5 Simple Steps to Invest in Cambodia

5 Simple Steps to Invest in Cambodia

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 property

Aside 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. 

  1. Purpose of Land
  2. Land Title
  3. Land Price
  4. Financial Help
  5. Important Documents

1. Find Your Purpose in Buying Land

land for sale in cambodia

From 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 You

strata title lmap

There 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 Price

cambodia phnom penh

With 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 Investment

cambodia financial rate interest rate

Nowadays, 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 Ownership

document to buy land in cambodia

The 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!

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