Investing in Cambodia: 7 Facts That Will Change Your Portfolio

Cambodia recorded GDP growth of 5.4% in 2024 - outpacing Thailand, Vietnam, and Malaysia. Phnom Penh delivered over 30,000 new residential units in the same period, and average net rental yields on premium condominiums exceeded 7%. For international investors seeking diversification beyond traditional Western markets, this country offers something increasingly rare: a fully dollarized economy with entry prices three to four times lower than Bangkok.

But Cambodia is not simply a cheaper version of Thailand. It is a distinct legal organism, with its own risk dynamics and a fundamentally different ownership structure for foreign nationals. This guide breaks the market down to its components - from specific districts to granular yield calculations.

Quick answer

• Transaction currency: US dollar (USD). Approximately 90% of real estate transactions are denominated in USD, eliminating Cambodian riel (KHR) exchange-rate risk
• Foreign ownership: restricted to condominiums on the first floor and above, under a hard title (strata title). Foreign ownership in any single building cannot exceed 70%
• Average price per sqm in Phnom Penh (2026): from $1,800 (economy segment, BKK3) to $4,500 (premium segment, BKK1)
• Gross rental yield: 6-9% in Phnom Penh, 4-6% in Siem Reap, 3-7% in Sihanoukville (wide range due to oversupply)
• Rental withholding tax: 10% for non-residents; no double taxation treaty exists between most Western countries and Cambodia
• Minimum entry capital: from $45,000 for a studio in Phnom Penh economy segment

Options and scenarios

Scenario 1: Phnom Penh BKK1 - premium corporate rental

BKK1 (Boeung Keng Kang 1) is the closest equivalent to Bangkok's Sukhumvit. It concentrates embassies, NGO headquarters, multinational offices, and the capital's finest dining. A two-bedroom condominium of 65 sqm in a Class A building is priced at $250,000-$300,000, generating rental income of $1,500-$1,800 per month.

Calculation for a unit priced at $280,000 rented at $1,650/month:

• Annual rental income: 1,650 x 12 = $19,800
• Property management and maintenance (approx. 15%): $2,970
• Withholding tax at 10% of gross income: $1,980
• Net income: $14,850
• Net yield: 14,850 / 280,000 = 5.3%

This is a solid result by regional standards. A comparable property in Bangkok's Sukhumvit is priced at $5,500-$7,000/sqm, with net yields rarely exceeding 4%.

Scenario 2: Phnom Penh BKK3 / Toul Tom Poung - budget expat rental

BKK3 is undergoing rapid gentrification. A 35 sqm studio costs $50,000-$65,000, with rental income of $450-$550/month. Gross yield reaches 9-10%, but resale liquidity is lower. The target tenant profile includes young IT professionals, English-language teachers, and remote workers.

Scenario 3: Siem Reap - tourism and short-term rental

Siem Reap - the gateway to Angkor Wat - attracts over 3 million tourists annually. Condominiums near Pub Street or Charles de Gaulle Boulevard are priced at $80,000-$120,000. Short-term rental platforms generate $600-$900/month in peak season (November to March), dropping to $200-$350 during the rainy season. Average annual gross yield: 5-7%.

Scenario 4: Sihanoukville - high potential, high risk

Sihanoukville experienced a casino-driven boom fueled by Chinese capital in 2017-2019, followed by a sharp correction and mass investor exodus. In 2026 the market is slowly stabilizing, but an estimated 15,000-20,000 vacant units keep prices suppressed at $1,200-$2,000/sqm. Investors with a 7-10 year horizon may find selective opportunities, but must accept an absence of liquidity guarantees.

Comparison table

Parameter	Phnom Penh BKK1	Phnom Penh BKK3	Siem Reap	Sihanoukville
Price per sqm (USD)	3,500-4,500	1,800-2,400	1,600-2,200	1,200-2,000
Typical studio price (USD)	150,000-200,000	50,000-65,000	80,000-120,000	40,000-60,000
Gross yield	7-8%	9-10%	5-7%	3-7%
Net yield	5-6%	6-7%	3.5-5%	1-5%
Resale liquidity	High	Medium	Medium	Low
Tenant profile	Corporates, diplomats	Expats, IT professionals	Tourists, digital nomads	Casino visitors, tourists
Oversupply risk	Low	Medium	Low	Very high
Airport access	Direct to Phnom Penh	Direct to Phnom Penh	Domestic flight from PP	Domestic flight from PP

Ownership structure: what can a foreigner buy?

Cambodian property law (Land Law 2001, amended 2010) prohibits foreign nationals from owning land. Three legal pathways are available:

1. Hard title on a condominium (strata title) - the simplest and most secure structure. The foreign buyer receives full ownership of a unit in a multi-storey building, provided the unit is above ground level and total foreign ownership in the building does not exceed 70%. Title is registered with the Cadastral Administration.

