VLP Legal Press #41 : Foreigner or Local, Here's What Happens to a Person’s Cambodia Assets When They Passes Away
Oun and Miky run a garment manufacturing company together in Phnom Penh. Both of them holds equal shares in the private limited company.
Oun, a Cambodian national, owns the house he lives in and keeps his savings split across two local banks. He is married and is blessed with two daughters. They live with his parents.
Miky, a foreign investor, owns a condo unit in the city and has a bank account with a local bank too. He is single and has lived in Cambodia for 15 years. His parents have passed on but his siblings are currently residing in his home country.
Neither of them has written a will. One evening, over drinks, they start wondering out loud: if something happened to either of them tomorrow, what would actually happen to everything they have?
Question 1: If Oun or Miky in Cambodia passes away without a will, what happens to their assets?
Before going into this in detail, you should be familiar with a few technical terms:
“succession” concerns what happens to a person’s assets, property, money and belongings after they pass away.
“decedent” means the person who passed away, sometimes referred to as “the deceased.”
“successor” means anyone who is legally entitled to inherit from the decedent.
“descendants” means a person's children, grandchildren, and so on, anyone who comes after them in the family line.
“ascendant” means a person's parents, grandparents, and so on, anyone who came before them in the family line.
Under Article 1145 of the Civil Code, succession begins upon the death of the decedent and may be carried out in either one way:
Statutory Succession: according to the law; or
Testamentary Succession: the wishes of the decedent.
Where there is no will, the Cambodia's statutory succession rules (succession by law) under the Civil Code from Articles 1156 to 1167 apply.
The Civil Code establishes the following order of statutory successors:
First-rank successors (Article 1156): children of the decedent, whether biological or adopted. They inherit in equal shares.
Second-rank successors (Article 1159): the decedent’s lineal ascendants, such as parents or grandparents, if there are no lineal descendants.
Third-rank successors (Article 1160): siblings, if there are neither lineal descendants nor lineal ascendants.
Surviving spouse (Article 1161): the spouse is a successor in all cases and ranks equally with the other applicable successors. The specific division depends on who survives alongside the spouse, under Article 1162:
Spouse and children (descendants): the spouse and each child inherit equal shares.
Spouse and parents: the spouse takes one third, the parents together take two thirds. If only one parent is still living, that parent and the spouse split the estate equally, 50/50.
Spouse and other ascendants (e.g. grandparents, where no parents survive): the spouse takes half, the ascendants together take the other half.
There is also an important point about “marital property” which must first be separated from succession property. Under Articles 972 and 973 of the Civil Code, property acquired during the marriage is generally common property, except for certain separate property such as property owned before marriage or acquired by gift or inheritance.
Therefore, if Oun’s house, shares or savings were acquired during his marriage and constitute common property, his wife’s existing ownership in the common property is not itself inherited. Only Oun’s part of the common property becomes succession property.
👨🏻🦱 For Oun: because he has children, his parents do not inherit as statutory successors. His wife and two daughters would each have an equal share in Oun’s properties under Articles 1156, 1161 and 1162(a). However, the exact amount each receives from the house, shares and savings depends first on whether those assets are Oun’s separate property or marital common property under Articles 972 and 973.
🧔🏻♂️ For Miky: he is single, has no surviving parents, and has no children. His siblings therefore become his third-rank successors under Article 1160, and siblings of the same applicable category inherit in equal shares.
The nationality of the successor becomes particularly important where the succession includes land or other property subject to special ownership restrictions, as discussed below.
Question 2: Would writing a will in Cambodia have changed anything for Oun and Miky?
Yes. A valid will allows a person to determine how succession property should be distributed, subject to Cambodia’s rules protecting certain successors. The testator may:
designate the succession shares of co-successors through a will (Article 1182);
determine the manner in which the succession property is to be partitioned (Article 1183);
give all or part of the property to the designated successors, provided that the rules on legally secured portions are respected (Article 1184).
Cambodia's Civil Code recognizes five forms of will: a will by notarial document (Article 1173), a privately produced (holograph) will (Article 1174), a will by secret document (Article 1175), a will made in imminent danger of death (Article 1177), and a will made by a person in quarantine (Article 1178). In practice, only the first three, notarial, privately produced, and secret, are commonly used, while the latter two apply only to narrow emergency situations.
