Historical Overview of Property Ownership in Cambodia
Property ownership for foreigners in Cambodia has long been a subject clouded by misconceptions. The law is clear—foreign nationals cannot directly own land or ground-level properties under their own name.
Article 44 of the Cambodian Constitution establishes:
“All persons, individually or collectively, shall have the right to ownership. Only natural persons or legal entities of Khmer nationality shall have the right to land ownership. Legal private ownership shall be protected by law.”
Despite this restriction, legislative reforms have opened viable paths for foreign participation—most notably through strata title condominiums.
A glance at Cambodia’s land ownership evolution reveals how property rights have matured since the post-Khmer Rouge era:
1975–1979 (Khmer Rouge period): All land ownership was abolished, and property records were eradicated.
1980s–Early 1990s: The state held all land under collective ownership.
1992: The Land Law reintroduced private land ownership and introduced soft titles, issued by local commune authorities.
2001: A revised Land Law strengthened ownership protections and established hard titles, officially recorded at the national level.
2010: The National Assembly enacted the Foreign Property Ownership Law, allowing foreigners to own units above the ground floor in co-owned buildings, provided they constitute no more than 70% of total units.
2011: The new Civil Code formally introduced co-ownership, akin to strata title structures in Western jurisdictions.
Types of Property Titles in Cambodia
Since the 1990s, Cambodia’s property ownership framework has progressively evolved. Modern reforms now accommodate both Cambodian and foreign investors with increasingly transparent and secure title systems.
Soft Titles
Soft titles are the most prevalent and are recorded only at commune and district levels, not nationally. Transfers are swift—typically under ten working days—and costs are minimal.
Since 2024, the government has embarked on a nationwide initiative to convert soft titles into hard titles, integrating local properties into the national land registry. During this process, some land portions may be reallocated for state infrastructure projects, such as road expansions, which can increase the long-term value of the remaining land.
Owners transitioning from soft to hard title receive a hard title receipt, with the official certificate issued within one to two years.
Hard Titles (LMAP)
Hard titles represent the strongest form of ownership in Cambodia, officially registered with the Ministry of Land Management, Urban Planning, and Construction.
Transfers, processed through the cadastral office, typically require 12 weeks to finalize and incur a 4% transfer tax on the government’s assessed property value—considerably lower than market prices.
Co-Ownership or Strata Titles
Strata titles authorize shared ownership between Khmer nationals and foreign investors within co-owned developments. To qualify, properties must meet these conditions:
Applicable only to buildings constructed after 2010
Foreign ownership capped at 70% of total private unit area
Ground and basement floors excluded
Properties must lie beyond 30 km of national borders
Strata titles are registered at the national level with a standard transfer timeline of 12 weeks and a 4% transfer tax based on assessed value.
Mitigating Risk: The Role of Due Diligence
Buying property anywhere carries inherent risks—Cambodia is no exception. Conducting due diligence is essential to safeguard your investment and ensure seamless title transfer.
Due diligence verifies property legitimacy and seller claims. Because Cambodian transactions often require a 50% or higher pre-transfer payment, it’s crucial to confirm there are no legal encumbrances or ownership disputes.
A thorough investigation should include:
Verification of ownership authenticity
Confirmation of title type, boundaries, and address
Examination for encumbrances, mortgages, or legal conflicts
Measurement of registered property borders
Clearance from the tax department for outstanding obligations
This process involves cross-verifying details with village and commune chiefs, cadastral offices, and the tax authority. Professional due diligence typically costs around $650 and takes three days to complete—an invaluable safeguard for peace of mind.
CambodiaEstates.com strongly advises all clients to complete this process before finalizing any purchase, whether for hard or soft titled properties.
Legal Pathways for Foreign Ownership
Foreigners cannot directly own land in Cambodia except through strata-title condominiums. However, several legal mechanisms allow foreigners to secure property rights indirectly:
1. Nominee Structure
Used by nearly 90% of foreign buyers, this structure appoints a Khmer national as a nominee to hold the title. Security is ensured through legal agreements, including:
Mortgage Agreement – Registers the foreign buyer as the “lender,” preventing unauthorized transfers.
Loan Agreement – Establishes a binding loan contract to restrict nominee actions.
Lease Agreement – Grants the buyer long-term usage or rental rights.
Security Agreement – Defines the rights and limitations of both parties.
When established correctly, the nominee system is both cost-effective and secure.
2. Land Holding Company
A land holding company allows property ownership through a corporate entity. The foreign investor holds 49%, while a Khmer nominee holds 51% with a power of attorney granting full control to the investor.
Though secure, this method involves higher annual maintenance and tax expenses, making it ideal for large-scale investors.
3. Trust Deed
Introduced under the 2019 Trust Law, this structure allows licensed banks to hold titles on behalf of foreign buyers. The bank issues a Trust Deed certificate as proof of ownership.
Advantages include:
No transfer tax when selling to another foreigner, as the bank retains title.
Inheritance flexibility, allowing multiple beneficiaries without requiring a will.
However, annual maintenance fees apply to both the bank and the Trust Regulator.
4. Perpetual Lease
A perpetual lease grants long-term property control for 15 to 50 years, renewable indefinitely in 50-year cycles. Once registered, the lessee receives a Perpetual Lease Certificate, providing rights to develop, assign, or transfer the lease.
Key advantages:
Strong security of tenure
Ability to use the lease as collateral
No restrictions on foreign participation
Recommended Property Sale Process
Property transactions in Cambodia differ from many international norms. Over seven years of experience, CambodiaEstates.com has refined a three-step payment structure balancing fairness for both parties:
10% deposit upon signing the Sale and Purchase Agreement
40% interim payment when submitting title transfer papers
50% final payment upon receiving the new title
This sequence ensures equitable risk distribution—sellers receive partial payment once ownership transfer begins, while buyers retain leverage until the final title is secured.
The process is transparent, efficient, and proven to protect both buyers and sellers in Cambodia’s evolving property market.
