In a press statement, the Economic Planning Unit of the Prime Minister's Department announced that effective 21 December 2006, foreigners are allowed to buy residential units valued over RM250,000 per unit without having to obtain the approval of the FIC. Foreigners would no longer be imposed with any conditions of use or limitations to numbers of properties bought.



This ruling contrasts with the previous position, in which any acquisition of property by foreign interest requires the approval of the FIC. In addition, foreigners were only allowed to acquire property valued at more than RM150,000 per unit. Various conditions for acquisition were imposed, and exemption was only granted if the unit was acquired for own use.

The announcement will eliminate a layer of bureaucracy previously affecting the Malaysian property market. Previously, critics had said that the measures restrict foreigners with strong currencies from coming into the country to invest. Also, transfers of titles take a long time to approve. Accordingly, by liberalising the FIC Guidelines, one layer of government approvals is done away with and investors will not have to deal with the Prime Minister's department at all (but just the relevant body with respect to land title).

It is also envisioned that the step will encourage foreign investors to purchase high-end property development, especially the plethora of choices of new up-market condominiums that is hitting the market in the Kuala Lumpur City Centre area. The measure may not only spur the initial take-ups of foreign investors of such property, but should also encourage a more fluid secondary property market as well.

It may be hoped that this liberalization will encourage increased international investor interest in Malaysia.