In recent years, Cambodia has attracted massive investment from various countries due to several favorable factors such as a stable political situation, no foreign exchange control, and a younger and cheaper labor force. These factors lead to high economic growth in different sectors such as agriculture, manufacturing, trading, and real estate. According to the statistics, the average growth rate of the Cambodia economy from 2011 to 2018 is about 7%, ranking first among ASEAN countries. Of all the industries, real estate is the most popular investment in the country. In just a few years, Phnom Penh, the capital city of Cambodia, is full of office buildings and skyscrapers. The surrounding suburban land prices have been soaring at a rate of 10% to 20% per year, attracting many overseas investors scrambling for a piece of the action. However, according to the Cambodian Land law, foreigners cannot own land, shophouse, flat house, or any real estate connected with the ground. Therefore, in the past, foreign investors used to search for a local natural person or business partner to hold the land title to solve the problem. Although a local partner can smoothly carry out the landholding problem, some issues might happen, such as unreasonable commissions, taxes, and hidden charges. High transaction costs also affect investors’ willingness to buy properties in Cambodia.
The Cambodian Trust Law was officially promulgated in January 2019, hoping to create an investment environment where buyers and sellers of real estate can feel at ease. The government also enacted regulations on trust registration in August of the same year. The Trust law enables the Cambodian trust industry to comply with legal regulations, resolve the investing disputes caused by the old nominee services, and re-build overseas property buyers’ confidence in investing in Cambodia. After continuous communication with the SECC and MOEF and optimizing the product structure, the first one-million-dollar land trust was officially applied by Stronghold Trustee at the end of 2020 and completed on March 15, 2021. The trust registration certificate is shown below: (The registration be considered successful only when obtaining the trust registration certificate)
The trust asset of this case is a land plot located on Hun Sen Blvd., Phnom Penh. We designed the structure with the foreign property buyer as a beneficiary, allowing the buyer to invest in land and under the protection of the Cambodian Trust Law at the same time to enhance the investing confidence.
The launch of the Cambodian Trust Law allows investors to choose the right investment targets without worrying about the legality of investment and the safety of the property. However, the most important thing is to find a Trust company that is legally operating with a Trust license and a professional operating team to ensure the safety of your property. Stronghold Trustee is a Trust entity approved by the Cambodian Government and the Securities Regulatory Commission (SECC) and established in accordance with the Cambodian Trust Law. We specialize in trust services, including land trust, construction trust, fund trust, escrow, and other customized solutions. Our management team combines public-listed companies in Taiwan and professionals with years of experience in finance, real estate, law, and other fields. It is the best partner for foreigners to invest in Cambodia!