DEVELOPERS have tipped a sub-decree allowing foreigners to own up to 70 percent of a condominium complex to boost Cambodia’s real-estate and construction sectors, despite a mellowing of the proposal from an initial draft.

Approved by the Council of Ministers on Friday, the sub-decree provides a 70 percent cap on the proportion of a housing development a foreigner can own.

The figure has fallen from an 80 percent limit set out in a draft presented by the Ministry of Land Management, Urban Planning and Construction last month, but remains far higher than the 49 percent earmarked in early versions of the foreign ownership law last year.

“The decision ... was to grant a greater percentage share to Cambodians and not make foreign ownership too dominant,” Nonn Pheany, spokesperson for the Land Ministry, said yesterday.

Despite the change, she billed the sub-decree as a starting point in encouraging foreign investors to push development forward.

Land and house prices in Cambodia have dropped between 40 to 60 percent from those recorded at the peak of the housing boom in early 2008.

Bretton Sciaroni, senior partner of Sciaroni & Associates and legal adviser to the government, said yesterday that the sub-decree had opened up

Cambodia’s economy to new opportunities.

“It would help Cambodia in a number of ways, not just to generate more long-term businesses but also to attract new outside investors,” he said.

He hinted that the move would help make Cambodia an attractive regional proposition, as the sub-decree is more “open” than housing laws in neighbouring countries.

In Thailand, foreigners are allowed own just 49 percent of a building.

Developers at Phnom Penh’s satellite cities also welcomed the government’s move yesterday, expressing hope that it will develop the market by boosting sales – as the number of investors able to buy into property increases.

“We expect that through the provision, more foreigners will consider Cambodia,” said Touch Samnang, project manager at the capital’s Diamond Island complex, yesterday.

Sung Bonna, president and CEO of Bonna Realty Group, also felt the sub-decree would make Cambodia a more attractive proposition to foreign investors.

But he warned that the sub-decree alone was not enough to secure FDI for the Kingdom's economy.

“Cambodia needs to grant more incentives to investors in various sectors,” he said.