2023-02-09 06:19:37
FAQ - Adaeng Land Co., Ltd

FAQ

FAQ

Frequently Asked Questions

Can Foreigners Own Land in Cambodia?

It is a common knowledge in Cambodia’s real estate industry that foreigners cannot own land property in the country. Under Article 44 of the Cambodian Constitution, “only natural persons or legal entities of Khmer nationality shall have the right to land ownership.” 

Yet, since Cambodia is a country that attracts a lot of foreign investors, the question is “are there ways for foreigners to own or have the rights to land properties in the Kingdom?”  

Luckily, THERE IS, be it for residential, commercial, or agriculture purposes, a foreigner can legally own or have a right to a land property under these methods: 

1. LEASING A LAND UNDER LONG-TERM CONTRACT [LEASEHOLD]

Foreigners or foreign entities are permitted to acquire control over Cambodian-owned property through a lease agreement. Entering into long-term leases will guarantee rights over property to foreign individuals and entities.  

Property lease agreements in the country may be termed for a minimum of 15 years up to a maximum of 50 years. The term of the lease can be extended for consecutive periods of 50 years . The lease contract can include a provision that the land would not be sold to anyone else without the lessee’s consent. This method is the simplest and provides some protection stating the foreigner’s legal rights to land property.

A perpetual lease may be registered against the title to the land being leased. Registration of the long-term lease with the relevant Land Office is not a condition of lease validity and there is no legal mandatory requirement to register the lease. Nonetheless, to help secure the foreigners’ land tenure and enforceability against third parties, perpetual leases should be registered against the title of the land with the relevant Land Office. Once registered, the relevant Land Office will issue a lease certificate to the lessee. The lease gives the lessee all the necessary rights to develop the land.

Moreover, a foreign bank or foreign entity can take security over real estate in Cambodia. In fact, it is very common for foreign lenders to set up a structure of securities in Cambodia, including security over real estate in order to guarantee payments. A borrower (local or foreign) can grant hypothecation over a long-term lease and such act can be recorded in the certificate of the long-term lease to serve as security for the payment of the borrower’s debt. 

2. INVESTING IN LAND THROUGH CONCESSIONS

Allowing a person or legal entity to occupy, utilize, and have rights over land property is called “land concession,” which is established under an agreement issued by government authorities.  

The most sought-after concessions are ELCs or Economic Land Concessions that are generally allocated for agricultural developments. Additionally, ELCs allow investors to clear land for industrial purposes. However, concessions are only limited to lands that are no more than 10,000 hectares. But likewise with the long-term lease, this method is granted through a 50-year concession and is subject to renewals. 

Application of such might take some time since the investors must apply for their rights to the land property through the Ministry of Agriculture. Thereafter, the Council for the Development of Cambodia, and representatives from the Ministry of Agriculture, and some relevant provincial government authorities will then need to approve the application, considering any potential social and environmental effects of the concession. 

After these departments have approved the concession, the office of the Prime Minister must sign and authorize the Ministry of Agriculture to formally conclude the concession agreement. The approximate timeframe to complete the process and grant the concession is usually between six and nine months. 

3. FORMING LAND HOLDING COMPANY/TAKING THE MINORITY STAKE

A foreigner may form a Land Holding Company (LHC) through a joint venture where the majority stake is a Cambodian and the minority stake of up to 49% is a foreigner. An LHC is legally able to purchase land and property in Cambodia. 

The 51% Cambodian shareholding can be held by 1 or more nominees who may, through a Power of Attorney and other legal instruments, give control of their 51% shareholding to the 49% minority foreign shareholder. Meaning to say, in setting up an LHC, the minority shareholder (which is the foreigner) has 100% of the rights to make the actions and decisions within the company. 

It is one of the lowest-risk options because the company and its assets can be configured to provide layers of security to the foreign shareholder or its lender. However, this approach carries the high registration fees, annual admin costs, and a potentially high tax burden when later disposing of the property asset.  

What Companies are considered "foreign"?

