Foreign investment committee (FIC) guidelines

FOREIGN INVESTMENT COMMITTEE (FIC) GUIDELINES

Applications of the guidelines

The FIC guidelines shall apply to any of the following transactions which requires the approval of FIC:

1
Acquisition of property by local interest

Acquisition of property which is valued at RM10 million and less than RM20 million by non-Bumiputera interest or local interest from Bumiputera interest; or Acquisition of property which is valued at RM20 million and more by local interest. This property has to be registered under a locally incorporated company and is subject to the conditions for acquisition

2
Acquisition of property by foreign interest

Any acquisition of property by foreign interest from local interest and other foreign interest; Any acquisition of property which will be developed as a development project other than residential unit; and Foreign interest is only allowed to acquire property other than residential unit valued at more than RM150,000 per unit with no limit on the number of property acquired

3
Acquisition of commercial unit

Acquisition of commercial property valued at less than RM10 million by foreign interest does not have to incorporate a local company and will be subjected to the commercial property is only for own use.;

4
Acquisition of agricultural land

Foreign interest is only allowed to acquire agricultural land valued more than RM 250,000 or at least five (5) acres in area subject to the conditions for acquisition; Acquisition of agricultural land by foreign interest is only allowed for the following purposes: To carry out agricultural Our Activities on a commercial scale using modern or high technology; or to carry out agro-tourism project; or

To carry out agricultural or agro-based industrial Our Activities for the production of goods for export. However, for this purpose relaxation on equity condition may be considered.

5
Acquisition Of Industrial Land

Foreign interest is allowed to acquire industrial land without any price limit and must be registered under a locally incorporated company and will be subjected to the conditions for acquisition and the conditions for foreclosure

6
Acquisition Of Property For Hostel Purpose

Local company owned by foreign interest is allowed to acquire property valued more than RM60,000 per unit to be occupied as a hostel for the company’s employees

7
Acquisition Of Property Through Public Auction

Foreign interest including foreign bank and financial institution incorporated outside Malaysia is allowed to acquire property through public auction valued more than RM150,000 per unit other than residential unit and will be subjected to the conditions for acquisition

8
Acquisition Of Contiguous Properties

Foreign interest is allowed to acquire two (2) or more contiguous properties with a total value of RM10 million and above and will be subjected to the conditions for acquisition

9
Acquisition Of Entire Building Or Project

Acquisition of an entire building or an entire property development project, valued at RM10 million and above must be registered under a locally incorporated company and will be subjected to the conditions for acquisition

10
Redevelopment Of Property

Foreign interest is allowed to acquire land or land with building for redevelopment on a commercial basis. If this acquisition is not meant for own use, it has to be registered under a locally incorporated company and will be subjected to the conditions for acquisition

11
Transfer Of Property

Transfer of property to a foreigner based on love and affection is allowed among immediate family members only

12
Leasing Of Property

Leasing of property for a term of 10 years and above by foreign interest

13
Disposal Of Property

Disposal of property by foreign interest to another foreign interest. Disposal of property by foreign interest to local interest valued at more than RM20 million

14
Charging Of Property To Foreign Interest

Charging of property in Malaysia to foreign interest including foreign bank and financial institution incorporated outside Malaysia

15
Acquisition Of Property By Public Company

Acquisition of property by public company which is financed by cash. Acquisition of property by Real Estate Investment Trust (REIT) management company through private REIT fund.

This Guideline shall apply to transaction which requires approval from any Ministries or Departments/Government Agencies/Statutory Bodies eventhough the approval of FIC is not required.

This Guideline shall apply to acquisition which requires the consideration of the Securities Commission but does not require the approval of FIC for any proposal which is subjected to Section 32 of the Securities Commission Act 1993.

The State Authority has the discretion to consider any acquisition based on the area or location of the property, types of property and percentage of the total units in a project.


Acquisitions for notification
Acquisition of property which is valued at RM10 million and less than RM20 million needs only to be notified to FIC if the transactions involve the following parties:
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Acquisition by Bumiputera interest from other Bumiputera interest; or
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Acquisition by Bumiputera interest from non-Bumiputera interest; or
-
Acquisition by non-Bumiputera interest from other non-Bumiputera interest; or
-
Acquisition by local interest from foreign interest


Exemptions
This Guideline shall not apply in the following situations:

Acquisition of property valued at less than RM10 million by local interest; Multimedia Super Corridor (MSC) status companies are allowed to acquire any property in the MSC area provided that the property is only used for their operational Our Activities including as residence for their employees;

Any acquisition of property by companies operating in the approved area in any regional development corridor by companies that have been granted the status by the local authority as determined by Government;

Any acquisition of property by companies which have obtained the endorsement from the Secretariat of the Malaysian International Islamic Financial Centre (MIFC) provided that the property is meant for own use in carrying out international Islamic financial transaction and the acquisition is a result of Islamic financial financing scheme which is required in order to comply with the Syariah principle only;

Foreign interest is allowed to acquire residential unit valued at more than RM250,000 per unit subject to approval of the relevant local authorities while “Malaysia My Second Home” Programme is to be referred to Ministry of Tourism;

Transfer of property pursuant to a will and court order; Acquisition of industrial property by manufacturing company licensed by the Ministry of International Trade and Industry as well as manufacturing company which is exempted from obtaining manufacturing license for own manufacturing operation; Any acquisition of property by Ministries and Government Departments (Federal and State); Any acquisition of property by Minister of Finance Incorporated, Chief Minister Incorporated and State Secretary Incorporated are considered to have been approved by the Government;

Any privatization projects whether at the Federal or State level provided that it involves the companies which are the original signatories in the contracts for the privatized projects;

Any acquisition of property for own use by local companies that have been granted the status of International Procurement Centre, Operational Head Quarters, Representative Office, Regional Office and Labuan offshore company or other special status granted by the Ministry of Finance, MITI and other ministries;

Any acquisition or disposal of property/asset for the purpose of Asset-Backed Securities (ABS); and Foreigners buying commercial real estate worth RM500,000 and above for their own use.


Restrictions

Foreign interest is not allowed to acquire:

Residential unit under the category of low and medium low cost as determined by the State Authority;

Properties built on Malay reserve land;

Properties allocated to Bumiputera (Bumiputera quota) in any property development project as determined by the State Authority;

Stall and service workshop;

Agricultural land developed on the basis of the homestead concept; and
Properties gazetted under National Heritage Act 2005.


For further enquiries, please contact:
Foreign Investment Committee (FIC)
Economic Planning Unit
Prime Minister's Department
Block B5 & Block B6Federal Government Administrative Centre
62502 Putrajaya

Tel No: +(603) 8888-3333Fax No: +(603) 8888-3755Email address: info@epu.jpm.my
Website: http://www.epu.jpm.my/