What Is a Nominee Agreement?

A nominee agreement is a contractual arrangement where a Cambodian national (the nominee) holds legal title to a property on behalf of a foreign investor. The foreign party retains control through a set of security contracts that define rights, responsibilities, and protections.

This structure is commonly used for:

• Hard-titled land
• Villas and landed homes
• Commercial properties not eligible for strata title

⚠️ Note: Nominee agreements are not required for strata-titled condos, which foreigners can legally own under Cambodian law.

Legal Framework: Article 44 and Land Law

Cambodia’s Article 44 of the Constitution states:

“Only natural persons or legal entities of Khmer nationality shall have the right to land ownership.”

This clause prohibits direct land ownership by foreigners, including:

• Individuals without Khmer citizenship
• Foreign-registered companies
• Dual nationals without Khmer legal entity status

As a result, nominee agreements have emerged as a workaround—not to circumvent the law, but to structure ownership-like control through legal contracts.

Key Legal Components of a Nominee Structure

To ensure enforceability and protection, a nominee structure typically includes:

1. Nominee Agreement Defines the relationship and responsibilities between the nominee and investor.
2. Mortgage Registration Filed at the commune and cadastral offices to prevent unauthorized sale or collateral use.
3. Power of Attorney Grants the investor authority to manage, lease, or sell the property.
4. Lease or Use Agreement Establishes the investor’s right to occupy or utilize the property.
5. Buy-Back Option Contract Allows the investor to reclaim title under specific conditions (e.g., nominee death, legal change).
6. Title Custody Agreement Ensures the original title is held by the investor or their legal counsel.

⚠️ Risks of Unsecured Nominee Structures

Legal Compliance Checklist

Here’s a step-by-step checklist to secure your nominee agreement:

1. Select a Trusted Nominee

• Must be a Khmer citizen with legal capacity
• Preferably unrelated to avoid conflict of interest
• Should have no existing debts or legal disputes

2. Draft Core Security Documents

• Nominee Agreement
• Mortgage Registration
• Power of Attorney
• Lease or Use Agreement
• Buy-Back Option Contract
• Title Custody Agreement

3. Ensure Dual Language Contracts

• Khmer and English versions
• Reviewed by Cambodian legal counsel
• Notarized and signed in presence of witnesses

4. Register Mortgage on Title

• At commune and cadastral offices
• Prevents nominee from selling or using title as collateral

5. Retain Original Title Document

• Held by investor or legal representative
• Ensures control over future transactions

6. Include Succession Clauses

• Define what happens if nominee dies or becomes incapacitated
• Appoint backup nominee or legal executor

7. Conduct Annual Legal Review

• Ensure contracts remain valid
• Confirm nominee’s continued compliance
• Update documents if laws or relationships change

Nominee vs Lease vs LHC vs Trust Comparison

Case Study: Structuring a Safe Nominee Agreement

Investor Profile: John, a UK national, wants to buy a villa in Siem Reap.

Challenge: Cannot own land directly due to Article 44.

Solution:

• John selects a trusted Khmer business partner as nominee.
• Drafts six security contracts with bilingual legal review.
• Registers mortgage on title to block unauthorized sale.
• Retains original title and adds succession clause.
• Conducts annual legal review with local counsel.

Outcome: John controls the property securely, leases it to tourists, and plans to convert to LHC if laws evolve.

Legal Expert Commentary (Educational)

“Nominee agreements are not inherently illegal—but they must be structured with precision. The key is enforceability. Without proper documentation, foreign investors risk losing control over their assets.” — Sokha Chan, Cambodian Property Lawyer

“We always recommend registering a mortgage on the title. It’s the most effective way to prevent unauthorized transfer or collateralization.” — IPS Cambodia Legal Team

Impact on Property Valuation and Resale

• Properties held under nominee structures may face valuation discounts due to perceived legal risk.
• Resale to another foreign investor requires contract transfer or renegotiation.
• Some buyers prefer strata-titled condos for simplicity and legal clarity.

FAQ Section

Is nominee ownership legal in Cambodia?

Yes, if structured properly with security contracts and legal safeguards.

Can the nominee sell the property?

Not if a mortgage is registered and contracts prohibit transfer without investor consent.

What happens if the nominee dies?

Contracts should include succession clauses or fallback nominee options.

Is this safer than a lease?

Nominee structures offer ownership-like control but carry more legal risk than registered leases.

Can I use a nominee for commercial property?

Yes, especially for hard-titled land or buildings not eligible for strata title.

Do nominee agreements affect tax obligations?

Yes. Investors may be liable for property tax, rental income tax, and capital gains tax depending on usage.

📞 Ready to Invest Confidently in Cambodian Property?

Navigating Cambodia’s real estate laws requires more than surface-level advice—it demands strategic clarity, local insight, and a deep understanding of investor risk. That’s exactly what Vichetr Uon brings to the table.

Whether you’re planning to acquire a condo, structure a nominee agreement, or evaluate industrial land opportunities in Kampong Speu, Vichetr provides actionable guidance tailored to foreign investor needs. His work blends real estate legal fluency with SEO-savvy content design, ensuring your decisions are both compliant and capital-efficient.

📧 Have questions or need personalized guidance? Reach out directly via contact form or email info@vichetruon.com and start your investment journey with confidence.

“Helping investors see Cambodia not just as an opportunity, but as a long-term growth partner.” — Vichetr Uon

🔗 Related Legal Guides

• Lease vs Nominee Ownership Structures
• Cambodian Constitution Article 44 Explained
• Understanding Cambodian Property Titles
• Real Estate Investment in Cambodia Pillar Page

Conclusion

Nominee agreements remain a popular route for foreign investors to access Cambodia’s real estate market—but only when backed by robust legal safeguards. By following this checklist and working with qualified legal counsel, investors can minimize risk and maintain control over their property assets.

As Cambodia’s legal landscape evolves, staying compliant ensures your investment remains secure, profitable, and aligned with national law. Whether you’re acquiring a villa, commercial space, or land for development, nominee structures—when done right—can unlock long-term value in one of Southeast Asia’s most dynamic property markets.