Sihanoukville Foreign Condo Ownership: First Floor Rule Explained (2026)

Sihanoukville: First Floor and Above – What It Really Means in Practice

The "first floor and above" rule is the most important legal filter affecting every foreign buyer purchasing a condo in Cambodia. It's simple in theory, but in practice it determines what you're actually buying, how easily you can rent it out, and whether you'll be able to sell it without a discount.

In short:

A foreigner cannot own a unit on the ground floor or below ground level in co-owned buildings. However, they can own units from the first floor upward, provided additional legal conditions are met.

This isn't a local interpretation or "developer practice." It's explicitly written in Cambodian law.

Legal Foundation: Where the Restriction Comes From

The prohibition on foreign ownership of ground floor units stems directly from the Law on Providing Foreigners with Ownership Rights in Private Units of Co-Owned Buildings (2010).

Full text of the law (official government PDF):

https://cdc.gov.kh/wp-content/uploads/2022/05/LAW-ON-PROVIDING-FOREIGNERS-WITH-OWNERSHIP-RIGHTS-IN-PRIVATE-UNITS-OF-CO-OWNED-BUILDINGS_100524-.pdf

The law clearly states:

A foreigner cannot own:
Units on the ground floor
Units below ground level (basement, parking, storage)
A foreigner can own:
Private units from the first floor upward
A maximum of 70% of private unit floor area in a building can be foreign-owned

This means the ground floor always remains in Khmer or Cambodian entity hands — even if the developer's marketing suggests otherwise.

What Exactly Qualifies as "Ground Floor" in Cambodian Practice

This is one of the most common points of confusion.

In Cambodia:

Ground floor = the level that has direct contact with the ground
First floor = the level above the ground floor, even if:
The building has an elevated lobby
Parking is partially open
The main entrance is higher than street level

Therefore, what matters in documents is the floor number in the title deed, not "how it looks."

This is hugely significant for Sihanoukville projects, where:

Ground floors are often:
Retail shops
Hotel lobbies
Parking areas
Some developers sell "low floor" units with misleading terminology

Always verify:

Floor number in the strata title
Floor plan approved by authorities
Designation in the building's hard title

Why This Rule Actually Impacts ROI and Liquidity

On paper, it looks like a purely legal detail. In practice, it changes the investment mathematics.

1. Resale Liquidity

Units from the first floor upward:

Are fully transferable to another foreigner
Don't require complicated legal structures
Sell faster in the secondary market

"Ground floor" units (if offered at all):

Eliminate 80–90% of foreign demand
Are purchased primarily by local investors
Almost always require a 10–25% price discount

2. Short-Term Rental

In Sihanoukville:

Short-term tenants prefer views
Ground floor = no view + noise + security concerns
Difference in ADR (average daily rate) is often -15% to -30%

Real rate examples (2025):

Studio floors 1–3: $30–40 USD/night
Studio floor 10+ with view: $45–60 USD/night

Rental trend sources:

https://www.numbeo.com/property-investment/in/Sihanoukville

Marketing Myth: "Ground Floor Is Fine Because It's a Condo"

This is one of the most dangerous myths.

Developers sometimes say:

"It's still a condo"
"It's only technically ground floor"
"You can sell it locally later"

The problem is:

A foreigner cannot be registered as the owner
Foreign banks won't finance such units
The secondary market is dramatically narrower

In practice, this means:

Lower exit price
Longer selling time
Greater buyer negotiating pressure

How the "First Floor and Above" Rule Affects Layout Selection

In Sihanoukville, more and more projects have:

Elevated lobbies
Parking on 2–3 levels
First "residential" floor only at level 4–5

This is beneficial for foreigners because:

All apartments meet the legal requirement
Views and ventilation are better
Street noise is minimized

But only when:

You have this clearly documented
Parking levels are formally designated as common area
Floor numbering isn't "creative"

Costs Investors Forget About

The ownership rule also indirectly impacts costs.

Price differences (2025/2026):

Ground floor / low floor: $1,200–1,600 USD/m²
Floors 1–5: $1,600–2,100 USD/m²
Floor 10+ with view: $2,200–2,800 USD/m²

Market sources:

https://www.globalpropertyguide.com/Asia/Cambodia/Price-History

https://www.realestate.com.kh/buy/sihanoukville/

These differences aren't cosmetic — they directly affect:

CapEx
Rental rates
Exit price

Sihanoukville in 30 Seconds – The Most Important Fact

If a unit doesn't meet the "first floor and above" requirement, it's not a real investment asset for a foreigner, regardless of price and marketing promises.

The Most Common Myth About Sihanoukville – Debunked

Myth: "Ground floor is cheaper, so the ROI will be better anyway."

Reality:

The lower entry price is eaten up by:

Weaker demand
Lower rental rates
Worse exit liquidity
Ultimately, risk grows faster than ROI.