What is “legally secured portions” referred to in Article 1184? A minimum share of a person's estate that the law guarantees to their close family members, no matter what the will says. Even if someone tries to leave everything to somebody else, the law still protects this portion for these close family members.
Article 1230 provides legally secured portions for lineal (directly below, direct unbroken line) descendants, parents or grandparents, and the spouse. The legally secured portion is:
one-half of the decedent’s property where there are first-rank successors (i.e., spouse and children); or
one-third of the decedent’s property where the only successors are the second-rank successor (i.e., parents or grandparents).
Where there are several persons entitled to a legally secured portion, each receives that portion proportionately to his or her succession share.
👨🏻🦱 For Oun: A will could allow Oun to give much more specific instructions about how his succession property should be dealt with. For example, subject to the legally secured portions, he could designate particular assets for particular successors or make testamentary gifts to other persons.
He could also designate an executor of his preference to manage and implement the will. Article 1220 gives an executor the rights and duties to manage the succession property and perform acts necessary to execute the will.
However, Oun could not simply use a will to disregard the legally secured portions of his wife and daughters. Because his spouse and lineal descendants are entitled to a legally secured portion under Article 1230, any testamentary disposition that infringes those rights may be subject to the rules governing legally secured portions. The only narrow routes around this are disinheriting a specific heir through the court on limited grounds such as cruelty, gross misconduct, or failure to care for him when sick (Articles 1151-1152), or the automatic disqualification of an heir who has committed serious wrongs against him, such as violence or interfering with his will (Article 1150). Short of one of these, Oun's wife and daughters retain their protected share regardless of what his will says.
🧔🏻♂️ For Miky: A will could be particularly useful for Miky if he intends to pass on his assets to anyone other than his siblings. Based on the facts above, his statutory successors would be his siblings under Article 1160.
As Miky has no lineal descendants, parents, grandparents or spouse who qualify as first and second-ranks successors, there would be no person in those categories entitled to a legally secured portion. This gives him considerably greater freedom to determine who should receive his succession property through a will.
He could also appoint an executor in Cambodia under Article 1186, which may make the administration of his Cambodian assets more manageable for his family abroad.
But how is a will actually enforced in Cambodia?
A will does not necessarily mean that a successor can simply walk into a bank, land registry or company and immediately transfer the decedent’s assets.
The Civil Code contains a specific procedure for the probate and execution of wills.
Under Article 1213(1), the custodian of a testamentary document must, after becoming aware of the commencement of succession, submit the will to the court and apply for its probate without delay. The same applies where there is no custodian and a successor or other interested person discovers the will.
An important exception, under Article 1213(2), is that this probate requirement does not apply to a will made by notarial document. We note that the Civil Code doesn't include a distinct "enforcement" provision specific to notarial wills beyond this probate exemption.
In practice, however, successor should expect that banks, the land-registration authorities and other institutions (e.g, Ministry of Commerce) may require a court order or other court-issued succession documentation before they will recognize a beneficiary's authority to transfer or withdraw assets. This is particularly relevant where the beneficiary is not the registered owner and the institution needs formal evidence of succession.
Therefore, a will can substantially clarify who should receive what, but it does not necessarily eliminate the need for a Cambodian court process to establish the beneficiary’s authority to deal with particular assets.
Question 3: What about the shares Oun and Miky hold in their company, do those get inherited the same way as the house or savings?
In principle, yes. A shareholder's shares form part of the rights belonging to that shareholder and may pass by succession.
Under Article 1147 of the Civil Code, successors succeed to the rights and obligations pertaining to the decedent’s succession property. Where there are several successors, Article 1148 provides that they generally succeed in proportion to their succession shares or, where the nature of the right and obligation over the succession property cannot be partitioned, become joint owners of the succession property.
However, company shares have an additional layer of regulation under the Law on Commercial Enterprises (LCE). Under Article 93(h) of the LCE, the articles of incorporation of a company must state whether the transfer of ownership of shares is restricted and the nature of those restrictions. Article 145 also recognizes restrictions on transferability attached to classes of shares. Therefore, the company's articles of incorporation should also be checked with regards to the transferability of the shares.
So, while the shares are inheritable, the practical process for registering the successor and exercising shareholder rights may depend on both the LCE and the company's constitutional documents.
👨🏻🦱 For Oun: his shares would generally form part of his succession property.
🧔🏻♂️ For Miky: the same applies.
