| || |
Foreign interests means any interest, associated group of interests or parties acting in concert which comprises: -
- Non Malaysian citizens.
- Companies incorporated overseas.
- Companies incorporated in Malaysia but more than 50% owned by the above two definitions.
Foreign interests are not allowed to acquire: -
(a) low and medium low cost properties;
(b) properties built on Malay reserve land;
(c) properties allocated to Bumiputera in any property development;
(d) stalls and service workshops;
(e) agricultural lands developed on the basis of the homestead concept.
Note: Bumiputera means:
- for Peninsular Malaysia, Malay individual or aborigine as defined in Article 160(2) of the Federal Constitution;
- for Sarawak, individual as defined in Article 161A (6)(a) of the Federal Constitution;
- for Sabah, individual as defined in Article 161A (6)(b) of the Federal Constitution;
Foreign interests are allowed to acquire residential properties valued above RM250,000 per unit without seeking approval from the FIC. There is no set limit to the number of units acquired and no restriction on use. The restriction on internal financing has been lifted.
- Permanent Residents are allowed to acquire residential properties valued at more than RM100,000;
- Foreign owned local manufacturing firms may acquire properties above RM60,000 on condition that they are used as employees\' residence.
Foreign Interests may acquire commercial properties of below RM10 million value for its own use without incorporating a local company.
- valued RM10 million and above, or
- entire building or development project irregardless of value, or
- land or land with building for commercial redevelopment,
the foreign interests must incorporate a local company with the following conditions:
- 30% Bumiputera equity. The remaining equity shareholding can be held either by local interest, foreign interest or by both;
- Companies with Bumiputera equity shareholding of 30% or more, but less than 51% are required to maintain at least 30% Bumiputera equity at all times; and
- Companies which already have Bumiputera equity shareholding of 51% or more, will be required to maintain at least 51% Bumiputera equity at all times;
Share Capital Condition
- Local companies owned by foreign interests with a paid-up capital of less than RM250,000 will be required to increase the share capital to at least RM250,000 within six (6) months from the date of FIC’s approval letter
A foreign interest is permitted to acquire industrial property, without any price limit, provided that the property is registered under a locally incorporated company. The acquisition will be subjected to conditions as laid out by the FIC.
A foreign interest may only acquire agricultural land valued at more than RM250,000 or in area of at least five acres, whichever is higher. The acquisition will be subjected to conditions for acquisition. The acquisition must be for the purposes of agricultural activities on a commercial scale using modern or high technology, or for an agro-tourism project, or for agricultural or agro-based industrial activities for production of goods for export. In the last mentioned activity, equity conditions may be relaxed.
Foreign interests, including foreign banks, may acquire properties valued at RM150,000.00 and above per unit, in a public auction, subject to conditions for acquisition.
Transfer of Properties
A transfer of property to a foreigner requires approval of the FIC and approval is generally allowed for transfers among immediate family members only.
Lease to Foreign Interests
Any lease of property for a term of 10 years and above to a foreign interest requires the approval of the FIC.
Disposal of Properties
Disposal of any property by a foreign interest to another foreign interest requires the approval of the FIC. Disposals of less than RM20 Million by a foreign interest to a local interest do not require FIC approval, although FIC must be notified.
Charging of Properties to Foreign Interests
Any property in Malaysia to be charged to a foreign interest requires the approval of the FIC. Approval shall only be allowed if all of the loan taken is utilized solely for the operation of business in Malaysia.
Exemptions from Approval
The following acquisitions of property by foreign interests are exempted from obtaining FIC Approval: -
- Acquisition by Multimedia Super Corridor (MSC) status companies of any property in the MSC area, provided the property is used for operational activities, and this includes using the property as a residence for their employees;
- Acquisition of residential unit under \"Malaysia My Second Home\" Program;
- Transfer of property pursuant to a will or court order;
- Acquisition of industrial property by a manufacturing company licensed by Ministry of International Trade and Industry, for own manufacturing.
Exemptions from Conditions for Acquisition
Some acquisition of properties by foreigners, although requiring FIC approval, are exempt from conditions for acquisition, and these includes: -
- acquisition of a residential unit for own use;
- acquisition of one or more contiguous properties with a total value of less than RM10 Million.
Acquisition of an industrial property by a foreign interest for its own manufacturing operations is exempted from the equity condition only and may be subject to other conditions for acquisitions.
***The guidelines above is brought to you for your information only. Prestige Hill shall not be liable for any losses, direct or indirect, as a result of the information provided here.