There are around 300 registered trusts operating in Cambodia with assets having an estimated value of $426 million, as of December 16, up from 17 trusts with assets worth around $156 at end-2021, reflecting increasing awareness among local investors and the general public of these agreements, according to Trust Regulator (TR) director-general Sok Dara.
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”.
Speaking to The Post on December 19, Dara offered an example of a property or real estate trust: A man looking to get into the real estate market transfers $1 million to a trustee to manage investments on his behalf, and the latter gives the former back the profits made.
Trustors may choose to establish a trust to protect themselves from certain legal liabilities and tax obligations.
Dara commented that the increase in number of registered trusts reflects budding awareness of the variety of legal and investment protections that trusts offer. He suggested that the TR will focus on awareness campaigns next year, to acclimatise the public with the functioning of funds and offer “very efficient” alternative routes for investment.
Growth in the sector has been fuelled by an increasing dependence on these legal asset-management arrangements, he said, revealing that the TR expects the total underlying value of the trusts to reach $500 million by December 31 on the back of a year-end boom.
Dara issued a call for all trusts and their underlying assets to be properly registered.