Legal Update: Prakas on Real Estate Service BusinessesSithisak Law Office
Issue: No. 006P/23 – 27 March 2023
On 27 December 2022, the Real Estate Business and Pawnshop Regulator (the “RPR”) of the Non-Banking Financial Services Authority (the “NBFSA”) issued a new Prakas No. 064 Or.S.H/ Pr.K on the Real Estate Service Businesses, which composes of 9 chapters and 60 articles (the “Prakas 064”). The Prakas 064 aims to determine the rules and procedures for the management and the control of real estate service businesses in Cambodia.
Comparison with the previous Prakas No.636
With comparison to the previous Prakas No. 636 MEF.PrK on the Management of Business for Providing Valuation Service and Real Estate Services dated 29 June 2017 (the “Prakas 636”), the following points have been significantly changed under the Prakas 064:
- The shift in the responsibility from the Ministry of Economy and Finance to the RPR of the NBFS
- The validity of the licenses and certificates has been reduced from 3 years to 1 year.
- The dispute settlement has been removed some procedures under the General Department of Financial Industry and Legal Counsel of the Ministry of Economy and Finance.
Type of Licenses and Certificates
All real estate service businesses shall have a license and/or professional certificate from the RPR prior to conduct any business activities. A license shall be issued to a legal entity engaged in the business of providing real estate services, while a professional certificate is issued to a qualified individual who practices in the real estate profession.
The license is divided into 3 types as follows:
- Real Estate Management License: Issued to a company or branch office that provides any real estate management services for a professional fee.
- Valuation License: Issued to a company or branch office that provides any valuation services to the customer for a professional fee.
- Real Estate Agency License: Issued to a company or branch office that provides real estate agency service on behalf of customer for a professional commission fee.
The professional certificate is divided into 2 types as follows:
- Professional Valuation Certificate: Issued to a qualified individual to practice their profession as an appraiser.
- Real Estate Agency Professional Certificate: Issued to a qualified individual to practice their profession as a real estate agency.
All types of licenses or certificates shall not be sold, rent, transferred, or secured on any obligations.
Fees and Validity of the License and Certificate
All types of licenses and professional certificates are valid for only 1 year and shall be renewed 30 days prior to the expiration date. Please refer to the table below for the further detailed information:
|Validity||Annual Contribution Fee|
|Real Estate Management License||500,000 Riels
Approx. USD 125
Approx. USD 35
|1 year||140,000 Riels
Approx. USD 35
|Real Estate Agency License|
|Real Estate Management License (Branch Office)||300,000 Riels
Approx. USD 75
Approx. USD 22.50
|1 year||90,000 Riels
Approx. USD 22.50
|Valuation License (Branch Office)|
|Real Estate Agency License (Branch Office)|
|Professional Valuation Certificate||200,000 Riels
Approx. USD 50
Approx. USD 15
Approx. USD 15
|Real Estate Agency Professional Certificate|
The Reporting Obligations of Real Estate Service Business Company
The company shall submit a monthly, trimester, semesterly, yearly report to the RPR in a timely and accurate, and other reports and information as required by the RPR from time to time.
The Change of Business Condition
Any change of business address, company name, shareholder, the board of directors, the license holder, or professional certificate holder of the company or branch office shall obtain an approval in principle from the RPR. The company or branch office shall submit the application form to the RPR prior to the change and shall pay the administrative fee in amount of 200,000 Riels (Approx. USD 50) per matter.
The Closure and Suspension of Business Activities
In case of the closure and suspension of business activities, the company or branch office shall submit the application form with the clear reason of such closure or suspension, among other required documents and information as stated in Article 24 and 25 of the Prakas No.064, to the RPR. The RPR shall approve or reject on the request of the company or branch office within 30 working days upon received the application form from the company or branch office.
All disputes in relation to the real estate service businesses, any party may file a complaint to the RPR for reconciliation and negotiation before referring the dispute to the arbitration or competent court, except for criminal offenses.
Any company and individual who is not comply with the rules and conditions under the Prakas No.064 shall be subject to the following administrative sanction:
- Issuance a written notice or warning letter;
- Prohibition on some operation or restriction on some activities;
- Temporarily suspension of license or professional certificate;
- Revocation of license or professional certificate or closing down of business activities;
- Publicly disclose the violation acts;
- Other measurements in accordance with the applicable laws.
A company operating or providing real estate services without a license shall be punishable by a fine from 5 million to 10 million Riels and has to stop its business operations immediately.
The article is merely for general information purposes. It does not constitute legal advice on the subject matter. If you have any questions or need any assistance, please feel free to contact us:
+855 12 885 870
|He has more than 10 years of professional experiences in corporate, commercial, investment and capital market sector in Cambodia. He has leaded a legal counsel team to advise and assist Royal Railway Plc., Golden Tree Plc., one of the biggest commercial banks in Cambodia and one of the biggest telecommunication service providers in Cambodia in conducting legal due diligence and restructuring for their proposed bond issuance: plain, guaranteed and green bond issuance and listing;
He also advised and assisted Phnom Penh Autonomous Port, Acleda Bank Plc., DBD Engineering Plc, one holding company in real estate sector and two other companies in their proposed listing at Cambodia Securities Exchange (CSX) through IPO.
|Dr. CHHAK Limchheang,
Senior Legal Advisor,
Deputy Head of Real Estate and Construction Practice Group
+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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