3 Facts You Must Know

The "first floor and above" rule is statutory, not contractual.
Units that don't comply have permanently lower liquidity.
The strata title document is more important than the sales brochure.

Investor Checklist (Part 1/2)

Is the unit formally above ground floor in the documents?
Are parking levels designated as common area?
Does the building maintain the 70% foreign ownership limit?
Is the strata title issued or in process, not just "planned"?
Are you planning to exit to another foreigner or to the local market?

Sihanoukville Market Examples: When "First Floor and Above" Saves the Investment

In Sihanoukville's secondary market in 2024–2026, there's a clear pattern. Units complying with the "first floor and above" rule sell faster, with smaller discounts, and without legal complications.

Example A – 28 m² studio, 12th floor, strata title

Purchase price: approx. $62,000 USD ($2,214 USD/m²)

Secondary market selling time: 4–6 months

Discount vs. asking price: 5–8%

Example B – 30 m² studio, ground floor (Thai/Khmer ownership)

Purchase price: approx. $48,000 USD ($1,600 USD/m²)

Selling time: 12–18 months

Discount: 20–30%

Buyer pool: almost exclusively local investors

In practice, the difference in liquidity eats up all the apparent savings from buying ground floor.

Listing and trend sources:

https://www.realestate.com.kh/buy/sihanoukville/

https://www.globalpropertyguide.com/Asia/Cambodia/Price-History

Most Common Documentation Errors (And How to Catch Them)

Error 1: "This is the first floor because parking is below"

If parking isn't formally part of the common area, and the unit is still listed as ground floor — a foreigner cannot be the owner.

Error 2: No Final Strata Title for the Entire Building

A promise that "strata title will be issued" isn't sufficient.

Until it's issued:

You don't have full ownership rights
You can't safely sell the unit
Foreign banks and notaries avoid such transactions

Error 3: Exceeded 70% Foreign Ownership Limit

If a project has sold more than 70% of private area to foreigners:

Additional units must go into the Khmer quota
Even if they're "on a high floor"

Legal foundation (government law):

https://cdc.gov.kh/wp-content/uploads/2022/05/LAW-ON-PROVIDING-FOREIGNERS-WITH-OWNERSHIP-RIGHTS-IN-PRIVATE-UNITS-OF-CO-OWNED-BUILDINGS_100524-.pdf

Floor Impact on Rental Income and Real Numbers

In Sihanoukville, the floor has a direct impact on revenue, not just comfort.

Short-term rental (2025/2026):

Ground floor / low floor: $25–35 USD/night
Floors 6–10: $40–50 USD/night
Floor 15+ with sea view: $55–70 USD/night

Annual difference (at 55% occupancy):

Low floor: ~ $5,000–6,000 USD
High floor: ~ $8,500–10,500 USD

Demand data sources:

https://www.numbeo.com/property-investment/in/Sihanoukville

https://www.statista.com/statistics/asia-tourism/

How Developers Try to "Bypass" the Rule

Marketing tricks you need to know:

"Raised ground floor"
"Mezzanine level"
"Commercial floor with residential use"

All these terms are meaningless if:

The unit in documents = ground floor
There's no strata title right for foreigners

What matters exclusively:

Floor plan approved by authorities
Designation in the hard title
Compliance with the 2010 law

Hidden Costs of Choosing the Wrong Floor

Buying a unit that doesn't meet the requirement generates hidden costs:

Longer holding period (frozen capital)
Higher maintenance costs (maintenance: $0.80–1.20 USD/m²/month)
Pricing pressure at exit
No access to foreign buyers

For a 30 m² apartment:

Maintenance: $290–430 USD annually
Lost selling time: real opportunity cost of several thousand USD

Sihanoukville in 30 Seconds – Key Fact (Continued)

Floor level isn't a technical detail, it's a legal, financial, and liquidity filter all in one.

Most Common Myth – Version 2

Myth: "You can always sell the unit to a local buyer."

Reality:

Yes, but:

The market is shallower
Prices are more negotiable
Selling time is incomparably longer

3 Facts You Must Know (Additional)

There are no exceptions to the "ground floor = no foreign ownership" rule.
Documents are more important than the sales description.
Floor level simultaneously affects legal rights, demand, and exit price.

Investor Checklist – FINAL (5 Points)

Does the unit have a strata title and is it above ground floor?
Are parking and lobby common areas, not private units?
Has the project not exceeded 70% foreign ownership?
Does floor numbering in documents match the building plan?
Are you planning to sell to a foreigner, not just the local market?

Investment Summary

The "first floor and above" rule in Sihanoukville:

Protects liquidity
Stabilizes ROI
Simplifies exit from the investment

If a unit doesn't comply, it's not an investment asset for a foreigner, just a compromise with elevated risk.

Sihanoukville: First Floor and Above – The Critical Foreign Ownership Rule in Condos (2026)