Includes how foreign exchange is managed and implications for U.S. business

Foreign exchange control (FEC) in Malaysia is governed by the Exchange Control Act, 1953. The Controller of Foreign Exchange is the Governor of Bank Negara of Malaysia (BNM) who also acts as the foreign exchange dealings regulator in Malaysia. The Bank is committed in ensuring the Foreign Exchange Administration (FEA) rules continue to support and enhance the competitiveness of the economy through the creation of a more supportive and facilitative environment for trade, business and investment activities.

The Act imposes general restrictions on foreign exchange dealings by residents and non-residents. There are no restrictions for non-residents to invest in Malaysia to purchase ringgit assets, such as land property and securities. There is also no restriction for non-residents to transfer abroad, in foreign currency, all profits, returns and divestment proceeds from their investments in Malaysia.

Foreign Investment Committee (FIC) guidelines prior to June 30, 2009 states that any acquisition of property by foreign interest requires FIC approvals.  Since the liberalization of FIC guidelines, the approval for property acquisistion will be required from the Economic Plannig Unit (EPU) of the Prime Minister’s Department if the acquisition diludes Bumiputra (Malay) or government interest for properties exceeding RM20 million (approximately USD5.62 million). This acquisition emcompass direct or indirect (via shares).

Restrictions apply for residents of Malaysia. No person is allowed, among others, to buy or borrow foreign currency from, or sell or lend foreign currency to any person, to make any payment in Malaysian ringgit to a non-resident in and outside Malaysia, or to deal in ringgit assets in Malaysia without the prior permission of the Controller.  For more information on FEC: Foreign Exchange Control Guideline by BNM.
 

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