GUIDELINES ON THE RELAXATION OF THE CONDITION THE ACQUISITION OF PROPERTIES BY FOREIGN INTERESTS ANNOUNCED ON 3 MAY 2001
THE Foreign Investment Committee (FIC) has relaxed its rules to allow foreigners to own all types of property including residential and commercial priced above RM250,000 without setting a company with local equity participation.
The previous rules only allowed to buy properties which had been fully completed or 50% completion properties.
The new guidelines of the Foreign Investment Committee was announced by Prime Minister Datuk Seri Dr. Mahathir Mohamad on 3 May 2001 and with effect on 25 April 2001. This announcement to the FIC guidelines were made just a day after the government abolished the 10% exit levy on portfolio investment profits and the effort to reducing the property overhang announced last month.
This further relaxation guidelines on the property acquisition by the foreign buyers is on the move to encourage attract more investments from abroad and improve the investment environment in Malaysia.
According to Dr. Mahathir, the government is realized the Malaysian economic environment is facing the challenging time as the result of the global economic slowdown and the increasing competition between countries to attract foreign direct investment. He added that the government is committed to maintain an open and business-friendly economic environment to encourage more investment.
Under the Silver-Haired Programme, the foreign investors are allowed to purchase any residential properties priced above RM150,000 in the designated areas.
To encourage the foreign investors to set their corporate or regional headquarters and branches in Malaysia, they are allowed to own offices worth above RM250,000 without any domestic equity condition. Those companies in Asean countries wishing to set up joint ventures or operate in Malaysia will also be allowed to own offices worth above RM250,000 without any equity conditions.
In addition, the companies undertake manufacturing activities that are exempted from getting licensing from the Ministry of International Trade and Industry are now allowed to purchase industrial or factory property for manufacturing purposes.
Under the new rules, companies and individual involved in property transactions lower than RM20 million will only need to report to the FIC Secretariat.
Malaysian buyers involve in the property acquisition costing below RM10 million will no longer require to get approval from FIC.