The government is actively taking steps to allow foreign nationals to own property in Cambodia, with the Ministry of Land Management now drafting the legal framework, Information Minister and government spokesman Khieu Kanharith said Thursday.
In a move Khieu Kanharith said will increase the ease of doing business in Cambodia, foreigners will be allowed to purchase the title for 100 percent ownership of apartments and condominiums. Land, however, will remain off limits to foreign buyers, he said.
“[Foreigners] will be able to give it as heritage to [their] children,” Khieu Kanharith said in an interview at the Banking Cambodia 2009 conference in Phnom Penh. “We are preparing it already.”
“We don’t modify the Land Law. When you own an apartment, it’s not the land,” Khieu Kanharith said, adding that the Land Management Ministry is actively discussing the matter.
At present, foreigners can only gain a 99-year lease on apartments or condominiums. For years the government has internally disputed whether the 2001 Land Law, which prohibits foreign ownership of land, may permit foreigners to own the space above the land.
Lim Voan, Land Management Ministry undersecretary of state in charge of land titles, said his ministry is now studying the Land Law to find a way for foreigners to own apartments or condominiums.
The ministry’s legal department “is now studying the law, but I don’t know when it will finish. We need to find the threshold for foreigners. It might allow them to only own the building,” Lim Voan said by telephone Thursday.
“It’s always been known, it’s been no secret, that they’re talking about foreign ownership of apartments. This is one that everyone wants,” said Matthew Rendall, an attorney who specializes in real-estate transactions for Phnom Penh law firm Sciaroni and Associates.
Minister of Land Management Im Chhun Lim could not be reached for comment Thursday, but Rendall said that Im Chhun Lim gave attendants at this week’s Economist Group’s business roundtable the impression the government will start allowing foreign freehold ownership within two months.
Im Chhun Lim told attendants the government will propose two draft sub-decrees within the next two months: one for apartment ownership titles and a second clarifying that foreigners can purchase those titles, Rendall said by telephone Thursday.
“The impression one walks away with is that by mid-year both laws will be in place,” he said.
Acleda President and CEO In Channy said he was also in attendance at the Economist Group’s roundtable when Im Chhun Lim announced that the government is working on the sub-decree to allow foreigners to own apartments.
“Foreigners will not be able to own the land, but they will be able to own the apartment from the first floor up,” In Channy said by telephone Thursday.
Japanese and Korean investors have long lobbied the Cambodian government to allow foreign ownership of office buildings as well as condominiums. No Asian country allows foreigners to own land, but most Asian nations allow foreigners to own condominiums.
“We certainly think it’s imminent,” ANZ Royal CEO Stephen Higgins said by telephone Thursday.
Bretton Sciaroni, an attorney and government adviser, confirmed the government is “moving forward toward the creation of a strata titling system.”
“It would be a big injection of cash into the economy if foreigners could get ownership of condominiums and apartments,” Sciaroni said on the sidelines of Banking Cambodia 2009.
“If we want more investors, or more fast development, we have to allow people like foreigners, people who want a chance to own their property. When they come here to work for a long time, they want to own property. They don’t want to just rent, rent, rent,” Sung Bonna, president and CEO of Bonna Realty Group, said by telephone Thursday.
Total real estate transactions in Phnom Penh have slowed to an average of only one a day, down from about 100 to 120 in early 2008, Sung Bonna said.
“Our property market is slow now, but when we have this law it will help the real estate activity,” he said.