FIC Guideline on Acquisition of Properties

The purchase of any property by a “foreign interest”, including a permanent resident, requires the prior approval of the Foreign Investment Committee (FIC) pursuant to Section 433A of the National Land Code 1965. “Foreign interest” means (a) an individual who is not a Malaysian citizen, or (b) a foreign company or institution, or (c) a local company or local institution whereby parties mentioned in (a) or (b) hold more than 50% of the voting rights therein. Acquisition of property by a foreign interest, if approved, is usually subject to conditions imposed by the FIC. FIC is formed under Economic Planning Unit (EPU), a government agency under Prime Minister’s Department.

Generally, foreign interests are only allowed to acquire property valued at more than RM150,000 per unit, with no limit on the number of properties. The State Authority may exercise its discretion in considering a proposed acquisition based on the area or location of the property, the type of property and the percentage that the property make up in a project. Financing from both external and internal sources are allowed for all acquisitions of property. In practice, non-compliance with the FIC Guidelines may have adverse consequences on the company concerned when it deals with governmental authorities such as the Immigration Department and the Stamp Duty Branch of the Inland Revenue (stamping of transfers of shares).

Complete set of FIC Guideline can be downloaded. Click here.