The Housing Development Association of Cambodia’s (HDAC) new partnership with the Trust Regulator (TR) will promote the Kingdom’s construction and real estate industries, foster private sector development, and aid in overcoming related challenges, according to TR director-general Sok Dara.
This comes amid rapid growth in the trust market, with at least 519 trusts having at some point been properly registered in Cambodia under the current regime, administered by seven licensed companies, with assets to the tune of “more than $1 billion” as of end-March, up from 492 trusts with assets worth around $734 million at end-2022, Dara revealed.
On May 26, a Memorandum of Understanding (MoU) on “Cooperation on Raising Public Awareness and Promoting Participation in the Trust Sector in the Kingdom of Cambodia” was signed between Dara and HDAC president Ly Hour.
A trust is a legal arrangement whereby a “trustor” – also called a “trustmaker” or “settlor” – grants another legal entity, the “trustee”, the right to collect, hold, manage and retain assets for the benefit of third parties, the “beneficiaries”.
The Law on Trust was promulgated on January 2, 2019 by Royal Decree No NS/RKM/0119/002, and supporting legal instruments have been issued thereafter, such as the January 26, 2022 Prakas No 003 FSA PrK on Rules for the Management, Establishment, and Functioning of Trusts.
Dara told The Post that other objectives under the MoU include providing platforms and additional avenues for business networking in the construction and real estate sector, supporting the housing development community, and – more broadly – encouraging socio-economic development as well as promoting the Kingdom’s potential.
Through the deal, TR also plans to establish an “Eco-System & Synergies System” and “ensure that linked strategic activities add value in the attraction of capital flows and maintenance of liquidity in construction, real estate, and housing development businesses”, he said.
The regulator “will create and seize new strategic opportunities in response to market trends and regional competition”, he added.
“The launch of the trust sector in Cambodia – as well as its regulator – is the result of meticulous consideration by the government. The number of legally established and registered trusts has increased to 519, with an asset volume exceeding $1 billion for the first time,” Dara affirmed.
Speaking at the signing ceremony, Hour stated that the MoU aims to create a framework for collaboration between the two institutions to mainstream and raise public awareness of the Cambodian trust sector, as well as encourage involvement in the field by HDAC members.
“In this framework of cooperation, the HDAC will join forces with the TR to widely spread the word about the trust scene in Cambodia – especially to members and cooperation partners involved in trust operations – along with the applicable laws and regulations as well as the industry standards of conduct,” he said.
Hour shared that 74 companies engaged in housing construction or development are members of the HDAC.