2. Leasehold - a land or property lease of up to 50 years, with an option to renew (commonly structured as 50+50 years). Popular for villas and landed houses. Legally binding, but requires careful contract drafting.

3. Nominee company structure - a Cambodian-registered company with a local majority shareholder. Technically legal, but carries a significant risk of losing operational control. Used by experienced investors with established local partners. Requires ongoing legal oversight.

For first-time international investors, the recommendation is clear: hard title condominium in Phnom Penh.

Tax considerations for international investors

Most Western nations - including EU member states - have no double taxation treaty (DTT) with Cambodia. This means rental income is subject to tax in both Cambodia and the investor's country of residence.

In Cambodia, the applicable rate is 10% withholding tax on gross rental income. In the investor's home country, this foreign-source income must be declared, and the tax paid in Cambodia is typically available as a credit under domestic proportional relief rules - though the specific mechanism varies by jurisdiction. Investors should verify the applicable rules with a qualified tax advisor.

On resale: Cambodia levies a 4% property transfer tax, typically split equally between buyer and seller. Any capital gain realized in the investor's home country may also be subject to local capital gains tax - for example, in many EU jurisdictions, gains on foreign property held for less than five years attract a standard income tax rate.

Investors considering a nominee company structure should also seek advice on Controlled Foreign Corporation (CFC) rules in their country of residence.

Risks and mistakes

Liquidity risk: the secondary market for condominiums in Cambodia is thin. Average time to sell in Phnom Penh is 6-18 months. In Sihanoukville it can exceed 24 months. A minimum investment horizon of 5-7 years should be assumed.

Developer risk: the sector is less regulated than Thailand. Construction delays, discrepancies with offering documents, and developer insolvencies do occur. A thorough check of the developer's track record and financial position is non-negotiable.

Oversupply in Sihanoukville: the city has some of the highest vacancy rates in Southeast Asia. Investing there without deep local market knowledge is speculation, not investment.

Absence of a double taxation treaty: with taxes applied in two jurisdictions, a headline gross yield of 8% can translate to an effective net yield of 4-4.5% after all deductions.

Political risk: Cambodia is a de facto single-party state. Regulatory changes can occur without advance notice, and the stability of the business environment is tied to political continuity.

Nominee structure risk: purchasing through a nominee company without professional legal supervision is the most dangerous mistake a foreign investor can make. A local nominee holding 51% of the shares can seize the asset entirely.

Currency risk at signing: despite the dollar-denominated economy, some developers price units in Chinese yuan (CNY) or Cambodian riel (KHR). Always negotiate and execute contracts exclusively in USD.

FAQ

Can a foreign national buy a condominium in Cambodia?

Yes. Foreigners can acquire a condominium under a hard title (full ownership), provided the unit is located above ground level and total foreign ownership in the building does not exceed 70%.

What is the cheapest condominium available in Phnom Penh?

In the economy segment (BKK3, Toul Tom Poung), studio units of 30-35 sqm start from approximately $45,000-$55,000.

What are the rental yields in Cambodia in 2026?

Gross yields in Phnom Penh range from 6-10% depending on the segment and location. After management fees and taxes, net yields of 4-7% are achievable with careful asset selection.

Are property transactions in Cambodia conducted in US dollars?

Yes. Approximately 90% of real estate transactions are denominated in USD. Cambodia operates one of the most dollarized economies in the world.

Is there a double taxation treaty between Cambodia and Western countries?

Most Western nations, including EU member states, have no DTT with Cambodia. Rental income must be declared in both jurisdictions, though foreign tax paid is typically creditable under domestic relief provisions.

How do you safely buy property in Cambodia?

Key steps include: verifying the hard title at the Cadastral Administration, conducting due diligence on the developer's history, engaging an independent lawyer (not one referred by the developer), and executing all payments in USD to a registered corporate account.

Is Sihanoukville a good investment in 2026?

Only for experienced investors with a 7-10 year horizon and a high tolerance for risk. Oversupply persists and market liquidity remains very low.

Can a foreigner buy a villa or house in Cambodia?

Not directly - foreign nationals cannot own land. A villa is accessible only through a leasehold arrangement (up to 50+50 years) or via a nominee company structure with a Cambodian majority shareholder.

What are the ongoing costs of owning a condominium in Phnom Penh?

Common area maintenance fees run $1.50-$3.00/sqm/month. Property tax is 0.1% of assessed value above $25,000. Building insurance costs approximately $200-$400/year for a standard unit.

How long does it take to fly from Europe to Cambodia?

Approximately 14-18 hours with one connection via Bangkok, Kuala Lumpur, or Doha. No direct flights from Europe to Cambodia are currently available.

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