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FOREIGN INVESTMENT COMMITTEE
(FIC) GUIDELINES
ON PROPERTY ACQUISITION BY FOREIGN CONCERNS
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.
Restrictions
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;
Residential
Properties
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.
Exceptions:
-
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.
Commercial Properties
Foreign
Interests may acquire commercial properties of below RM10 million value
for its own use without incorporating a local company.
For
properties,
-
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:
Equity 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
Industrial property
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.
Agricultural land
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.
Public auction
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. Colliers, Jordan Lee &
Jaafar shall not be liable for any losses, direct or indirect,
as a result of the information provided here. |
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Statutory
Information
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