INTRODUCTION
As of 2016, Some of Cambodian serviced apartments and rental offices are well maintained in service and building, and the owner will be responsible and bear the cost in the event of problems. However, you need a lot more attention in the event you lease an isolated house called as villa, a factory or a warehouse because there are mostly shoddy workmanship such as leakage in the drainage pipe and leaking roof etc.
On the other hand, ambiguous agreements are generally signed and which may lead disputes in the future since the real estate transaction has not been almost consolidated in this country. It is necessary to put the proper articles and sentences into your agreement in either kind of properties you rent.
Please keep paying attention until the agreement has been signed and the property has been handed over.
[ SECURITY DEPOSIT & KEY MONEY ]
Cambodia do not have any business practices to pay "key money" however there is "security deposit" to be fully returned in the event of move-out if there is no damage or loss intentionally or negligently.
HOUSE FOR LEASE
Serviced apartment is generally chosen from several types of houses by people from developed countries. The housing complex with furniture, fixtures, electric appliances and services such as cleaning, linen change, laundry, internet and cable TV is called as SERVICED APARTMENT. You can choose the type of serviced apartment in the city if you have more than 500 US dollars except taxes and utilities though 600US dollars could be better.
However, the rent differs greatly depending on the location, ages and presence or absence of swimming pool and gym. Most of expatriates stay in the prime area called as BKK1 (Boeung Keng Kang One). If your rent is self-pay, TTP (Toul Tom Poung), BP (Boeung Prolit), BKK2 or BKK3 (Boeng Keng Kang Two or Three) area would be a proper choice since those areas locate within 2 km from the prime BKK1. For your reference, we will show you the market price as of May 2016 however it may contain some exceptions.
MARKET RENTAL PRICE IN BOEUNG KENG KANG 1
| TYPE | SIZE (m2) | CLASS A | CLASS B | CLASS C |
|---|---|---|---|---|
| 1BED | 50 - 100 | 1,500USD | 1,250USD | 850USD |
| 2BED | 80 - 120 | 2,200USD | 1,400USD | 1,000USD |
| 3BED | 100 - 250 | 3,500USD | 2,200USD | 1,500USD |
MARKET RENTAL PRICE IN TOUL TOM POUNG
| TYPE | SIZE (m2) | CLASS A | CLASS B | CLASS C |
|---|---|---|---|---|
| 1BED | 50 - 100 | 1,000USD | 800USD | 600USD |
| 2BED | 80 - 120 | 1,200USD | 1,000USD | 750USD |
| 3BED | 100 - 250 | 2,000USD | 1,500USD | 1,200USD |
∗The above rate includes all the SERVICE FEE and VAT10% however except utilities such as electricity and water fee. We bring you for your inspection to only the apartments selected by our Japanese manager so you can live with safety and comfortably even in this developing country. Please feel free to contact us for your inquiries.
<< SIX PRECAUTIONS IN DETACHED HOUSE >>
∗Detached house means isolated house called as VILLA in this country.
1. Security
Security cost is usually borne by tenants and you need to contact with employment agency to get the guards to watch at your gate. If you try to let them watch properly all day for 24 hours, you also need to make efforts to manage it. As of today, not many villas have security cameras.
2. Power Generator
Most of villas do not have power generators. It differs up to area however blackout happens every week during the hottest season.
3. Maintenance
It is hard work to clean your swimming pool as well as water quality management. In the event of water leaking, you may get into disputes since most of agreement is very simple and ambiguous.
4. Sanitary Conditions
It is important to check if you can flash toilet papers into toilets and if it smells nasty. Generally speaking, there is no custom for local people to flush it into toilet. It is very rare to see bidet, made by TOTO except few of the latest condominiums as of today in May 2016.
5. Garden Maintenance
It is necessary to trim the garden regularly because weeds grow very faster under the climate of Cambodia. It is mostly borne by the tenants as well.
6. Clarification of Ownership
It is necessary to clarify the ownership structure of the properties as well as whether the title is registered in ministry level. It is not few cases that landlord assign an agent because landlord lives overseas, in which case, you have to see the original of Power of Attorney and it is recommended to meet the landlord itself at least one time.
<< Taxes when you lease residential properties in Cambodia >>
| CASE | VAT | WITHHOLDING TAX | FRINGE BENEFIT TAX |
|---|---|---|---|
| UNDER COMPANY NAME | PAYMENT IS OBLIGATED IN THE EVENT THE LESSOR IS VAT-REGISTERED. | PAYMENT IS OBLIGATED (10% OF RENT) | PAYMENT IS OBLIGATED (20% OF RENT) |
| UNDER INDIVIDUAL NAME BUT PAID BY COMPANY | SAME AS ABOVE | NONE | PAYMENT IS OBLIGATED (20% OF THE AMOUNT PAID BY COMPANY) |
| UNDER INDIVIDUAL NAME AND PAID BY HIM OR HERSELF | SAME AS ABOVE | NONE | NONE (HOWEVER, SALARY TAX UP TO 20% IS TO BE PAID) |
∗WITHHOLDING TAX:
This tax rate is 10 percent on the income from rental of movable and immovable and which is borne by owners originally however it is practically paid by tenants in Cambodia.
∗FRINGE BENEFIT TAX:
For fringe benefits, every month, the employer shall withhold and pay tax at the rate of 20% of the total value of fringe benefits given to all employees.
RESTAURANT or SHOP FOR LEASE
Properties for the purpose of restaurant or shop will be mostly either "FLAT" (terraced house) or "VILLA". The generic type of FLAT has 4 meters in width and from 15 to 30 meters in length variously. The rent is so reasonable from some hundreds US dollars that it is often used for the first base of start-up business. If wider property is required, jointed flats are useful. The width will be multiples of 4 meters such as 8 meters, 12 meters, 16 meters and etc. The VILLA has 20 meters or more in width which will be a merit in business however the rent has been increased to USD4,000 to 5,000 in the prime area like BKK1 as of today, May 2016.
