Acquisition of Property in Malaysia
With effect from 1 January 2010, the minimum value of foreign acquisition of a residential property is now set at RM500,00.
Requirements applicable on all kinds of property:
The acquisition can be by a corporate entity or an individual. At the state level, all foreign acquisition of property is subject to approval of the respective state authority's consent. In most cases, your solicitor would submit the application on your behalf. The approval would usually take 1 month to 3 months, and most likely the consent will be granted if the transaction is genuine.
Property valued at more than RM500,000 but less than RM20 million:
Residential Units: No approval required;
Commercial Units: No approval required;
Agricultural Land: Must be at least 5 acres and for the purposes of:
To undertake agricultural activities on a commercial scale using modern or high technology;
To undertake agro-tourism projects;
To undertake agricultural or agro-based industrial activities for the production of goods for export.
Property valued at RM20 million or more:
a) direct acquisition by a foreign entity; and
b) indirect acquisition of property through acquisition of shares of the owner, resulting in a change of control of the company owned by Bumiputera interest and/or government agency, having property more than 50 percent of its total assets
The above acquisitions are subject to the condition that the property must be registered under a locally incorporated company.
The companies require to have at least 30 percent Bumiputera interest shareholding.
Paid-Up Capital requirements for
• Local company owned by local interest to have at least RM100,000 paid-up capital.
• Local company owned by foreign interest to have at least RM250,000 paid-up capital.
Transfer of property to a foreigner based on family ties:
Approval not required, allowed among family members.
There are exemptions for approvals, you may need to consult with your lawyer for further details.
Once you have agreed on the terms with the seller, arranged the financing if required, you need to engage a lawyer to advise and act on your behalf when signing the Sale and Purchase Agreement and making payments until the transaction is completed. The money is paid to the solicitor who will forward the money to the seller when the transaction goes through.
ABOUT THE AUTHOR: Leon Lu
Leon has over 10 years of legal practice in areas of corporate advisory, investment schemes, private equity, intellectual property, IT and software, property, probate, and property law.
In his earlier years of practice, Leon ventured extensively into litigation matters such as disputes between the directors, contentious probate proceedings, defamation, injunctive remedies etc. Aside from monetary recovery by civil actions, he laid out strategies for preventive measures to curb any future mischief by targeting the masterminds of the crimes. Considering his proactive and valuable input, the Royal Malaysian Police has set up entrapment exercises to arrest the wrongdoers. These exercises have been successful with the frequency of fraud cases reduced drastically.
Leon is an experienced legal practitioner with the capabilities, temperament and judgment to provide astute solution for the clients. The logical creativity of Leon makes his work both hands-on and spot on.
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.