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PTG - Application for Acquisition of Real Estate by Foreign Nationals

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Tarikh akhir kemaskini:15/5/2005

PTG - Application for Acquisition of Real Estate by Foreign Nationals

Office of the Director of Lands and Mines

APPLICATION FOR ACQUISITION OF REAL ESTATE BY FOREIGN NATIONALS

1. Introduction

Foreign Nationals/Foreign Companies that wish to acquire real estate are required to obtain permission

from the State Authority according to Section 433(b) National Land Code that came into effect
1 January 1993.

2. Key Issues

2.1 Industrial Land

2.1.1 There are no barriers to foreign nationals/foreign companies to acquiring industrial land

                                  under the National Land Code, but applicants must have a licence to manufacture from
                                  the Ministry of International Trade and Industries (MITI)

2.1.2 Applicants without a manufacturing licence must refer to the FIC for special approval

2.2 Agricultural Land

2.2.1 Foreign Nationals/Companies are not permitted to:

(a) Own agricultural land unless allowed to do so according to paragraph (2.2.2) below

(b) Participate in public auctions of agricultural land under section 256 and 260

of the National Land Code

2.2.2 Special Considerations

Applications to own agricultural land by foreign nationals will be considered:

(a) For the development of agriculture based on advanced technology and approved by

bodies such as PORLA, PORIM and MARDI.

(b) As additional land to industrial land that has already been approved.

(d) To relocate industries

(e) For development as a tourist destination, marina, golf course, holiday homes etc.

(f) For agricultural land situated in the urban areas which according to local plans have

been zoned for purposes other than agriculture

(g) The State Authority deems the project necessary

2.2.3 Terms and Conditions when Forwarding Applications

(a) At least 30% of the company must be owned by a Malaysian citizen

(b) It must be proven that benefits are channeled through collaborative projects or

upstream processes

(d) It must utilise a Malaysian workforce

(e) If for purposes of 2.2.2(b) â€“ (d), additional conditions are:

(i) The industry must adhere to all the rules and regulations imposed by the government

(ii) It is proven that there has been transfer of technology and skills to the locals

(iii) There is no environmental pollution

(iv) It is appropriate from the planning aspect

(v) An additional condition imposed on those wishing to develop tourism projects,

they must show proof of experience in this field in another location.

(vi) Other terms and conditions may be determined by the State Authority from

time to time

2.2.4 Conditions after Approval has been Obtained

For the purposes mentioned in para. 2.2.2. â€“ (f), the owner is required to

                                forward the application to  change the land conditions from agriculture to other uses
                                 within two (2) months from the date of approval of transfer of ownership. After this date,
                                 approval will be cancelled. For tourism projects mentioned in para. 2.2.2. (e),
                                 further conditions are:

(a) The architectural design should reflect Malaysian characteristics.

(b) The natural environment must be maintained

2.2.5 Procedure

The application should also include the following:

(a) The Conceptual Plan of the project

(b) Statement of share ownership

source of work supplies, experience of those involved in the project
and implementation of the project

2.3 Classified Land/ Conditions for Development

2.3.1 Development of homes in a new housing project

Restrictions

Foreign Nationals/Companies are not permitted to buy land for housing development
as indicated below:

(a) One storey terrace house

(b) Two storey terrace house MMK on 29 April 1998

(d) Low and Medium cost Flats

(e) Bumiputra quota of houses

(f) Residences on Malay Reserve Land

(g) Land that has been issued with a Sale Order under Section 256 and 260,

National Land Code

2.3.2 Special Considerations

Foreign Nationals are permitted to buy houses according to the quota stated below:

(a) Apartments/Condominiums - purchase price of RM 150 00 and above

and limited to not more than 30% of the total number of units in any project

(effective from 10 August 1994 - 31 October 1994)

(b) Apartments/Condominiums - purchase price of RM 250 000 and above and limited

to not more than 30% of the total number of units in any project

(effective from 1November - 31 July 1997)

to not more than 30% of the total number of units in any project

(effective from 1 August 1995 - 28 August 1997)

(d) Apartments/Condominiums - purchase price of RM 250 000 and above and limited

to not more than 50% of the total number of units in any project

(effective from 29 August 1997 - 28 April 1998) & MMK on 22 October 1997)

(e) Apartments/Condominiums - purchase price of RM 250 000 and above and limited

to not more than 49% of the total number of units in any MMK project on 29 April 1998.