A company is considered to be “foreign” if it has a registered office in Cambodia and a foreigner owns the majority (51% stake) or 100% stake of the company. Likewise, a company is considered “local” or Cambodian if it has a registered office in Cambodia and a Cambodian national owns the majority (51% stake) or 100% stake of the company.  

Can a foreigner own a property (Considering they can't purchase land) in Cambodia?

Yes, they can. Although Cambodian law prohibits foreigners from owning land, they can legally own properties, be it condominiums, apartments, or offices, as long as it is not located on the ground floor of a building (and at least 30% of the other properties in the building are Cambodian owned). Such properties are commonly “strata-title.” The title is also protected with certain provisions that ensures that the property cannot be demolished or replaced without the foreigner’s consent or appropriate level of compensation. 

Are there any advice for foreign investors seeking to invest in Cambodia?

Investors must make sure that any land they intend to develop has been registered with the Ministry of Land Management, Urban Planning and Construction. A land that has not been registered will not be subject to the same legal protections which could result in investors losing control over the land without any legal recourse.

Does ADAENG LAND accept foreign investors?

ADAENG LAND CO., LTD is one of Private Limited Liability Companies registered with ministry of commerce of cambodia on October 21,2021. It does Real estate activities with own or leased property, Buying, selling, renting and operating of self-owned or leased real estate.

We are specializing on land purchase, land conversion and can hold the land for your foreign company. Presently, we are seeking investors who can invest with us on;

  1. Municipal water supply,
  2. Solar Farms,
  3. Smart Eco-friendly City, and
  4. One Stop Industrial Service Center.

Click here… to direct you to the project page.

What Should I do to invest with ADAENG LAND?

Any party wishes to enter a signed MOU to record the agreement in principle and obligations up to the establishment of a SPV together with all the necessary consents, approvals and licenses from the authorities of Cambodia subject to the provisions herein appearing.

ADAENG LAND party shall be responsible in:

(a) Securing all governmental consents, approvals, licenses and permissions relating to the establishment of the project from the relevant authorities of Cambodia. This include all necessary land and construction alienation matters, and specified documents as follows:

i. Govt’s Parent ministry – Project Approval or license.

ii. CDC Tax incentive and tax free of import materials.

iii. Local authority for conversion of land in accordance to the purpose of development to be carried out.

iv. Others ministries approvals, such as: Fire, environment, construction order approvals, and not limit to any others, as required.

(b) Purchase land, and rightful ownership, such as hard title of land, and transfer to SPV company.

(c) Set up a SPV company for operation, agreed on JV equity, terms of participation, responsibility and scope of works.

(d) Provide appointment and term of compensation agreement to your party.

Your party shall be responsible in:

(a) Provide detailed Project Proposal and assist to provide information for getting approvals mentioned.

(b) Provide financial statement to project.

(c) Introduce Financial and EPC Parties.

(d) Secure funding for this project.

(e) Provide assistance in securing EPC, audit and approve of design, construction implementation, material specification, schedule, costing.

(f) Provide business, operation and maintenance consultancy.

(g) Assist values contributing parities in forming an SPV and advise terms of collaboration.

(h) Option to own equity in SPV in case capital funding/investment raised from individual or corporation.

(i) Appoint EPC for the following:

i. Provide Engineering, Procurement, construction to this project.

ii. Provide installation and commissioning.

iii. Provide system commissioning approval from parent ministries. 

iv. Provide maintenance support proposal

v. Provide operation and management outline

vi. Provide training, operation procedure, and management consultancy.

Can I Ask You for Advice?

Feel free to question us any concerns you may have. You can find contact us page on the right corner of our website or email us via our address; adaenglandco@gmail.com if you feel troublesome on clicking on “Send Message” button.

Let's Find You Together The Place You Deserve

Our chairman, Uon Vichetr, can help you to find the place you deserve. He does land purchase and sale since 2012 a day after he finished money and you course in Malaysia. Now, he owns about 2,700 agricultural land. 

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