Foreign Investment Committee ( F I C )

NEW GUIDELINES ON THE ACQUISITION OF PROPERTIES BY MALAYSIANS AND FOREIGN INTERESTS RELEASED BY THE ECONOMIC PLANNING UNIT ON MAY 02, 2001

The relaxation of the Foreign Investment Committee Guidelines on the acquisition of properties is to clarify on the acquisition of properties by Malaysians and foreign interests with the purpose amongst others, to expedite and simplify the FIC procedures pertaining to the acquisition of properties.

GUIDELINES

The new guideline is divided into the following categories: -

1.
The acquisition of properties by Malaysians under RM10 million does not require the approval of the FIC (this new acquisition limit is to replace the current limit of RM5 million). This measure is taken in order to simplify and expedite transactions below the limit of RM10 million to be dealt with by the State Authorities.


2.
Transactions for the disposal of properties below RM20 million, involving parties as follows: -

a. Bumiputera to Bumiputera;
b. non-Bumiputera to Bumiputera;
c. non-Bumiputera to non-Bumiputera; and
d. foreign interests to Malaysians.

With regard to the above transactions, only transactions which have been duly executed are to be reported to the FIC Secretariat. In such cases the State Authorities do not need to await for the FIC's approval.


3.
Foreign interests involved in manufacturing activities but are exempted from obtaining manufacturing licenses from the Ministry of International Trade and Industry (MITI) are permitted to acquire industrial lots/ factories for manufacturing purposes only. This is to facilitate foreign interests in acquiring industrial properties, without equity conditions, for the purposes of undertaking manufacturing activities but not for renting of the said properties.


4.
Further relaxation of the conditions in the Special Guidelines ( 22 April 1998):-

4.1 Foreigners are allowed to purchase all types of residential units, shop houses, commercial and office spaces comprising of old buildings and newly launched projects, subject to price exceeding RM250,000 per unit, without having to incorporate a company with local equity participation (the current relaxation is only for newly completed projects or those that are at least 50% in progress).

4.2 The above acquisitions are allowed to be financed by domestic financial sources (currently such acquisitions can only be financed by foreign financial sources).


5.
In order to encourage foreign companies to be incorporated in Malaysia to operate as the Headquarters or Regional Offices, these companies are allowed to own offices or office spaces including office branches (the price exceeding RM250,000 per unit) without any restrictions as to the number of units that can be owned and without imposition of equity conditions.


6.
Foreign companies incorporated in ASEAN countries which intend to set up joint-venture companies or to undertake trading and business activities in Malaysia are allowed to own offices or office spaces (the price exceeding RM250,000 per unit) without imposition of equity conditions.


7.
In respect of the acquisition of residential units under the "Silver-Haired Programme", foreigners are allowed to purchase residential units priced at RM150,000 and above, subject to the condition that the unit purchased are located in areas designated for such programme.