Legal and Tax Updates

01 Feb

Legal Update: Prakas on Management of Real Estate Development Business

By Legal Update

Under Prakas No. 089 dated 20 January 2020 on the Management of Real Estate Development Business of the Ministry of Economy and Finance (“Prakas No.089”), any person who wishes to conduct real estate develop business either for purpose of selling or long-term leasing shall seek, in advance, License from Ministry of Economy and Finance (“MEF”) or Permit from Municipal/Provincial Department of Economic and Finance (“M/PDEF”).

Permit is applicable for:

  • the development of residential building or co-owned building with 4 to 30 houses, or 3 to 30 villas or 3 to 30 units; and
  • the dividing of land parcel having less than 1 hectare of land size.

License is applicable for:

  • the development of residential building or co-owned building with more than 30 houses, or more than 30 villas or more than 30 units; and
  • the dividing of land parcel having size of 1 hectare or above.

As required under the Prakas, Licence / Permit for the development of residential building or co-owned building, and the dividing of land parcel shall meet different application requirements. Furthermore, the License / Permit for development of residential building or co-owned building is divided into two types. One is for the fully completed construction project, and another one is for on-going construction project where selling happens at the same time. It also should be noted that pursuant to the Prakas, the real estate development Permit/License cannot be transferred or sold to other person. Moreover, prior approval from MEF or M/PDEF is needed in case of any change of the name of the development project, name of developer, name of shareholder, or name of holder of such License/Permit.

Pursuant to Prakas No. 089, the Ministry of Economic has taken furthers step to better manage the real estate development business in Cambodia, by prescribing more on the application procedure and requirements, advertisement about a development project, obligations of buyer and developer, required information to be included in sale and purchase agreement, and even on penalties in case of non-compliance.

If you have any question or need any assistance regarding the above matter including but not limited to application for the License / Permit and the preparing necessary legal documents for any real estate development project, please feel free to contact us at contact@sithisak-lawoffice.com or (+855) 23 6373 168.

 

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