Many people have already invested in property overseas, often showing real foresight by choosing Cambodia, which has strong growth potential. Many are now starting to collect their units one after another. Hong Kong buyers tend to like both waiting for a property to appreciate and collecting rent along the way. So how do you actually rent out a property in Cambodia, and what should you watch for? Here is an overview of the letting process and points to note.
As the market has developed, Cambodia’s rental and sales markets have gradually matured, and there are now several different ways to rent out a unit. Besides going through the building’s own property management company to find tenants, an owner can also go directly to a local agency. Phnom Penh, Cambodia’s capital, which draws the most overseas investors, already has fifty or sixty property agencies operating across different districts. The general letting process is as follows:
The Letting Process in Cambodia
- The agency helps the owner understand current market conditions
- The owner provides the following information about the unit and the asking rent: a) The sale and purchase agreement (“SPA”) or a Hard Title (similar to a Hong Kong property deed) b) The owner’s identity card or passport
- The agency verifies identity and prepares the letting documents
- The owner signs the following documents to let the unit out (different agencies use slightly different documents; the following can be taken as a reference): a) A power of attorney (“Power of Attorney”): authorising the agency to let the unit b) A letting agreement (“Rental Agreement”): giving the agency detailed instructions for letting the unit c) A lease (“Leasing Agreement”): the contract between owner and tenant
The contract must be in Khmer at minimum, with a Chinese or English version alongside it, so that a foreign owner or tenant can also understand it.
What to Know When Signing a Cambodian Lease
A) Sign using a blue ballpoint pen and a blue ink thumbprint (right thumb)
B) Check the furniture inventory in the unit (“Unit Stock List”) — if the tenant causes any damage, they compensate the owner at the item’s stated value on move-out
C) Sign the key handover form (“Key Receive Form”) — the tenant must return the keys on move-out
Tenant Responsibilities and What Tenants Should Know
A) Once a tenant confirms a unit, they must pay a deposit equal to two months’ rent
B) The tenant must provide a personal passport plus proof of employment or a labour card
C) Confirm the move-in date, and sign the lease and pay the rent and deposit at least one day before moving in
D) If the tenant fails to complete the agreed lease term, this is treated as a breach of contract, and the deposit is not refundable
Owner Responsibilities and What Owners Should Know
A) The owner pays a commission calculated proportionally to the length of the lease term — for example, for a six-month lease, half a month’s rent; for a one-year lease, one month’s rent
B) If the tenant fails to complete the agreed lease term, this is treated as a breach of contract, and the owner is not required to refund the deposit
C) To protect the owner’s interests: rental income in Cambodia is subject to a 10% withholding tax, withheld by the tenant (whether an individual or a company) at the time rent is paid; the rate rises to 14% only where the landlord is a non-resident taxpayer — the distinction is based on the landlord’s residency, not the tenant’s type
The above covers the general letting process and points to note in Cambodia. As you’ll notice, the process in Cambodia is broadly similar to many other countries and also carries legal protection. But after letting the unit out, how do you actually collect the rent? Next time, we’ll look at which Cambodian banks are available, and how to collect rent through an online account.
Have a question about this guide? Leave a comment below, or ask Zagdim directly.
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