to respond quickly and decisively to stem the short term economic losses while ensuring that the most vulnerable groups are protected.But the crisis also creates an opportunity for Cambodia to re-examine its long term priorities. By placing strategic bets on supply chain diversification and investment in human capital, Cambodia can emerge stronger in the post-pandemic world.

Purchasing property can be a complicated and taxing process. Often, this phase is particularly perplexing for foreign buyers as they are unfamiliar with the legal law and local norms. Before venturing into the real estate industry, first-time foreign property buyers must equip themselves with a fundamental understanding.Cambodia as a place to buy propertyAside from the magnificent Angkor Wat and other well-known historical sites, Cambodia is a prominent real estate investment destination. Substantial economic expansion, tourism growth, dollarized economy, and much more lead to the development of properties - making Cambodia a great place to invest. Waiting for you in Cambodia is a lineup of attractive returns with low-interest rates and low capital costs. Thus, making this country one of the most sought-after destinations for foreign investors in recent years. Suppose you are a foreign buyer looking to purchase a property in Cambodia; psyched up! Here are 5 necessary steps to help you do so.  Purpose of Land Land Title Land Price Financial Help Important Documents1. Find Your Purpose in Buying LandFrom conventional investments in single-family homes to trendy condominiums in the downtown areas, the most valuable assets are still - land. There are only so many things one can do with land, including building different types of residential properties or renting it out to commercial or industrial companies.According to Cambodian law, foreigners are prohibited from owning land, although several options enable foreign buyers to hold land in Cambodia. We will expand on this in the later subtopic.The three major types of land properties in Cambodia that are very much worth investing in are residential, commercial and agricultural. And in Cambodia, agricultural land or ‘farm land’ is one of the top investment options, as the country’s main export in crops are rice and fruits.Nevertheless, discover your main purpose of buying a property/land in Cambodia first before you can reach your desired end goals. As the saying goes, “A winning effort begins with preparation.”So, here comes the crucial question - What is the purpose of your land?2. Know Which Land Title Is For YouThere are no restrictions on the scale of the investments you can make in Cambodia. Furthermore, foreigners are allowed to exit at any point and sell the properties to anyone. Still, the only setback is that foreign nationals are constitutionally prohibited from obtaining soft titles and hard titles. Fret not; strata title, or private ownership in co-owned buildings, is what you should be looking for! Although it is less common in Cambodia, it is growing in number.Meanwhile, the rule applied to foreign buyers for buying a property is that it must not be on the ground floor of a building. Also, 30% of the other properties in the building shall belong to the locals.However, purchasing landed properties or high-rise units' ground floor is possible under a joint venture. You can do this by forming a company with a Cambodian citizen; while the local holds 51% of the shares, the foreign national holds 49% of the shares.3. Buying Land at the Perfect PriceWith more investors entering the Kingdom, Cambodia witnessed an increasing value and price in the country’s real estate market. Despite that, they are still affordable when compared to the average property prices in the world, even to its neighbours in Asia.Of course, the price of land depends on the location. Expect higher property prices in Phnom Penh, the capital city of Cambodia. Depending on the location, residential land would cost around $300 to $2500 per sqm, meanwhile commercial land would cost around $3000 to $8000 per sqm for foreign buyers.Price is cheaper in Siem Reap & Sihanoukville, but most people will invest in the capital city Phnom Penh. The well-performing residential property in the expat-friendly capital of Phnom Penh has gathered countless investors. The growth rate is much faster in the capital city than in the province.The same thing also applies to the building. Condominiums with strata titles should cost foreign buyers around $1000 to $3000 per sqm, depending on the location of the building.4. Getting Financial Assistance for Your InvestmentNowadays, interest rates are competitive in Cambodia. You may need to check the interest rates yourself as the conditions provided for each bank vary. But you can expect the financial rates to be from 6% to 8%, and the homebuyer can apply for a housing loan up to 80% of the property price. However, you cannot take a loan to buy land in Cambodia.Moreover, annual property taxes in Cambodia are reasonably low, making it more convenient for investors. Some of the taxes, such as the tax on capital gains, can be avoided by buying off-plan units. Off-plan unit refers to a pre or under-construction unit in a development. The benefit of purchasing off-plan units is that once the development is completed, you can choose units that have the most potential.5. Providing Important Documents for an Efficient Land OwnershipThe procedure for foreigners is becoming more straightforward, thanks to Cambodia’s open-door policy. The basic requirements are a passport, a business visa, and access to local banks. To buy land in Cambodia legally, you must set up a company with a Cambodian citizen. Therefore, the land will be registered under the company name. As for the process, it will be as complex and risky as you can imagine. Dealing with a local partner could go wrong. Check your partner's background thoroughly before proceeding.While researching how to buy land in Cambodia, you will always stumble on pieces of information that mention this statement, "You can purchase land via a nominee." It’s easier and cheaper. However, this is an act of ignoring the Constitutional prohibition on direct ownership of property by foreign nationals, which is illegal and strongly discouraged! While deciding on how to buy land and property, getting a good deal and a high return on investment must have come to your mind. Thus, here is the info you might need. The easiest and most preferable option among foreign buyers to indulge in Cambodia's real estate market is actually to buy condo units or commercial property that has a strata title.Still unsure how to start? Get help from professionals from a reliable property agency that can help you kickstart and ease your investment journey.IQI Cambodia is a qualified and reliable property agency that can help you achieve your end goals! Discuss how you should start your investment in Cambodia in-depth with our experienced property agents from IQI Cambodia![hubspot type=form portal=5699703 id=2380afe3-ad4c-4cfa-9abf-d3947e377bf2]