The applicable successors and their respective shares would depend on whether there is a valid will and, if not, the statutory succession rules.
Since Oun and Miky are the only two shareholders, the death of either shareholder could also change the company's ownership structure significantly. In addition to a personal will, a shareholders' agreement could address this in advance, for example through a buy-sell mechanism under which the surviving shareholder has an agreed mechanism for acquiring the deceased shareholder's shares from the successors, subject to the applicable law and company documents.
Question 4: Miky has a will made in his home country and not Cambodia. Does the same process apply to his condo, shares, and bank account?
Not automatically. A will made under foreign law is not treated in the same manner as a will made in Cambodia, and this has implications for all three of Miky’s assets.
The Article 1811 of the Civil Code expressly addresses only one specific situation: if a Cambodian national residing abroad, in a country where a Cambodian Consul is stationed, wishes to make a will by notarial or secret document, the Cambodian Consul performs the function of the notary. It does not address the reverse situation, namely a foreign national making a will under the law of their own country.
Separately, Article 1170 requires that wills comply with the forms prescribed under the Civil Code, and a will that fails to do so is generally rendered null and void.
Given this gap in the law, we would take a conservative approach: there is no clear provision automatically recognizing a validly executed foreign will in Cambodia. In practice, this means Miky’s foreign will would need to be presented to a Cambodian court to establish its validity and legal effect, likely by way of a court order or equivalent documentation, before his condo, shares, or bank account funds can be released or transferred to his heirs. There remains further uncertainty as to whether the full content of the will would be recognized and given effect, as its form may not be consistent with the forms prescribed under the Civil Code, and a will that does not comply with those forms is, under Article 1170, generally rendered null and void.
It is also important to distinguish a foreign will from a foreign court judgment enforcing a will. These are not the same thing, and a foreign will should not automatically be treated as a foreign judgment. If the foreign country has issued a court judgment concerning the succession, rather than merely a will, the recognition and enforcement of that judgment is governed separately by the Cambodian Code of Civil Procedure, including Articles 199 and 352. Under these provisions, a foreign judgment may be enforced in Cambodia upon obtaining an execution judgment from a Cambodian court, provided the foreign judgment satisfies the conditions set out under Article 199 of the Cambodian Court of Civil Procedure.
What happens to Miky's Cambodian assets?
🏢The condo: Miky's condo ownership needs to be considered differently from land ownership.
Under the Law on Providing Foreigners with Ownership Rights in Private Units of Co-Owned Buildings, Articles 5 and 6 give legally qualified foreigners ownership rights in private units of co-owned buildings from the first floor upward and excludes ground and underground floors. Importantly, Article 10 of that Law specifically provides that successors of a foreign special co-owner can receive the rights and obligations of the decedent in accordance with the laws and regulations in force.
🏦The bank account: The bank account is movable property rather than land. The land-ownership restriction in Article 1155 therefore does not apply in the same way to a bank deposit.
Nevertheless, in practice, the bank will normally require formal evidence establishing who is entitled to the deceased person’s account before releasing or transferring the funds. A foreign will may therefore still need to be supported by appropriate Cambodian court or succession documentation.
Each bank has their own list of documents required before they will allow release of monies. There is no centralized system for this.
📄The company shares: The same basic succession principle applies to Miky’s company shares. His shares form part of his succession property, but the successor will need to establish his or her entitlement and comply with the company’s registration requirements. Please see Question 3 for more details.
So, what should Miky do?
If a foreign investor owns meaningful assets in Cambodia, relying solely on a foreign will may lead to procedural uncertainty.
A practical approach is to have a Cambodian will covering the person’s Cambodian assets, while coordinating it carefully with any existing will in the person’s home country so that the two documents do not conflict.
A properly prepared Cambodian will cannot remove mandatory legal restrictions, such as the rules on legally secured portions or foreign ownership of land. But it can make the person’s intentions much clearer and may make the subsequent administration of the Cambodian assets more straightforward.
In short: nationality does not mean a foreigner has no inheritance rights in Cambodia. But for foreign investors, the type of asset, the nationality of the successor, the form and origin of the will, and the requirements of the relevant Cambodian institution can all affect how smoothly the inheritance can actually be implemented.
🚨The information in this article reflects the law as at the date of publication and is for general reference only. It does not constitute comprehensive legal advice. If you need further advice on estate planning for your assets in Cambodia, feel free to reach out to us at connect@vlplaw.co.