FIC Guidelines

The following is based on guidelines effective from 19 October 1997 dated 22 May 1998 as amended on 25 April 2001.

Foreign interest is defined as:
  1. Foreign citizens;
  2. Companies incorporated outside Malaysia;
  3. Companies incorporated in Malaysia but owned more than 50%  by (1) or (2), or both.

1. General Rule

Relaxed Guideline as at 25 April 2001:

  1. The acquisition of properties by Malaysians under RM10 million does not require FIC approval.
  2. Transactions for the disposal of properties below RM20 million involving the following parties only need to be reported to the FIC Secretariat when duly executed:
    • Bumiputra to Bumiputra
    • Non-Bumiputra to Bumiputra
    • Non-Bumiputra to Non-Bumiputra
    • Foreign interests to Malaysian citizens

In such cases, State Authorities do not have to wait for the FIC approval.

Guidelines dated 22 May 1998 effective 19 October 1997:

  1. All property acquisitions by foreign interests require FIC approval regardless of its value.
  2. Foreign interests are not allowed to acquire any property under RM250,000 in value except for industrial land.
  3. Properties acquired by foreign interests cannot be resold within three years from the date of FIC approval

2. Residential

Relaxed Guidelines as at 25 April 2001:

  1. Foreigners are allowed to obtain all types of residential units, shop houses, commercial and office spaces comprising of old buildings and newly launched projects subject to price exceeding RM250,000.00 without having to establish a company with local equity participation. These acquisitions are allowed to be financed by domestic and foreign financial sources.
  2. Under the "Silver-Haired Programme", foreigners are allowed to obtain residential units costing RM150,000 and above on condition that the unit obtained is located in areas specified for the programme.

Guidelines dated 22 May 1998 effective 19 October 1997:

  1. Foreign interests are not allowed to acquire the following residential units:
    • Double storey houses and under
    • Low cost and medium cost houses
    • Low cost and medium cost flats
    • Houses on Malay reserved land
    • Bumiputra quotas
  2. Foreign interests are permitted to purchase the following types of residential properties:
    • Terrace houses which are more than 2 stories, provided the houses purchased do not exceed 10% of the total number of units of each such type in a particular housing project. The purchase is subject to a minimum price of RM250,000 as has been fixed by the relevant State Authority.
    • Land/bungalow houses and semi detached houses provided the houses do not exceed 10% of the total number of units of each such type in a particular housing project. The purchase is also subject to a minimum price of RM250,000 as fixed by the relevant State Authority. If the land purchased is further developed for investment purposes, the buyer is required to form a company, which is incorporated in Malaysia (at least 49% is owned by Malaysians, 30% of which comprises Bumiputra equity).
    • Condominium/apartment units valued below RM250,000 provided that the units do not exceed 30% of the total number of units in each block.
  3. Foreign interests (for individuals including married couples) are not permitted to own more than one residential unit. The purchase of a second unit or more is treated as being for investment purposes and can only be made by a company, which is incorporated in Malaysia (at least 70% is owned by Malaysians, 30% of which comprises Bumiputra equity).
  4. Factories or companies acquired by foreign interests can acquire more than two residential units for its staff and employees' use. They are also allowed to acquire residential units exceeding RM60,000 for the employees' use except for low cost flats, medium cost units, houses on Malay reserve land and Bumiputra quotas.
  5. Permanent residents are allowed to acquire residential units exceeding RM60,000 subject to the following conditions:
    • Husband/wife must be a Malaysian citizen
    • Buyer is eligible to apply for citizenship and has already made such an application

3. Commercial Property

Relaxed Guidelines as at 25 April 2001:

  1. Foreigners are allowed to obtain 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, without having to establish a company with local equity participation. These acquisitions are allowed to be financed by domestic and foreign financial sources.
  2. Foreign companies incorporated in Malaysia to operate as Headquarters or Regional Offices are allowed to own offices or office spaces including office branches (exceeding RM250,000 per unit) without any restrictions as to the number of units that can be owned and without imposition of equity conditions.
  3. Foreign companies incorporated in ASEAN countries intending to set up joint-venture companies or undertake trading and business activities in Malaysia are allowed to own offices or office spaces (exceeding RM250,000 per unit) without imposition of equity conditions.

Guidelines dated 22 May 1998 effective 19 October 1997:

  1. Foreign interests are not permitted to own the following types of business property:
    • Shops which are 2 stories or less
    • Low cost shops
    • Stalls
    • Service workshops and
    • Business property on Malay Reserve Land
  2. Foreign interests are permitted to own the following types of business property:
    • Shophouses which are 3 stories or more subject to a minimum purchase price
      of more than RM250,000 as fixed by the relevant State Authority ; and
    • Business complex space or office space, provided that :
      (i) It does not exceed 20% of its type in any particular project, and
      (ii) The purchase is made by a company which is incorporated in Malaysia
      (at least 49% is owned by Malaysians, 30% comprises of Bumiputra equity)

This condition relating to the equity structure of the company applies only in respect of the intended ownership of relevant landed property.

4. Agricultural Land

Guidelines dated 22 May 1998 effective 19 October 1997:

  1. A. Foreign interests are not permitted to purchase existing traditional agricultural land for the purpose of conducting upon it, farming activities such as cultivating rubber trees and palm oil trees.
  2. Foreign interests are permitted to purchase agricultural land for the following purposes:
    • Commercial farming activities using advanced technology.
    • Industry based on agriculture; and
    • Tourism project; provided that the purchase is made by a company, which is incorporated in Malaysia (at least 49% is owned by Malaysians, 30% of which comprises Bumiputra equity).
  3. Foreign interests are permitted to purchase agricultural land, for the purpose of providing goods for export, as outlined by the Ministry of International Trade and Industry (MITI). The equity structure of the foreign interest is to be in accordance with the guidelines determined by MITI.

5. Industrial Land

Relaxed Guidelines as at 25 April 2001:

Foreign interests involved in manufacturing activities but are exempted from obtaining manufacturing licenses from 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 purpose of undertaking manufacturing activities but not for renting of the said properties.

Guidelines dated 22 May 1998 effective 19 October 1997:

Foreign interests are permitted to buy industrial land for the purposes of operating a company subject to the following conditions:

  • They must have a manufacturing license issued by MITI; and\
  • Foreign equity participation in companies that do not have manufacturing license from MITI require FIC's prior approval.

6. Land for Development

Guidelines dated 22 May 1998 effective 19 October 1997:

All purchases of land by foreign interests for the purpose of development as a housing project, business property or industrial area shall be made by a company, which is incorporated in Malaysia (at least 70% is owned by Malaysians, 30% of which comprises Bumiputra equity).

7. SUBMISSION

All applicants are required to submit the following information: - Name and particulars of the purchaser

  • Copy of Sale & Purchase Agreement
  • Source of Financing
  • A letter from a Qualified Consultant on the status of the construction progress - Form FIC 1/95 or FIC 2/95

All applications are to be submitted to:-

The Secretary Foreign Investment Committee
Unit Perancang Ekonomi
Jabatan Perdana Menteri
Block B5, Aras-1
Pusat Pentadbiran Kerajaan Persekutuan
62502 Putrajaya, Selangor
Telephone: +603-8888-2926 or +603-8888-3333