This is not a general investment recommendation. But that is why Cambodian property has so much potential. Simply put you can make a profit by investing in frontier markets that are not yet under the influence of foreign capital and large investment firms.
Top news outlets like Bloomberg or CNBC certainly don’t talk much about Cambodia. That’s a good thing. Although not everyone has discovered Cambodia, its GDP continues to grow at more than 7% a year.
Meanwhile, you can buy Cambodian property in Central Phnom Penh for just 1,000 per square meter. This is almost the same price as in less developed capitals like Karachi, Pakistan and Dhaka, Bangladesh. $ 1,000 per square meter is considered a global “destination” for real estate prices, and prices are unlikely to fall far below that level.
Cambodia’s economy as a whole depends on internal factors, such as the urban population rate and population growth, far exceeding the aspirations of the global economy. A growing middle class is evident to anyone who visits Phnom Penh.
New roads, ports and other infrastructure are under construction across the country. Economic diversification continues. Large multinationals, in the lure of low taxes and business friendships, are setting up shops and bringing high-paying foreigners with them.
More importantly, a nation not only moves forward but also moves forward with the atrocities of the yeast bully. The best days in Cambodia are beyond that.
More Details About Cambodian Property
The rules in the Cambodian law book are not necessarily how things work in practice. Some of the tips in this guide either don’t apply to the whole board or are more complex than they used to be. For example, the transfer of soft titles to the district level instead of the national level. The process and time frame vary depending on where you buy the property. Many “neighbourhood leaders” are notorious in their bureaucracy, asking for bribes unless you wait two months for a title transfer.
Significantly, the US dollar is the currency of choice for any purchase that is above a very small amount. This is clear to investors familiar with Cambodia, but probably not new to anyone. Buying real estate in US dollars is a positive and unique aspect of Invest in Cambodia.
Regardless of your own thoughts on the future of the dollar, it is better to show your assets in green back than other Asian currencies. Some Indonesian rupiah and Vietnamese dong have performed poorly over the years due to inflation.
How much are Property taxes in Cambodia?
The annual property tax is 0.1% of the market value of the property, which is more than 100,000,000 yeast rails. Needless to say, annual taxes in Cambodia are very low and often unpaid. Rental income tax for residents is 10%. Non-residents are taxed at 14% more on rental income. Different deductions may apply and rates may be significantly reduced.
Unused land is taxed at a rate of more than 2% of its market value each year. Because of this, you cannot “land bank” in Cambodia without paying unreasonable taxes. The purchase of land should be prepared immediately and used to generate income as soon as possible.
If you talk to locals you will find that most are not registered in the tax system. As such, Cambodia does not impose any of these taxes. It is recommended not to pay them in any way. It’s just a statement of fact and some insight into local practices.
How to perform renovation work in Cambodia?
But you need a contractor if you are doing renovation work. Let’s face it, sometimes in the developed world it is difficult to find an honest contractor who can be left in the border markets. Contractors in developing Asia may not always be up to international standards or they may just try to rip you off.
Finding a contractor based on references and local links is crucial. Honest, fair contractors are in Cambodia. But you need to know the right people and be aware of the local market.
How to Invest in Cambodia; Buy Property or Stocks?
You will hopefully understand why I recommend Cambodia. Now is the time to learn the different ways you can invest here as a foreigner.
Cambodia barely has a stock market. In fact, it currently has seven companies listed on its stock exchange. Many of these are semi-public corporations such as local water utility providers and port operators. There are also banks, property developers and other large companies.
Real estate in Cambodia is the better bet if you know what you’re doing. Most new condo projects are more expensive, yet shop house apartments are incredible deals in some areas.
Phnom Penh is one of the few capital cities in the world where you can buy property for less than 1,000 per square meter. I firmly believe that property values in Cambodia will only increase from here. Be careful if you are buying Frontier Market real estate. Because it is often difficult and demanding.
Between analyzing the local market in Khmer, navigating through an unfamiliar legal system, and finding reliable contractors, things are not always easy here. If you want to buy and maintain your property here, you must at least live in Cambodia.
Cambodia also has opportunities in private equity and venture capital. However, getting into it is much more difficult than buying a property. You have to be more discriminating with the help you render toward other people.
Investing in Cambodia is difficult. However, barriers to entry are sometimes a good thing if you are willing to break them. Entry barriers can help keep asset prices fair for at least a period of time, making it possible to invest in border markets “under the radar” in the first place.