European investors can operate land in Cambodia (Property development), or alternatively take advantage of the booming real estate market in co-investment with property managers or licenced REIT fund managers, legal solutions do exist.
1. Project Management Trust
In our precedent post as of 28.1.2023, we advise foreigners willing to own and operate lands in Cambodia to structure the acquisition and operating through TRUSTS. (Land Trust for land-only investments, or Project Management Trusts), with 5 main take-aways :
1. Tailorization/Flexibility of investor needs
2. Legal protection, as Trustees are regulated (<> nominee)
3. Control through a well-crafted Trust deed
4. Low cost of the Trust (mgt fee around 0.16% of the assets)
5. Access to local capital or land mortgages.
2. Joint Ventures ("JV")
Many landowners bought plots of lands in the early days and are a bit short of liquidity due to the recent pandemic. There is a high appetite from them to venture with foreign investors. Landowners bring their land to a new operational SPV in Cambodia (LLC), and foreign investors bring cash to finance the construction of the project, respecting the 51%/49% ownership rule inside the Cambodian LLC.
Co-investors often agree for a short-term exit strategy (3 to 5 years), with a MOC around 2. A Robust shareholder agreement and AOI are mandatory to prevent from any problems inside JV.
One single foreign investor may invest alone through a Project management Trust (see 1.) or in JV with a landowner, injecting cash through his oversea fund into a Cambodian operating LLC or Project Management Trust.
Singapore, the most advanced economy in the Asean region, has positioned itself as a facilitator and partner for this in addition to providing an ideal ecosystem for private capital flooding to ASEAN countries. On one side Singapore will not double tax your profits from Cambodia, and Singapore has also signed double tax treaties with most EU countries where foreign investors reside.
3. Co-investment
AI Consulting allow foreign investors to invest into existing projects with robust property developers with strong track records, through existing and low-cost feeding sub-funds in Singapore, with a minimum ticket of $ 250,000.
or alternatively to invest in RE funds managed by fully-licensed Property Fund Managers selected by us.
