Cambodia Developer Due Diligence: What to Check Before You Deposit

Twenty percent against one hundred. That gap is the whole of developer due diligence in Cambodia. Twenty percent of construction cost is the minimum capital a developer must hold to qualify for the licence category that allows selling units while the building is still going up, while the category above it requires the full hundred. The reason it matters is blunt: a deposit wired into an off plan project is not a purchase, it is an unsecured advance to a construction company, repaid in finished concrete. Buyers spend weeks on the unit and minutes on the counterparty, yet every calculation about floor, view and price assumes the building is actually completed.

What the licence category tells you

Since late 2023, development licensing has run through the Real Estate Business and Pawnshop Regulator, under the Non-Bank Financial Services Authority, on a framework set by Sub-Decree No. 50 of March 2023 and Prakas No. 047 that followed it. Projects above thirty units, which covers essentially every condominium a foreign buyer would consider, need a licence from the regulator directly. Two categories exist. The first requires capital equal to the full construction cost and permits sale only once the building is complete. The second requires a minimum of 20 percent plus a business security guarantee letter from a licensed Cambodian bank, and permits sale during construction. Read as an investor, a developer selling off plan under the second category is funding the rest from somewhere else, and which source, in what proportion, is the question that matters before the wire goes out.

Three documents to ask for

• The licence or permit, with its category, issue date and expiry, since licences are renewed annually until completion and a lapsed one is a conversation
• Audited annual financial statements, which licensed developers file with the regulator within three months of year end, ideally for two consecutive years
• The dedicated project development account every licensed developer must hold at a Cambodian commercial bank, and confirmation that your payments are directed to it

Reading the balance sheet

• Current assets against current liabilities, since short term bills met only by future sales are a forecast, not a position
• Customer advances as a share of total liabilities, which show how far the building is financed by the buyers waiting to move in
• Land carried at cost against market value, separating real embedded equity from land bought at a peak on vendor finance
• Debt maturity against the handover date, because a facility maturing before completion needs refinancing at the worst moment
• Related party receivables, money owed by affiliated entities that is present on paper and absent from the site

Ask before the deposit, because afterwards the questions become requests. A developer who answers freely has told you something, and one who treats the list as unusual has told you something else. Where you can, tie the payment schedule to verified construction milestones rather than calendar dates, which hands some of the timing risk back to the party that controls the timing. Off plan pricing is a discount for two things at once, time and counterparty risk, and only one of them appears on the price list. Reading the accounts first is not caution, only completeness, and we would always pair it with independent legal and financial advice before you commit.