OFFICE FOR LEASE
Generally speaking, most of our clients choose the space in a office building for reasons of maintenance and service. The monthly market rental price differs according to each location and grade from 10US dollars up to 40US dollars.
| GRADE | CLASS A | CLASS B | CLASS C |
|---|---|---|---|
| The unit price per square meter | 30 - 40USD | 20 - 30USD | 10 - 20USD |
∗It has mostly basic amenities such as Flooring Tile, Painted Wall, Lighting and Air-Conditioner. Not many but some offices are exceptionally furnished.
∗When you rent office properties, the following taxes are applicable. "COMPANY NAME" means company name locally registered in Cambodia. If you rent it under foreign company name, it is regarded as "INDIVIDUAL NAME".
<<Taxes when you lease commercial properties in Cambodia>>
| CASE | VAT | WITHHOLDING TAX | FRINGE BENEFIT TAX |
|---|---|---|---|
| UNDER COMPANY NAME | PAYMENT IS OBLIGATED IN THE EVENT THE LESSOR IS VAT-REGISTERED | PAYMENT IS OBLIGATED (10% OF RENT) | PAYMENT IS OBLIGATED (20% OF RENT) |
| UNDER INDIVIDUAL NAME BUT PAID BY COMPANY | SAME AS ABOVE | NONE | PAYMENT IS OBLIGATED (20% OF THE AMOUNT PAID BY COMPANY |
| UNDER INDIVIDUAL NAME AND PAID BY HIM OR HERSELF | SAME AS ABOVE | NONE | NONE (HOWEVER, SALARY TAX UP TO 20% IS TO BE PAID) |
Therefore, you need to clarify the followings:
1. Whether your budget is inclusive of taxes or not?
2. Whether the lessor register VAT or not?
3. Whether the rent offered by the lessor inclusive of VAT or not?
Those ways written hereby is based on practice in Cambodia and our research as of 1 Oct 2014. It might be complicated if you consider this for the first time. Please feel free to ask us.
<< If you are looking for VIRTUAL OFFICE >> In these days, the Cambodian government strictly carries out investigation to restrict legally suspicions companies and paper companies intangible through unexpected visit by tax officer after tax registration application is received, and which is supposed to be stricter after this. As of May 2016, there is no official government announcement to notify that VIRTUAL OFFICE is illegal. On the other hand, it could be strategically best choice to be VIRTUAL OFFICE for a limited time in the beginning of start-up. If you consider this, please feel free to ask us.
WHAT IS "VIRTUAL OFFICE"
One of office forms without actual office space. If you are going to register your company, the address and phone number are necessary to be registered. In addition to this, you may need "the meeting room", "your desk" and "admin staff" up to your demand.
LAND FOR LEASE
In principle, foreigners are not allowed to own the land regardless of individual or incorporated. However, long-term lease, concession and renewable short-term lease are permitted. Moreover, it is permitted to own properties on land and personal assets and also possible to collateralize those as guaranty of liabilities. (Amended Law on Investment; Article 16)
LEASE REGISTRATION FOR LAND:
It is available to register the leasehold of 15 to 50 years at maximum to the authority. In the case the landlord transfers the ownership to a third party under conditions of no lease registration, the lessee is not able to claim his/her leasehold rights, which needs a lot of attention.
LAND CONCESSION:
The Cambodian government has given foreigners to use the national land until the concession was terminated because the right and interest became too huge. The government decides the specific right on a case-by-case basis.
Reference: Land Lae by CDC (; Council for the Development of Cambodia)
http://www.cambodiainvestment.gov.kh/land-law_010430.html
For further details, please ask us through this inquiry form.
FACTORY or WAREHOUSE FOR LEASE
Factory for lease are scattered throughout all four points of the compass and the size differs variously from 500 square meters to 3,000 square meters. The rent per square meter is 2USD to 3 USD. Our clients sometimes set up the factories in the area except PPSEZ (; Phnom Penh Special Economic Zone) to avoid the high rent. On the other hand, there are few warehouses satisfying the standard required by companies from advance countries in security level, air-conditioning, hygiene perspective for example of the toilet so that we must need put some capital investment initially and additionally.
WHAT is SEZ (; Special Economic Zone)
SEZ refers to the special area for the development of the economic sector which brings together all industrial and other related activities and may include General Industrial Zones and/or Export Processing Zones. It has been introduced to Cambodia for the first time in December 2005. It has been developed in the suburbs of Phnom Penh and Sihanouk Ville, near the border of Vietnam and Thailand. The businesses in SEZ are given the preferential treatment as QIP (; Qualified Investment Project) and exemption of VAT (; Value Added Tax).
Reference: THE SPECIAL ECONOMIC ZONES by CDC (; Council for the Development of Cambodia)
http://www.cambodiainvestment.gov.kh/investment-scheme/the-special-economic-zones.html
For additional information, please ask us through this inquiry form.
CAR PARKING LOT FOR LEASE
Car parking spaces are available from USD50 and up for monthly use in the center of Phnom Penh. Parking a car on the street has been common in this country so that it is one of the biggest concerns of Phnom Penh municipality that the number of car parking lots is remarkably insufficient as of today, June 2016.
For additional information, please ask us through this inquiry form.
OTHER PROPERTIES FOR LEASE
If you are looking for a whole building for lease for the purpose of serviced apartment or office or any other leasing properties, please feel free to ask us.