When investing in land in Cambodia, buy the land from a private owner, a business owner, or a land banking company. In Cambodia, land investment is active even among the Cambodian people, and transactions are carried out one after another at a fast speed. We also handle a variety of land, but for foreign investors, we mainly guide the purchase of land through land banking companies.
What is land banking?
Land Banking is an asset management that makes a profit by investing in land that will be developed in the future at the undeveloped stage. A safe and secure historic business where many wealthy individuals have built wealth, including former US President Donald Trump and Li Ka Shing, the founder of the Cheung Kong Business Group, known as Hong Kong’s largest conglomerate.
The scheme is very simple, the classic “buy undeveloped land for future development at a low price, raise the price of the land itself as the development plan progresses, and resell the land higher than the purchased price” it is called Real estate investment scheme.
What is a land banking company?
The land banking company is a company that collects information from the administrative agency that has jurisdiction over the area, purchases undeveloped land to be developed at a low price, and divides the remaining land while owning about 20% of the land and commercializes small items and sells them to investors. The land will be improved along with the development plan of the surrounding area to create and increase the value, and finally the development situation of the surrounding area and the land price of the main road running in parallel will be taken into consideration in a complex manner, and the land price will be sell doubled of the cost of land ownership.
By investing in the land lots of land banking companies, you can reduce the trouble of investigating foreign land by yourself, clarify the owner, and eliminate the problem of registration procedure. We connect overseas investors including Japan with local land banking companies, and support.
What is a nominee contract?
In Cambodia, in order for foreign nationals and companies to own land, they must either own it jointly with a Cambodian national company or individual, or use a nominee system in the name of a Cambodian national company or individual. If you own it jointly, you can set up a joint venture with a Cambodian capital of 51% or more. However, we recommend the nominee system because of the maintenance and management costs of the company.
“Nominee” means “name agent” and is a system often used overseas where the name of another person can be registered in real estate. You may feel that it is a bad thing to use the name of another person, but the purpose of this system is to protect the personal information of real estate investors and officers / shareholders of affiliated companies, and fraudulent transactions due to misuse of information There is a background to avoiding damage. As a result, it is a system that is often used for overseas real estate investment it can clear the restrictions on foreigners in real estate ownership.
Since real estate investment using the nominee system is permitted in Cambodia, nominees are offered in various places. We have partnered with the trusted CANA TRUST CO., LTD to support foreign investors in land ownership. We do not recommend providing nominees from companies whose actual situation is unknown or individuals whose identities cannot be fully confirmed, and our support is also not covered.
What is CANA Trust?
CANA Trust (CANA TRUST CO., LTD) is a subsidiary of the Canadian Bank of Cambodia, a major commercial bank established by Cambodian Canadians and the Central Bank of Cambodia, as a way for foreigners to own land in Cambodia that provide a trust service that owns the land on your behalf.
Canadia Bank also has business alliances with Mizuho Bank of Japan and Bank of Tokyo-Mitsubishi UFJ. It has an 18-story commercial building (CANADIA Tower) on the main streets of Monivong and Russian Boulevard in Phnom Penh, and the office of Cana trust is on the 3rd floor of the CANADIA Tower. When signing a Nominee Trust Agreement with Cana trust, we will also open the Canadia bank account.
Advantages and disadvantages of choosing land
Since real estate is a physical asset, it is an investment destination that is not easily affected by market fluctuations such as inflation. If you buy land instead of a building, you will have the following advantages.
Maintenance costs can be reduced
Even if maintenance costs such as taxes and management costs are incurred, you can continue to own it with less funds than a building. Therefore, as long as you secure the ownership, you can use the land at your own timing.
Can have assets that do not deteriorate over time
It is inevitable that the building will deteriorate over time and will need to be repaired if it is in use. We also have to consider the risks of natural disasters such as natural disasters and fires. If it is land, there is no need to worry about the disappearance of assets or the decrease in asset value due to them.
No vacancy risk
There is no “vacancy risk” on land, which is said to be a typical risk in real estate investment. Since all the risks peculiar to the building are eliminated, it will be easier to maintain overseas. Land banking land investment mainly aims at capital gains, so the labor and stress of maintenance during ownership is minimal compared to buildings.
Disadvantages of choosing land
Disadvantages of choosing land include the tendency for funds to be expensive and the determination of profitability. If you are looking for a vast land for business, we will thoroughly scrutinize these and guide you to the candidate site, but if you are only aiming for investment, you can avoid these disadvantages by use a land banking company.
Land banking companies invest in undeveloped land, so the risk of price drops is low. Since the land banking company purchases the land already purchased by the land banking company based on the development information from the government agency, the trouble of determining the profitability can be reduced. In addition, since it is commercialized by dividing it into lots, you can select the land within your own financial range.
If it is a building, you can aim for both income gain and capital gain, and if it is land, you can aim for capital gain, which has the advantage of making maintenance very easy. You can aim for capital gain, which has the advantage of making maintenance very easy. You can make more diversified investment in Cambodia real estate investment, so why not consider it as an option?