Believe me… purchases over $100,000 should be managed by an escrow account or agent to ensure all monies are secure until the transaction is complete. The fee is worth avoiding the stress of a sale ‘go wrong’ by unscrupulous buyers or sellers. I have learnt the hard way and will always manage purchases by escrow from now on.

What is Escrow?

An escrow account is where funds (for example a house deposit) are held in trust whilst two or more parties complete a transaction. This means a trusted third party can secure the funds until they need to be disbursed to the seller at intervals and/or at the conclusion of the agreement (property settlement).

As a seller, funds (usually a deposit) are held in the Escrow Account until either a) the buyer has received and approved the property title or b) the buyer rejects the purchase and forfeits the deposit. As a buyer, funds are held in an Escrow Account until you have received and approved the property and property title. If this is not done (for whatever reason), you can reject the sale and have the funds returned to you.

An Escrow agent can oversee the process to ensure the funds reach the right hands. S/he ensures protection for the Buyer and Seller, that any disputes are dealt with appropriately and fairly and every step is tracked and verified.

How does Escrow work?

  • Buyer and Seller agree on the set price and transaction terms (sales contract)
  • Buyer and seller agree on a provider for the purchases managed by escrow
  • Buyer commences transaction (deposit) via Escrow as the preferred payment method
  • Property title process is undertaken to completion
  • As soon as the property title has been transferred (and documents checked), the Escrow Agent releases the remaining funds.
  • The physical title will be provided to the Buyer once the funds have been received by the Seller

Escrow accounts can be established using a number of financial service providers, such as:

In 2020, The Association of Banks Cambodia (ABC) released its DIRECTORY BOOKLET to promote financial inclusion and ensuring financial stability.

Chairman of ABC wrote:

“Cambodia is a young economy that has been developing on the basis of a free and open market scheme since the early 1990s.

The banking sector has steadily developed. It has been resilient, stable, and integrated within regional and global markets. Its sound development is crucial to the growth of economic activities and diversification, especially financial integration in the region.

Credit has steadily increased and has benefited various sectors of the economy. Along with robust economic growth, Cambodia’s banking sector continues to gradually develop. With this healthy financial intermediation, the National Bank of Cambodia (NBC) in collaboration with the Association of Banks in Cambodia (ABC) has been promoting
financial inclusion while also ensuring financial stability.

Higher and better regulation, increased coordination between regulators of partner countries, and a large common commitment in safeguarding financial stability are all necessary to allow harmonious and sustainable growth. These are all objectives that are core elements of the ASEAN Economic Community, particularly the financial integration framework. It is my hope and expectation that this book will provide an effective experience and reference resource for all of you”.

More information about the legal and financial instrument of escrow

Can foreigners buy real estate in Cambodia?