What Cambodia Developer Due Diligence Should Cover

Twenty percent. That is the minimum capital, measured against construction cost, a developer must hold to qualify for the Cambodian license category that permits selling units while the building is still going up. The category above it requires 100 percent. The distance between those two numbers is the whole subject of Cambodia developer due diligence, because a deposit wired into an off-plan project is not a purchase. It is an unsecured advance to a construction company, repaid in concrete.

Buyers spend weeks on the unit and minutes on the counterparty. Floor plate, view corridor, ceiling height, price per square meter, rental comparables. Every one of those calculations assumes the building gets finished. The documents that govern whether it does sit with the developer's finance department, and most of them are obtainable by anyone who asks in the right order.

What the license category already tells you

Since September 2023, development licensing has run through the Real Estate Business and Pawnshop Regulator, which sits under the Non-Bank Financial Services Authority. The framework comes from Sub-Decree No. 50, issued in March 2023, and Prakas No. 047, issued six months later across eight chapters and sixty-six articles.

The thresholds are worth knowing before the first site visit. Residential or co-owned building projects of three to thirty units are permitted at the capital-provincial level. Anything above thirty units requires a license from the regulator directly, which covers essentially every condominium a foreign buyer would consider.

Two license categories exist. The first requires capital equal to 100 percent of construction cost and permits sale only after the building is complete. The second requires a minimum of 20 percent of construction cost, plus a business security guarantee letter issued by a licensed Cambodian bank, and permits pre-sale during construction. Applicants also lodge a deposit of 2 percent of total construction cost with the regulator, calculated for the project or phase by phase, or supply the bank guarantee in its place. Land parcel developments run on separate thresholds, with minimum capital at 40 percent of infrastructure cost and a 5 percent business security deposit.

Read that as an investor rather than as a lawyer. A developer selling off-plan under the second category is, by regulatory design, funding the remaining 80 percent from somewhere else. Buyer deposits, construction debt, shareholder equity, or proceeds from a different project. Which of those, and in what proportion, is the only question that matters before the wire goes out.

Cambodia developer due diligence in three documents

The license or permit comes first. Category, issue date, expiry. Licenses are renewed annually until project completion, with renewal requested two weeks ahead of expiry, and any change to shareholder, board membership, company name, or project name requires prior approval from the regulator. A current license is a baseline rather than a distinction. A lapsed one is a conversation.

The audited annual financial statement comes second. Licensed developers file an audited annual report with the regulator within three months of fiscal year end. Cambodia's statutory audit rules apply in parallel to companies crossing thresholds of roughly KHR 4 billion in turnover, KHR 3 billion in total assets, or 100 employees. A developer building a thirty-million-dollar tower clears all three without effort. Ask for two consecutive years. The speed and completeness of the response is itself a data point.

The project development account comes third. Every licensed developer must open a dedicated real estate development account at a Cambodian commercial bank through which project transactions move. Buyers rarely ask which bank holds it or whether their payments are directed there. It takes one sentence in a meeting.

Reading the sheet itself

A developer's balance sheet is a delivery schedule written in numbers. Five lines carry most of the signal.

Current assets against current liabilities. If short-term obligations exceed liquid resources, the project is depending on future sales velocity to meet present bills. That is a forecast, not a position.

Customer advances as a share of total liabilities. Off-plan deposits are debt owed in units. When they dominate the liability side, the building is being financed largely by the people waiting to move into it.

Land carried at cost against current market value. Land acquired years ago at a fraction of today's pricing represents real embedded equity. Land purchased at peak on vendor financing represents the opposite.

Debt maturity against handover date. A construction facility maturing before practical completion needs refinancing at exactly the moment the developer has the least negotiating room.

Related-party receivables. Money owed to the project company by affiliated entities is capital that is present on paper and absent from the site.

The pattern worth understanding

Some mid-market development models run sequentially. Project three is completed using deposits collected on project four, which is launched on the strength of project three's visible progress. The structure functions well while absorption holds. It transmits stress efficiently when absorption slows, because a single soft launch affects a building already under construction rather than one still on paper.

Nothing about that model is improper, and larger developers with balance-sheet capacity or institutional funding lines are not exposed to it in the same way. The point is that the two structures look identical in a showroom and completely different in a set of accounts. Only one of those two is on display.

What to ask, and when

Ask before the deposit, because after the deposit the questions become requests. The short list is license category and current validity, audited statements for the last two fiscal years, the name of the bank issuing the business security guarantee, the source and maturity of construction financing, and a payment schedule tied to verified construction milestones rather than calendar dates. Milestone-linked payments transfer some of the timing risk back to the party that controls the timing.

A developer that answers all five without friction has told you something. A developer that treats the list as unusual has told you something else. Neither answer is a verdict on the project. Both are inputs.

Cambodia's development framework has been building a documentary trail since 2016, and the current version produces more disclosure than most buyers ever request. The regulation has already done the difficult part. The remaining work is asking to see what exists.

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.

The buyer who reads the accounts before signing is not being cautious, only complete. The work takes an afternoon and applies to every project a buyer will look at afterward, which makes it the cheapest research in the sequence and the only research that compounds.

At My First Corner, developer solvency is assessed before a unit is discussed, not after a client has chosen a floor. The conversation is available when it is useful.