New Rules Guiding Real Estate Service Businesses Issued

Overview

Seeing rapid improvement in the real estate sector in Cambodia and with the creation of the new Real Estate and Pawnshop Business Regulator of Cambodia, the Non-Banking Financial Services Authority (“NBFSA”) issued Prakas No. 064 on Real Estate Service Businesses (“Prakas 064”) on 27 December 2022 to update and replace the current regulation Prakas No. 636 on the Management of Real Estate Evaluation and Real Estate Service Businesses dated 29 June 2017. On a reading of the new Prakas, we understand that the NBFSA is aiming to set more standard and strict procedures to regulate real estate service businesses in Cambodia.

Comparison with the previous Prakas

The first notable change is the shift in the responsible authority from the Ministry of Economy and Finance to the Real Estate and Pawnshop Business Regulator of Cambodia, a regulator under the purview of the NBFSA.

In addition, there are more detailed terms that further regulate real estate service businesses in Cambodia and provide a safer and more regulated environment for both service providers and their customers. Another significant change of note is that the validity of the licenses has been reduced from three years to only one year.

What are the types of real estate service licenses?

Prakas 064 expressly provides rules and procedures to obtain each of three types of real estate service licenses, as follows:

• Real estate management license: For companies or branches that conduct a for-profit real estate management business.
• Real estate evaluation license: For companies or branches that conduct real estate evaluations  for profit.
• Real estate agency license: For companies or branches that provide real estate agency services for profit.

How to apply

To apply for one of the above licenses, the representative person must obtain the relevant  qualification certification from the NBFSA, of which there are two types:

• Qualification certification as a real estate valuer
• Qualification certification as a real estate agent

Unprecedented condition: Prakas 064 now allows a company to have a branch that provides real estate services by requesting a separate license from the parent company. The conditions and requirements to obtain either of these licenses and the qualification certification for the representative person are detailed in the Prakas.

The table below shows the relevant fees to obtain the different types of licenses and qualification certifications:

Type	License Fee	Administrative Fee	Validity
Real estate management license	KHR500,000 (approx. US$125)	KHR140,000 (approx. US$35)	1 Year
Real estate evaluation license	KHR500,000 (approx. US$125)	KHR140,000 (approx. US$35)
Real estate agency license	KHR500,000 (approx. US$125)	KHR140,000 (approx. US$35)
Real estate management license (Branch)	KHR300,000 (approx. US$75)	KHR90,000 (approx. US$22.50)
Real estate evaluation license (Branch)	KHR300,000 (approx. US$75)	KHR90,000 (approx. US$22.50)
Real estate agency license (Branch)	KHR300,000 (approx. US$75)	KHR90,000 (approx. US$22.50)
Real estate valuer qualification certification	KHR200,000 (approx. US$50)	KHR60,000 (approx. US$15)
Real estate agent qualification certification	KHR200,000 (approx. US$50)	KHR60,000 (approx. US$15)

In addition to the above fees, the NBFSA also requires companies to make an annual contribution as below:

• All types of licenses for companies: KHR140,000 (approx. US$35)
• All types of licenses for branches: KHR90,000 (approx. US$22.50)
• Both types of qualification certifications: KHR60,000 (approx. US$15)

The procedures for providing real estate services, and reporting and inspections are detailed in Prakas 064. An approval in principle from the NBFSA must be obtained for any corporate changes (e.g. address, name, shareholder, director, license holder, or qualification certification holder), suspension of operations, or dissolution, which is subject to payment of an administration fee of KHR200,000 (approx. US$50). 

Real estate service-related advertising is only allowed to be done by licensed companies. Prakas 064 specifies the minimum information that must be included in the advertising:

• Company’s license and/or ID number issued by the Real Estate and Pawnshop Business Regulator of Cambodia
• Company’s business objectives
• Company’s name, address, and phone number

Sanctions for non-compliance

• Operating without a license: KHR5 million to KHR10 million (approx. US$1,250 to US$ 2,500).
• Operating with an expired license or certificate:
  • KHR50,000 (approx. US$12.50) per day for 1 to 15 days
  • KHR100,000 (approx. US$25) per day for 16 to 30 days
  • KHR5 million to KHR10 million (approx. US$1,250 to US$ 2,500) per case if it continues for more than 30 days

• Other sanctions for breaching the rules and conditions under Prakas 064 are further detailed in Articles 46 to 57 of the Parkas.

What will happen to the licenses provided under the previous Prakas (No. 636)?

All valid licenses provided under Prakas No. 636 will continue to be valid until their expiration date.