Clarification Of Foreign Ownership Over Soft Titles, Sciaroni & Associates

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The following is a clarification released by legal firm Sciaroni & Associates:

Recently, the Phnom Penh Municipal Department of Land Management, Urban Planning and Construction issued letter No. 537 dated 25 May 2016 to all governors of districts.

This letter provides certain instructions to the Governors of all 12 districts within the Municipality of Phnom Penh in relation to the transfer of possessory rights to foreigners (excluding the ground floor) with respect to co-ownership buildings. The letter provides that district governors will no longer have authority to sign a transfer letter of possessory rights to a foreigner if the co-ownership building has been built without a construction permit.

There are two main points to note for foreign owners of immoveable property in Phnom Penh:

  1. Foreign purchasers of condominium units are eligible to obtain title in their name only in buildings that have been pre- approved for co-ownership (i.e., the building has been approved for strata title); and
  2. Foreign purchasers who have purchased apartment units not in co-owned buildings must comply with existing law which requires that the title be held in the name of a Cambodian national or entity with majority Cambodian ownership. Therefore, any form of title in the name of a foreign person or majority foreign-owned company that is not title to a unit within a pre-approved co-owned building must be transferred into the name of a Cambodian national or entity with majority Cambodian ownership in order to comply with existing law.

Please let us know if you have any questions regarding your current land-holding structure or if you seek a solution that complies with existing Cambodian laws.

Sciaroni & Associates professionals have decades of experience in providing advice to clients in all aspects of the real estate and construction industry in the Kingdom of Cambodia. Sciaroni & Associates’ Real Estate & Construction Practice Group provides advice on all aspects of conveyances, including drafting of purchase and sales agreements, due diligence, long term lease registration, hypothecs registration, construction permit, title conversion, property transfer, property consolidation, economic land concession and real estate license. The firm also completes title searches and coordinates the filing of legal documents for all types of real estate transactions.

Sciaroni & Associates, one of Southeast Asia’s leading professional services and investment advisory firms, has been providing skilled counsel and knowledgeable business insights for over two decades. Based in Cambodia, with legal offices in Laos and Myanmar, our experienced team of advisors brings considerable general and sector- specific expertise to the challenges confronting companies doing business in emerging markets. We are proud that our clients comprise many of the world’s premier companies, banks, financial institutions, governments and global development organizations.

For more information please visit www.sa-asia.com or contact us at info@sa-asia.com.

Porchhay Phoung Legal Advisor Head of Real Estate & Construction Practice Group

Porchhay has more than ten years experience of advising in relation to real estate and construction. He has advised global real estate developers, construction companies and foreign investors on their investments and projects in Cambodia. His areas of practice are real estate acquisition, lease, concession, hypothec registration, due diligence, construction contracts, and other related commercial transactions. He obtained a Master of Commercial Laws from University of Melbourne in 2015. Porchhay speaks English and Khmer.

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Daniel Noonan Legal Advisor

Daniel, an American lawyer, has advised on foreign direct investment, mergers and acquisitions and commercial regulatory matters in Southeast Asia since 2007. Prior to joining the firm, he advised investors entering Laos and Vietnam. Daniel has a law degree from the John Marshall Law School and has studied in Tokyo.

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