Legal and Tax Updates

Issue: No. 013P/25– 04 July 2025

On 30 June 2025, the Ministry of Land Management, Urban Planning and Construction (the “MLMUPC“) issued an Instruction No. 002 on the Building Setback and Construction Permits under the authority of the Governor of the Municipal, Provincial, City, District, and Khan Administrations (the “Instruction”).

The Instruction provides two key guidelines:

• Standards for Building Setbacks; and
• Procedures for Issuing Construction Permits.

1. Building Setback Standards industrial in cities town and downtown areas

Areas with Existing Setback Requirements

In locations where building setbacks already exist and has been implemented, setbacks must follow the legally established alignment layout or land use map, especially where future road expansion is anticipated.

1. Areas without Existing Setback Requirements

Standard setbacks apply based on building height classification:

Buildings from Ground Floor to 8th Floor

• Front/Road-facing setback: minimum of 4 meters. Exception: In commercial or mixed-use zones, if the structure is column-based (no walls) and the ground floor is open for public pedestrian use, the setback may be reduced to 2 meters.
• Side and Rear setback: minimum of 2 meters.
• Narrow Lots:

• If the lot is less than 20 meters wide: side setback must be at least 10% of the lot width.
• If the lot is less than 10 meters wide: side setback must be at least 1 meter in case 1 meter setback cannot maintained due to the specific conditions of the land lot, the competent authority has the right to authorize construction directly at the property boundary or party wall.
  • Adjacent Residential Zones: minimum setback of 4 meters or must align with the row, height and design of existing neighboring building. Construction on both sides can extend up to the boundary or party wall.
  • Liability: Construction owners are responsible for any damage caused to neighboring buildings and must repair or reconstruct based on the actual damage.

Buildings from 9th Floor to 11th Floor: these buildings must comply with existing laws and regulations regarding setbacks and construction standards.

2. Procedure process for issuing a construction permit

     a. Permits issued by Municipal/Provincial Governors

(i). Applicants shall submit the construction permit application and required documents to the one-window service office under the authority of the governor of the of the relevant municipal or provincial administration.

(ii). The application is then forwarded to the relevant Department of Land Management, Construction, and Cadastral for review and reporting.

    b. Permits issued by City, District, and Khan Governors

(i). Applicants shall submit the construction permit application and supporting documents to the one-window service office of the relevant city, district, or Khan administration.

(ii). The application is then forwarded to the relevant Office of Land Management, Urban Planning, Construction, and Cadastral for review and reporting.

Disclaimer

The article is merely for general information purposes. It does not constitute a legal advice on the subject matter. If you have any questions or need any assistance, please feel free to contact us:

	NOEUM Sokvichhai, Partner, Managing Director sokvichhai.noeum@sithisak-lawoffice.com +855 12 826 785	Mr. Sokvichhai has more than 8 years of experiences in labour, corporate, commercial and investment advisory in Cambodia. He actively advices and assists various businesses in commercial, tax, and labour registration, business licensing, products registration & distribution, business recapitalization & restructuring, and mergers & acquisitions transaction. He also has particular experiences in advising collective investment fund and trust business, initial public offering, bond issuance, investment incentives & qualified investment project, and labour & employment related issues. Sokvichhai also assists major business in preparing various complex commercial agreements.
	Dr. CHHAK Limchheang, Partner, Head of Real Estate and Construction Practice Group limchheang.chhak@sithisak-lawoffice.com +855 89 813 160	He has several years of professional experiences in real estate-related transaction and construction sector in Cambodia. He has advised local and foreign clients on acquisition and disposal of residential, industrial and commercial properties, on commercial lease, factory perpetual lease, real estate joint venture development and FIDIC agreements. Recently, he led counsel to advise on both real estate and tax issues of real estate development project with an approximate investment portfolio of USD 40 million in Kampot Province. He is currently leading a legal counsel to advise a major domestic company in their joint venture property development with an investment portfolio nearly USD 200 million in Phnom Penh.

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