The Trust Regulator of Cambodia and Stronghold Trustee Co., Ltd. signed a Memorandum of Understanding (MoU) regarding the development of carbon credit trusts in Cambodia on August 15, 2024 at the Non-Bank Financial Services Authority Building.
At the signing ceremony, H.E. Sok Dara, Director General of the Trust Regulator, shared that this MoU marks the very first offshore collaborative effort between the regulator – represented by the Research, Planning and Cooperation Department – and Stronghold Trustee, although both parties have previously cooperated on trust market awareness raising initiatives.
“This MOU is vitally important and coincides with the trust regulator’s strategic objective, marking a new bold step into expanding the trust market in Cambodia through an international lens in order to ensure the market demands are met, and market players can seize the opportunities to maximise benefits for the trusts and related services they offer,” he said.
Explaining the regulator’s decision to introduce a carbon credit focused trust specifically, Dara mentioned the increased push for higher sustainability standards and environmentally conscious business practices worldwide, leading many corporations and businesses to get involved in the carbon credit market to offset their emissions.
...Potential businesses have shown their interest in creating trusts for the purchase of carbon credits in Cambodia, therefore, after rigorous consideration, the Trust Regulator has come to the decision to collaborate with Stronghold Trustee to dive deep into the global carbon offsetting and carbon credit trend, aiming to encourage businesses from all over the world to consider creating a trust for the trading of carbon credits in Cambodia.
Watch a snippet of H.E. Sok Dara’s speech from the MoU signing ceremony:
Chang Chung-Kai, Chairman of Stronghold Trustee, also proposed that this initiative between the trust regulator and Stronghold Trustee can potentially help to enhance the transparency, efficiency and competitiveness of carbon credits in Cambodia.
“Transparency, because collecting possible carbon credit sources under one trust umbrella in Cambodia would allow us to monitor and constantly update the status of carbon credits… Efficiency, because carbon credit trusts would provide assistance in utilising idle land or resources that are underused to extra more benefit… and competitiveness, because as neighbouring countries [continue to] equip themselves for the ‘carbon credit war’, there's no point for us to put [Cambodia’s] great natural resources and opportunities aside, so we should be well-equipped for this as well,” said Chung-Kai.
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Cambodia’s Growing Trust Market: Current Status In 2024 And Future Plans
Since the passing of Cambodia's Trust Law in 2019 and the subsequent establishment of the Trust Regulator, the country's trust market has seen exponential growth in terms of both the number of trusts legally created and registered, and licensed trust companies and trust-related services providers.
According to the latest data shared by the Trust Regulator Director General, the regulator has thus far registered 986 legally established trusts in Cambodia, accounting for a market worth USD 1.5 billion, with the majority being commercial trusts covering:
- Real Estate – 736 cases, amounting to over USD 700 million
- Escrow Services – 157 cases, amounting to over USD 213 million
- Fixed Deposit – 30 cases, amounting to over USD 10 million
- Pension Funds – 38 cases, amounting to over USD 63 million
- Shareholding – three cases, amounting to over USD 92 million
- Green Bonds – two cases, amounting to USD 1.2 million
Additionally, there are currently 12 licensed and approved trust companies, 20 commercial banks licensed to provide retention or escrow services, 66 licensed individual trustees (35 independent individual trustees and 31 individual trustees of trust companies), 15 accredited valuation companies, and 14 accredited auditing firms.
Speaking to B2B Cambodia about the future of the trust market, Dara said the regulator has many plans for the development of new products, which will be more concretely detailed in the Trust Sector Development Strategy for 2025-2035.
“Based on the existing products [in the market], we plan to develop other new trusts such as family trusts, social and environmental related trusts, religion related trusts and pet trusts as well. Everything is in our action plan. We will share more information with our stakeholders after holding our meeting on the 10-year trust sector development strategy for 2025-2035,” he stated.
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