YAB PM Announces Comprehensive Deregulation of FIC Guidelines, 30th June 2009
YAB Dato’ Seri Mohd. Najib Tun Abdul Razak, Prime Minister of Malaysia today (30th June 2009) announced a comprehensive rationalization of the investment guidelines administered by the Foreign Investment Committee (FIC), during his keynote address at the Invest Malaysia 2009 conference, which was attended by more than 1000 leading fund managers and corporate leaders.
During the speech, the Prime Minister articulated the need for a transformational change, which is critical for Malaysia in its pursuit of a developed nation status. Particularly, given the challenges in terms of the global economic scenario and the intense international competition, there is an urgent need to implement bold measures.
To ensure that the nation continues to prosper and all Malaysians partake in this prosperity, in the context of Malaysia’s economic philosophy of growth with equity, it is necessary for Malaysia to strengthen its business and regulatory environment to attract greater investment. In this regard, the Government has decided to substantially deregulate FIC investment guidelines.
With immediate effect, the Government will implement the following changes to the FIC guidelines:
(a) Guidelines on the acquisition of interests, mergers and takeovers:
- The FIC guideline on the acquisition of interests, mergers and takeovers is repealed;
- The FIC will, therefore, no longer process such share transactions, nor impose equity conditions on such transactions;
- The equity conditions imposed by the respective sector regulators will continue to apply;
- For strategic sectors, sector regulators are best placed to oversee their respective sectors and to tailor equity conditions according to the requirements and strategic nature of each sector; and
- There will no longer be any equity conditions imposed on sectors not deemed strategic.
(b) Treatment of Listed Companies:
- The conditions imposed on fund raising exercises by listed companies has also been significantly eased in the context of raising Malaysia’s attractiveness as a listing destination;
- The revised guidelines covering the treatment of listed companies has been issued by the Securities Commission (SC) and full details can be obtained from the SC website, http://www.sc.com.my/
(c) Guideline on the acquisition of properties:
- Going forward, FIC will only process transactions involving the dilution of Bumiputera interests and / or Government interests in properties valued at RM 20 million and above, whether bought directly or indirectly (through acquisition of companies owning properties);
- All other property transactions shall no longer require the approval of FIC;
- Except in the event of a dilution, as stated above, foreign interests will no longer be required to apply for approval to FIC for the acquisition of properties. However, foreign interests cannot acquire properties below specified threshold limits. The threshold amounts for commercial properties will be RM 500,000. For the purchase of residential properties, the present threshold of RM 250,000 is maintained until the end of 2009, and with effect 1 January 2010, it will be RM 500,000;
- This amendment of the property guidelines significantly eases the regulations on property acquisitions, while at the same time enhancing transparency and reducing regulatory processes;
- A copy of the revised FIC guideline on the acquisition of properties can be found on the EPU website, http://www.epu.gov.my/
The measures set out above constitute a major easing of investment regulations and should significantly strengthen Malaysia’s value proposition as an investment destination.
The Government remains committed to the objective of growth with equity. However, in light of the current challenges and landscape, a new approach is required which promotes effective and sustainable economic participation in a market friendly manner. This new approach will focus on promoting genuine partnership, meaningful participation of Bumiputera, and meritocracy amongst Bumiputera.
As part of this new approach, the Government will set up Ekuiti Nasional Berhad (EKUINAS), as a private equity fund to ensure meaningful and effective participation by Bumiputeras, as well as stimulate investments in sectors with high growth potential.
The Government will provide EKUINAS an initial endowment of RM500 million, with a target of scaling up EKUINAS to become a RM 10 billion fund. EKUINAS will jointly invest with private sector and investment decisions will be commercially driven. This is to ensure meritocracy in the selection of companies that will benefit from capital injection and be nurtured for growth.
The comprehensive deregulation of FIC investment guidelines has been formulated to strengthen Malaysia’s attractiveness as a place to do business and invest, for Malaysians and foreigners alike. A facilitative business and regulatory environment, combined with a more effective and market friendly distribution policy, will benefit all stakeholders. Through these measures, the Government intends to place Malaysia on a high growth trajectory, while at the same time maintaining the philosophy of growth with equity.
For further inquiries on the new guidelines please contact 03 – 8888 2919 / 2928 / 2940 / 2934. For EKUINAS please contact 03 – 8888 2797 / 2787 / 2792.
Economic Planning Unit
Prime Minister’s Department
30th June 2009
RSS Feed
