Cambodia Promotes Legal Trust Framework to Bolster Investor Confidence

Cambodia is positioning its evolving legal trust framework as a key legal mechanism to strengthen investor confidence and facilitate foreign investment, with regulators and business leaders urging greater awareness and regulatory clarity to unlock its full potential. The message emerged during EuroCham Cambodia’s Breakfast Talk on Trust and Asset Protection, held at the Shangri-La Phnom Penh. Held on July 2 the forum brought regulators, legal experts, financial professionals and investors together to examine how trusts can protect assets, facilitate succession planning and provide foreign investors with a compliant pathway to hold property in Cambodia. The discussions reflected the government’s broader efforts to develop Cambodia’s financial and legal infrastructure as the Kingdom seeks to attract more long-term international investment. Opening the event, Serge Pak, vice-chairperson of EuroCham Cambodia’s Real Estate & Construction Committee and chief executive officer of Béton Block and Pave, noted that trust structures have become increasingly relevant as investors seek secure and transparent mechanisms to safeguard their assets. “A trustee fund is a great tool to use in order to protect investors’ life savings. So today’s event brings a lot of information and awareness to the public. We should have more of these events around this matter,” he said. Sok Dara, director-general of the Trust Regulator, explained that the government has strengthened Cambodia’s trust ecosystem and regulatory framework to support responsible investment. He noted that the trust sector has become an increasingly important component of Cambodia’s financial architecture by providing investors with greater legal certainty while contributing to sustainable economic development. A central focus of the forum was how Cambodia’s trust system enables foreign investors to participate in the country’s property market within existing legal restrictions. Under Cambodian law, foreigners cannot directly own land. However, licensed trust companies can hold immovable property on behalf of investors through registered trust arrangements, allowing investors to retain beneficial ownership and economic interests while remaining compliant with Cambodian legislation. Chheang Sokhary, director of the Department of Legal Affairs and Inspection at the Trust Regulator, explained that trusts provide legal protection for assets transferred into the arrangement once properly registered. “For individuals, families, or businesses who wish to protect their assets, a trust can be an effective legal arrangement. Under this arrangement, the assets of the trustor are transferred into the trust and managed by the licensed trustee on behalf of the trustor for the benefit of the beneficiaries,” she said. “The trust must be registered with the Trust Regulator to be valid, and once registered, the transferred assets become trust assets protected by law and the trust deed,” she added. The forum also explored the commercial applications of trusts beyond foreign property ownership. Proeung Sopheap, general manager of Phillip Trustee, presented case studies illustrating how trust structures are increasingly being used for estate planning, wealth management, asset protection and long-term investment strategies by both Cambodian and international investors. Panel discussions later examined how trusts can facilitate cross-border investment while addressing practical issues including taxation, regulatory compliance, operational costs and implementation challenges. Speakers agreed that although Cambodia has established a legal framework for trusts, continued cooperation between regulators and the private sector is needed to simplify procedures, improve public understanding and encourage broader adoption. Tax policy emerged as one area where businesses believe further clarification would strengthen confidence among investors considering trust structures. Diberjohn Balinas, tax partner at DFDL, suggested that additional guidance from the General Department of Taxation (GDT) would help resolve remaining practical questions surrounding trust arrangements. “Trust structures are increasingly being considered by investors as a vehicle for asset holding and succession planning in Cambodia. However, as Cambodia’s trust and tax frameworks continue to develop, further guidance from the GDT would help address remaining practical tax uncertainties, particularly for trustors and beneficiaries,” he said. “Before establishing a trust, businesses and individuals should carefully evaluate the tax implications to determine whether a trust is the most suitable structure for their objectives. At DFDL, we advise clients on tax aspects of trust arrangements in Cambodia, helping them navigate the associated risks, opportunities and tax consequences so they can make informed structuring decisions aligned with their business goals,” he added. The panel concluded that professional trust services are expected to play an increasingly important role as Cambodia’s investment environment matures, particularly in succession planning, wealth preservation and long-term capital investment. EuroCham Cambodia said it would continue facilitating dialogue between government agencies and the private sector to support the development of legal and financial frameworks that enhance Cambodia’s competitiveness as an international investment destination.