(f) Landed Property/Bungalows - purchase price of RM 750 000 and above and limited

to not more than 30% of the total number of units in any project (effective from

1November 1994 - 28 April 1998)

(g) Landed Property/Bungalow plots/ terrace houses of more than two storeys/
semi-detached houses - purchase price of RM 250 000 and above and limited

to not more than 49% of the total number of units in any MMK project on

29 April 1998.

2.3.3 Conditions

(a) Purchase price will be reviewed from time to time

(b) Further conditions may be determined by the State Authority from time to time

approval from FIC

(d) Foreign Nationals/ Companies are only allowed to sell all the assets that have

been purchased 3 years from the date of the Sales and Purchase Agreement

2.4 Development land for Business purposes

2.4.1 Restrictions

Foreign Nationals/Companies are not permitted to own development land for

business properties as indicated below:

(a) One and two Storey Shophouses

(b) Low cost Shophouses

(d) Service Workshops

(e) Land that has been issued with a Sale Order under Section 256 and 260,

National Land Code

2.4.2 Special Considerations

Foreign Nationals/Companies are permitted to own development land for

businesses as stated below :

(a) Not exceeding 30% of the total number of shop units of three storeys and above.

Purchase price is RM 1.5 mill

(b) Not exceeding 30% of business space in a Business Complex and office space

the Ministry of Health

(d) Land for a private school will depend upon approval by the Ministry of Education

(e) Land to set up a hotel

(f) Shophouses of three storeys and above with a purchase price exceeding

RM 400 000 per unit upon condition that it does not exceed 49% of the
total number of units in any MMK project on 29 April 1998

2.4.3 Conditions and Procedure

(a) Similar to that for homes/residences

(b) Foreign Nationals/Companies that wish to own land should obtain prior approval

from FIC

(d) Foreign Nationals/ Companies are only allowed to sell all the assets that have

been purchased 3 years from the date of the Sales and Purchase Agreement

2.5 Development land that is not included in any Housing Scheme

These cases will be considered according to merit and will not be based on quota as

the houses are not built within a housing scheme.

2.6 Decision of the National Land Council is effective from 25 April 2001

For all types of homes/businesses:

(a) Foreign Nationals are permitted to own all types of homes, shophouses, office space

                              and business space comprising old buildings and newly launched projects on condition
                              that each unit should cost more than RM 250 000 and without having to set up
                              a company with local equity ( the current special considerations are only for completed
                              projects or those still under construction with at least 50% completion).

(b) All the above acquisitions can be financed by local financial sources (current special
considerations are for financing by foreign financial sources)

                              or regional office, they are permitted to own offices or office space including branch offices
                              (valued at more than RM 250 000 per unit). There are no restrictions on the number of units
                              that can be owned and also no imposition of share equity.

                     (d)     Foreign companies in Asean countries that wish to set up a joint company or carry out
                              commercial and business activities in this country are permitted to own offices or office space
                              (valued at more than RM 250 000 per unit) without the condition opf equity.

(e) For the acquisition of homes under the �Silver-Hair Programme� foreign nationals are permitted

to own homes valued at RM 150 000 and above per unit, on condition that the home unit
acquired is in the area reserved for this programme

2.7 Processing Fees

Processing fees for applications for transfer of ownership of land by foreign nationals/companies

that came into effect 1 July 1995 are as follows:

(a) Applications for homes - RM1,000/- from individuals

RM2,000/- from companies

(b) Applications for businesses - RM2,000/- from individuals

RM4,000/- from companies

2.8 Levy

2.8.1 A levy of RM 10 000 will be charged for any application whose

Sales and Purchase Agreement is signed and stamped on or after 27 October 1995

2.8.2 The RM 100 000 levy must be settled within 1 month from the date of approval of

the application by the State Authority. If the levy is not settled within this period,
then the approval is cancelled automatically.

2.8.3 Waiving of the Levy

The RM 10 000 levy will be waived for the following:

a) S & P signed before 27 October 1995 and stamped before 16 March 1996.

b) Acquisition of real estate for industrial purposes

c) Transfer of ownership through Court Order for ancestral properties involving foreign

nationals.

d) Permanent residents who apply to own properties for personal use.

2.8.4 Withdrawal of Levy

The withdrawal of the levy was enforced on 29 August 1997 � MMK on 11 February 1998

and Pg. P.U. dated 26 March 1998.

2.9 Exemptions

2.9.1 All matters of sales and purchases of properties done through letters of agreement / relinquishing

of rights on or before 31 December 1992 and stamped according to the Stamping Act 1949 are

not bound by the quotas stated above. However, the buyer is required to make an application and

attach the letter of agreement / relinquishing of rights as evidence.

2.9.2 Applications from holders red identity cards with permanent resident status will be considered

based on the merits of the case.

3. Work Process for Land Acquisition Applications by Foreign Nationals

APPLICATION FOR ACQUISITION OF REAL ESTATE

Source:
Office of the Director of Lands and Mines
01-12-2005

Last updated: 04/10/2007

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