Prime Minister Hun Sen presented Cambodian business opportunities to the Singaporean business community yesterday and highlighted the recently passed law allowing foreign ownership of condominiums as an area of particular openness to foreign capital.
Mr Hun Sen also told investors yesterday that Cambodia provides a vast array of investment opportunities in sectors from agriculture to natural resources, and informed the audience of investor-friendly laws, which allow for 100 percent ownership of a private company and, in some cases, long leases on land.
“The Council of Ministers issued a sub-decree…that allows the foreigner to buy 70 percent of the entire co-owned building,” Mr Hun Sen, in a live television broadcast from Singapore, told a packed room of investors and government officials at the University of Singapore during the second day of an three-day official visit.
“This new law is a modern development in the real estate sector,” he said, adding that investors would now have additional security over their residential assets in Cambodia.
“I would like to invite Singaporean businessmen who have never visited Cambodia to learn about the truth and take investment opportunities,” he said.
The foreign ownership law, which was adopted by the National Assembly on April 5, is one of the most investor-friendly laws of its kind in the region, analysts say. In Thailand, for example, foreigners are only allowed to own 49 percent of co-owned buildings.
But property developers said it could take some time before the real estate sector, which has seen prices fall by between 40 and 60 percent in Phnom Penh, reaps any benefit from foreign ownership laws.
Kheng Ser, a member of the project management team at World City, the South Korean firm currently building Camko City, a massive property development to the north of the capital, said that demand from foreign property buyers would be slow to take off.
“It at least provides us with better conditions for investment,” Mr Ser said. “But because of the global crisis it may take a little longer.”
Camko City will appeal more to the domestic market, Mr Ser said, adding that the demand from foreigners for units within condominiums was still a greatly unknown factor.
“Up until now there is no sign…of an increase in demand for buying a condo for foreigners,” said Paulina Puspasari, marketing manager for Grand Phnom Penh International City, a joint venture property project northwest of the capital between Indonesia’s Ciputra Group and Cambodia’s YLP Group.
Ms Puspasari said that many foreigners who choose to live in Cambodia still prefer to live in central areas inside town houses and villas and are more inclined to invest in land titles than ownership rights over an apartment.
According to a statement released by the Ministry of Foreign Affairs on Sunday, Mr Hun Sen is scheduled to meet with Singaporean President SR Nathan and Prime Minister Lee Hsien Loong during his visit.