Leasehold vs Freehold in Cambodia – Differences, Benefits and Investment Risks

Leasehold vs Freehold

In 2025, Cambodia remains one of the most open real estate markets in Southeast Asia.
Both leasehold and freehold are legal forms of ownership, accessible to domestic and foreign investors alike.
Understanding the differences between them is crucial for anyone planning to purchase an apartment, land plot, or commercial property in Phnom Penh, Sihanoukville, or Siem Reap.

In this guide, we analyze in detail:

• the key differences between leasehold and freehold in Cambodia,
• which option is available to foreign investors,
• and the practical implications for property buyers.

Freehold – Full Property Ownership

Freehold represents the most complete form of ownership, allowing indefinite possession and management of property.
A freehold owner can freely sell, rent, or bequeath the property.

Freehold rules in Cambodia:

• ✅ Right to unlimited property ownership (for Cambodian citizens).
• ✅ Ability to transfer ownership between private individuals and companies.
• ✅ No time limit – ownership is perpetual.

💡 For foreigners, freehold is only available for properties in condominium buildings (Strata Title), in accordance with the Law on Providing Foreigners with Ownership Rights in Private Units of Co-Owned Buildings (2010).

📖 Source: CBRE Cambodia – Property Ownership Guide

Leasehold – Long-Term Lease

Leasehold is the right to use a property for a specified period – typically 15 to 50 years, with renewal options.
This model is frequently chosen by foreigners who wish to acquire a house or land plot but cannot own land outright.

Leasehold rules in Cambodia:

• ✅ Leases can run for a maximum of 50 years (with renewal rights).
• ✅ Foreigners can enter into agreements without a local partner.
• ✅ Properties can be rented out, leasehold rights can be sold, or bequeathed (if the contract permits).

💡 A well-structured leasehold provides full operational control over the property, even though the land remains owned by a Cambodian national.

📄 More: Knight Frank Cambodia – Legal Framework 2024

Leasehold vs Freehold – Key Differences

Factor	Freehold	Leasehold
Land ownership	Yes (citizens only)	No
Availability for foreigners	✅ condos only	✅ houses and land
Duration	Indefinite	15–50 years (renewable)
Inheritance	Yes	Depends on contract
Purchase cost	Higher	Lower
ROI (Return on Investment)	8–10%	9–12%
Legal risk	Very low	Moderate
Typical use	Apartment in Phnom Penh	Villa or land in Sihanoukville

Which Option to Choose – Leasehold or Freehold?

The decision depends on property type and investment strategy:

• For long-term investors – freehold condo in Phnom Penh provides full ownership and stable rental income.
• For vacation or short-term investors – leasehold villa or land in Sihanoukville offers lower entry cost and higher ROI.
• For entrepreneurs – leasehold allows operating a business without land ownership.

💡 In practice, many investors combine both models: purchasing a freehold condo while leasing land for a villa under leasehold.

How to Secure a Leasehold Agreement

• Include renewal rights in the contract (Renewal Clause).
• Register the lease with the Ministry of Economy (MLMUPC) – avoid private unregistered agreements.
• Ensure the contract includes full translation in both English and Khmer.
• Secure inheritance or transfer rights options.

Example of a secure contract: Cambodian Land Lease Template – MLMUPC 2024

Sample Property Prices (2025)

Location	Property Type	Model	Price (USD/m²)	Price in PLN	ROI
Phnom Penh (BKK1)	1BR Condo	Freehold	2,800–3,500	12,000–15,000 PLN	8–9%
Phnom Penh (Chroy Changvar)	2BR Condo	Freehold	2,200–2,800	9,500–12,000 PLN	9–10%
Sihanoukville (Otres Beach)	Villa	Leasehold	1,800–2,500	7,700–10,700 PLN	9–11%
Sihanoukville (Ream)	Land Plot	Leasehold	1,000–1,500	4,300–6,400 PLN	10–12%

Advantages and Disadvantages of Both Models

Aspect	Freehold ✅	Leasehold ✅
Full ownership	✅ Yes	❌ No
Longer ownership period	✅ Indefinite	❌ Limited
Lower entry cost	❌ No	✅ Yes
Ease for foreigners	✅ in condos	✅ broad options
Appreciation potential	✅ Stable	✅ Dynamic
Legal risk	✅ Minimal	⚠️ Contract-dependent

Summary

The difference between leasehold and freehold in Cambodia comes down to balancing full ownership with flexibility and lower entry costs.
For foreign investors, the ideal solution often proves to be a freehold condo in Phnom Penh combined with a leasehold villa in Sihanoukville – a strategy combining security with high ROI.

In 2025, both models remain fully legal and attractive, provided proper legal structure and registration are in place.

FAQ

Can a foreigner own freehold property in Cambodia?
Yes, but only in condominium buildings with Strata Title.

Can leasehold be renewed after 50 years?
Yes, most contracts provide for automatic renewal for another 50 years.

Can leasehold be sold?
Yes, leasehold rights can be transferred to another buyer.

Does Varsovia Estate help analyze ownership models?
Yes – we provide full legal and investment advisory services for clients from Poland.

About Varsovia Estate

Varsovia Estate is a Polish agency specializing in premium real estate in Thailand and Cambodia. We help investors analyze, purchase, and manage properties in Southeast Asia. We combine European service standards with local knowledge and experience. Our goal is to ensure clients receive maximum security and investment returns.