Guidelines on the Acquisition of Properties 2009

ECONOMIC PLANNING UNIT (EPU)
Guideline on the Acquisition of Properties 2009

NEWSFLASH

ECONOMIC PLANNING UNIT (EPU) - Guideline on the Acquisition of Properties 2009 (Effective 30th June 2009)

*Property:- means immovable property (meaning residential, agricultural and commercial)

WHEN DO YOU NEED EPU APPROVAL?

Direct Acquisition of *Property

Before any purchase or acquisition of property (residential property excluded) can take effect, EPU approval will be needed if:-
(a) the property value is RM20,000,000-00 (or more);
(b) which when acquired, will result in the dilution in the ownership of Bumiputra interest and/or governmental of the said property.

Indirect Acquisition of Property via Shares (meaning the purchase of a Company which owns the property)

For non-Bumiputra acquisition of property through the purchase of shares, EPU approval will be needed:-
(a) if the property is valued in excess of RM20,000,000-00; and
(b) which when acquired will:-
(i) result in the change of control of the Bumiputra and/or governmental agency owned portion of the company; and
(ii) if the property is in excess of 50% of the company’s total assets.

Acquisition of Property by Foreigners

In so far as for the acquisition of property by foreign interest, no EPU approval is needed if such purchase and acquisition involves the following:-

(a) the commercial unit valued at RM500,000-00 and above; or

(b) agricultural land valued at RM500,000-00 and above OR at least 5 acres in area for the following purposes:-
(i) to undertake agricultural activities on a commercial scale using modern or high technology; and/or
(ii) to undertake agro-tourism projects; and/or
(iii) to undertake agricultural or agro-based industrial activities for the production of goods for export;

(c) industrial land valued at RM500,000-00 and above; or

(d) residential units valued at RM250,000-00 and above (of which the threshold will be increased to RM500,000-00 beginning January 1, 2010);

(e) transfer of property to a foreigner based on family ties among immediate family members.

IF YOU USE A COMPANY TO PURCHASE PROPERTY, THE COMPANY MUST SATISFY THE FOLLOWING:-

For the acquisition of property in referred to in Paragraph 1 & 2 above, if the purchase is conducted by use of a company, then the company has to:

(a) have not less than 30% Bumiputra shareholding interest; and wherein:-
(i) if the company is owned by locals, the paid-up capital has to be at least RM100,000-00; or
(ii) if the company is owned by foreign interest, the paid up capital has to be at least RM250,000-00; and
(iii) the company must be incorporated in Malaysia.

IS THERE A TIME FRAME TO COMPLY WITH THE ABOVE CONDITIONS?

For direct acquisition of property (referred to paragraph 1 above), compliance with the appropriate provisions of paragraphs 4(a) to 4(d) is required before transfer of property can take effect.

For indirect acquisition of property (referred to paragraph 2 above), compliance with the appropriate provisions of paragraphs 4(a) to 4(d) is required within 1 year after the issuance of written approval of the EPU.