Cambodia mulls allowing foreigners to buy property

[Tony]

PHNOM PENH (AFP) — The Cambodian government is considering allowing foreign ownership of property such as apartments and office buildings to boost the country's economic growth, an official said Wednesday.

Under the current rules, foreign property investments can only be made through the name of a Cambodian national, and many are unwilling to risk losing their assets to unscrupulous local partners.

Information Minister Khieu Kanharith said the government is evaluating the policy to ensure that foreigners will be allowed to own buildings and apartments but not land.

"The important thing is that foreigners cannot own land... They can buy things above the ground only," Khieu Kanharith told AFP.

He said that the plan would attract more foreign investment and more skilled foreign workers to the impoverished nation.

"This policy will boost our economic growth," Khieu Kanharith added.

The move comes after the private sector last year urged the government to allow foreign ownership of certain properties like apartments or factories, saying a liberalised real estate market would spur the economy.

Cambodia's investment law was amended in 2005 to allow foreign ownership of buildings, but the legislation has yet to be implemented and the initiative has floundered.

Despite current restrictions, billion-dollar skyscraper projects and sprawling satellite cities promising to radically alter Phnom Penh have bloomed over the past few years.

They are mainly backed by South Korean companies working through local partners.

After decades of turmoil, Cambodia has emerged as a rising economy in the region -- posting average 11 percent growth over the past three years on the back of strong tourism and garment sectors.

But officials warn that the country, which still relies on international aid for half of its annual budget, must diversify by seeking more varied foreign investments.