Law on foreign property passed - in Cambodia

[Mentors]

After less than three days of debate at the National Assembly and years of preparation, Cambodia’s long-awaited law on foreign property ownership was passed Monday morning, a development that drew positive reactions from the subdued real-estate sector.

 

The law – passed with 85 lawmakers in favour and 11 opposed – now awaits approval from the Senate and King Norodom Sihamoni, both steps that are considered formalities.

 

“This law provides for economic interests, social interests, legal interests and also the integration of Cambodia’s investment [environment] within a global and regional framework,†Minister of Land Management Im Chhum Lim said Monday, adding that it would stop the practice of foreigners’ buying property in the Kingdom under the names of Cambodians.

One of the drawbacks of this practice, Im Chhum Lim said, was the emergence of complex legal cases in which foreigners who “owned†property listed in a Cambodian’s name claimed to have had their assets stolen.

 

Analysts say the new law – which allows foreigners to own property so long as it is not on the ground floor of a building, even as owning land outright remains prohibited – is significant for a number of reasons, and expressed optimism that it will provide a boost to the sector after a difficult 18-month slide.

 

National Valuers Association figures showed Monday that residential property fell in price by 3 percent and commercial property by 2 percent in the first quarter compared to the previous three months, a sign that the depressed market has yet to bottom out following its rapid decline at the end of 2008.

 

“It increases confidence in the market.... It sets things within the law,†Daniel Parkes, Cambodia country manager of global property agency CBRE Richard Ellis, said Monday.

 

On Friday, CBRE, in conjunction with ANZ Royal and Indochina Research, released a survey in which 55 percent of potential buyers said they would wait more than two years to invest in the property market, with just 11 percent considering buying in 2010, an indicator of a sluggish year ahead.

Parkes said the new law will help spur foreign interest, and that those preparing to invest now will benefit from an upswing by 2011.

“The next six months are a good time to buy,†Parkes said.

Still, questions remain concerning exactly what form regulations on foreign property ownership will eventually take.

 

Though the draft wasn’t altered during debate in the National Assembly, previous drafts of the law stipulated that foreigners would be able to own only 49 percent of a building, guaranteeing majority ownership of at least 51 percent to Cambodians. However, that clause was withdrawn from the final draft debated by lawmakers. The only restrictions for foreigners, according to the law passed Monday, apply to ground-floor apartments and land ownership.

 

Therefore, under the law, a 10-storey building in Phnom Penh, for example, could in theory be 90 percent owned by foreign buyers, whereas, according to a previous draft, a foreigner could only own 49 percent, as is the case in Thailand.

 

[color:red]“Comparatively, it’s more appealing than Thailand and Vietnam†for foreign investors, Parkes told the Post.[/color]

 

Opposition Sam Rainsy Party lawmaker and spokesman Yim Sovann said he supported all components of the final draft except Chapter 2 Article 6, which permits foreign ownership of property in special economic zones. This could allow foreigners to run casinos, he said.

 

The SRP also remains concerned about how the law could affect land rights, Yim Sovann said, adding that the government should issue land titles along Cambodia’s international borders. The new law does not allow foreigners to own property within 30 kilometres of Cambodia’s borders with Thailand, Laos and Vietnam.

 

Sung Bonna, president of Bonna Realty Group, agreed that the law will help attract foreign investment to the sector.

“It’s a positive step,†he said Monday.

 

The government is, however, understood to be planning a sub-decree or prakas (edict) to establish the ratio of foreign ownership, making it easier to adjust than if it were enshrined in the newly passed law.

 

http://www.phnompenhpost.com/index.php/2010040637013/National-news/law-on-foreign-property-passed.html

 

[gobbledonk]

Interesting - when I was in PP, all the talk was about how the developers were rubbing their hands together in anticipation of massive foreign interest in real estate. I guess I was on the wrong side of the river, but I didnt see a whole lot that made me want to sign on any dotted lines, regardless of price. Warm people but a long way from Hua Hin in terms of scenic beauty IMO.

[WorldFun]

where's the benefit in that?

wow we may now own 'certain' condos, but like in LOS no land, no house no nothing

anyway for the willing there's always a way always were always will be despite the naysayers as usual

[gobbledonk]

WorldFun, Cambo has a reputation for being a country where money talks - as long as it goes to the 'right' people, I'm sure foreign interests are quietly buying up land all over Cambodia. Of course, that sort of thing would never happen in Thailand ...

 

(longtime staff member at Sharky Bar told me that the owner was returning from the US where he had lived for many years to take up residence in PP - as I said, there is definitely a sense that PP has turned a corner and being in the right place will make some folk very rich indeed. I guess time will tell)

[kamui]

WorldFun, Cambo has a reputation for being a country where money talks - as long as it goes to the 'right' people, I'm sure foreign interests are quietly buying up land all over Cambodia. Of course, that sort of thing would never happen in Thailand ...

 

(longtime staff member at Sharky Bar told me that the owner was returning from the US where he had lived for many years to take up residence in PP - as I said, there is definitely a sense that PP has turned a corner and being in the right place will make some folk very rich indeed. I guess time will tell)

 

"Money talks" is almost an understatement in Cambo. Except Angkor and the Palace in PP *EVERYTHING* is for sale. In PP they (who ever that is) sold the Art Academy, in Siem Reap they sold the police station.

 

Even though Angkor is not for sale the whole Angkor area is actually leased for decades to an Indian company and recently the Killing Fields were leased to a Japanese company. Of course some very high ranking Khmer are board members at these companies.

 

And as we know, Hun Sen has very quietly given away a part of Khmer soil to Vietnam...

 

All the 4-5 star hotels in Siem Reap are being build by foreign companies from China and elsewhere.

 

And more than even in LOS, money only talks if it is given into right hands. Transparency International ranks Cambo below LOS in regard to corruption.