Cambodia’s relatively new Trust market is growing fast and has so far attracted investments worth $1.27 billion, according to Sok Dara, Director General of the Trust Regulator, yesterday.
Addressing a seminar on ‘Emerging Business Opportunities in the Trust Sector,’ organised by the Law Committee of the American Chamber of Commerce (AmCham), the Director General said that the number of Trusts registered has reached 810 since the Trust Regulator (TR) was established in 2021.
The Regulator has also so far provided licences to 10 trust companies, besides approving 15 commercial banks for providing safe-keeping and escrow services and 13 valuation companies for providing asset valuation services.
The ‘Law on Trusts’ was promulgated by a Royal Decree in 2019, introducing a new concept to Cambodia’s legal system, providing a framework for the creation and management of trusts in the country.
The decision was also based on the roadmap named Financial Sector Development Strategies 2011-2020 which was later updated to Financial Sector Development Strategies 2016-2015.
“What is also of significance is that the crucial role of the Trust sector in promoting investment, diversification, building resilience to crisis, and promoting digitalization in the financial sector is also emphasized in the recently launched Pentagonal Strategy-Phase 1 of the Royal Government as well,” Sok Dara said.
The law defines Trust as a legal three-party relationship where the first party, trustor or settlor, transfers his/her property or asset to the second party, known as trustee/trust company, who is a qualified and approved person (by no other than the TR), to manage, administer and safe-keep for the benefit of the third party, known as the beneficiary.
According to the Director General, the Trust market in Cambodia provides certainty, security and flexibility to the investors. “It provides security and certainty as it is legally well-regulated. It also gives flexibility to investors to transfer and manage their property,” he noted.
Speaking to Khmer Times on the sidelines of the seminar later, Sok Dara noted that 2023 was a good year for the Trust sector in the country as it could achieve remarkable growth. “We could see a growing confidence in the market with more trusts getting registered and more companies given licences,” he said.
Ruwan Hulugalle, Chair of the AmCham Law Committee, told Khmer Times that there is a growing interest in the Trust sector in the country and AmCham members are no exception. They want to find out more about the regulations that govern the sector, hence we organised this event,” he said.
Virak Prum, Chairman & Law Professor of CamEd Business School, gave a presentation on the legal framework for the Trust sector in the country.
A sizeable chunk of the funds invested in trusts in Cambodia came from foreigners, especially as investments in land. More and more foreigners have taken the trust route to invest in land in Cambodia as they are barred from directly purchasing land in the Kingdom.
According to the Constitution of Cambodia, adopted in 1993, foreigners cannot own landed property in the country. But they are allowed to purchase apartments or condominiums from the first floor upwards.
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