With King Norodom Sihamoni’s signing of the foreign ownership law late last month, non-citizens can now officially own property above the ground floor.
Government officials, however, say some key details remain to be worked out before any purchases can actually go through under the law, which was adopted by the National Assembly on April 5.
“Foreigners now have the right to own the property without borrowing someone else’s name. They can buy, rent or sell. It’s up to them,” said Nonn Theany, spokeswoman for the Ministry of Land Management. “Previously foreigners did not have the right to buy apartments, so they used Cambodians’ names to buy it.”
By attracting foreign investment, she said the new law would also spur employment by creating more demand for construction workers and domestic help.
“After the time for growing rice, people can come to work in the foreigners’ apartments as service workers…and there will be more to do for construction workers,” Ms Theany said.
Developers who want to sell apartments to foreigners will first have to register their buildings with the Ministry of Land Management for co-ownership. Once properties are registered, the Ministry will then issue deeds assigning ownership of individual units. Before any of that can happen, the government must approve sub-decrees determining procedures for building registration and title issuance.
The government also has yet to decide exactly how much of a building foreigners may own. Previous drafts of the law capped the foreign stake in any building at 49 percent, though lawmakers removed the figure to have it settled by sub-decree.
Sek Setha, undersecretary of state at the Ministry of Land Management, who confirmed that King Sihamoni signed the law on May 24, said yesterday that a figure for what portion of a building foreigners can own had yet to be worked out.
Even with the sub-decrees approved, however, some realtors say fears of corruption could still stifle demand, at least at first.
“This is one of the worries that is related to the investor. This is why the government needs to work on this,” said Sung Bonna, president of Bonna Realty Group.
And despite the government’s vows to fight corruption, he added, “it will take more time for [investors] to feel comfortable.”
“If we want to attract more investors, we have to do the anticorruption,” Mr Bonna said.
David Parker, country manager for global realtor CB Richard Ellis, was more optimistic, saying he had never had to deal with graft in any deal he has overseen.
“Cambodia is very attractive to foreigners and the new law is part of that,” he said.
Ms Theany, the Ministry spokeswoman, insisted that the law is corruption-proof because it forces investors to make direct contact with the building owners.
“No bribe can take place with this law since the foreigner has to talk to the owner directly,” she said.
Other avenues do exist for prospective foreigners. They can, for example, gain the same ownership rights as any Cambodian through citizenship, though both Mr Bonna and Mr Parker said they had very rarely seen foreigners take that path. Non-citizens can also acquire leases good for up to 99 years, or buy land if they set up a company, Mr Bonna added, though Cambodians have to make up a majority of the shareholders.
The new law allows non-Cambodians to fully own property above the ground floor in co-owned buildings that are no closer than 30 km to the country’s international borders. However, foreigners may own property within that zone if it sits inside the industrial estate of a special economic zone.