Sunday, 4 April 2010

Cambodia woos foreigners to help lift property sector

via CAAI News Media

By Elaine Moore in Phnom Penh

Published: April 3 2010

Cambodia is trying to encourage international investment by relaxing laws on property ownership by foreigners in an attempt to lift prices that have fallen as much as 40 per cent in the wake of the global recession.

Cambodia's draft law - which echoes an Indonesian move this week to review foreign ownership rules - is under discussion at the National Assembly and would allow non-nationals to fully own residential apartments on the first floor and above for the first time.

The first-floor rule skirts sensitive political and legal issues. Land and property ownership is particularly sensitive in Cambodia, where all land deeds were destroyed by the Khmer Rouge regime in the 1970s . Proprietary disputes are frequent as a result.

While resorts such as Phuket and Bali remain the most popular destinations for foreigners looking to purchase a holiday home in south-east Asia, Cambodia's lawmakers hope deregulation will lead to increased foreign investment in the country and help to pick the Cambodian property market out of the doldrums.

Unrestricted ownership of property by foreigners is uncommon in south-east Asia. In Thailand foreigners are permitted to own a condominium as long as the total foreign ownership of the building does not exceed 49 per cent.

However, investors interested in property in Laos and Vietnam can only purchase leases. In Cambodia, foreigners can lease property or set up a purchasing landholding company with a national citizen in which they have a minority shareholding.

However, with property prices under pressure across Asia, a number of countries are considering liberalising property laws. In November 2009, Vietnam clarified its foreign investment laws, which allow non-residents to lease apartments for up to 50 years.

Edwin Vanderbruggen, director of tax advisory firm DFDL Mekong, said the changes to Cambodia's property law would make it an attractive prospect in the region.

Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from and redistribute by email or post to the web.

No comments: