A practical guide for foreign buyers of Malaysian commercial land—when Ministry of Economy (EPU) approval applies, what foreigners can’t buy, state-by-state price thresholds, and the step-by-step consent process.
Foreign Acquisition of Commercial Land: EPU, State Consent & Thresholds
What foreign investors must know before signing an SPA for Malaysian commercial land—EPU rules, state consent, off-limits assets, and typical thresholds.
When Do You Need Ministry of Economy (EPU) Approval?
The current guideline (effective 13 Jul 2022) requires EPU approval for non-residential property acquisitions that either:
- Directly reduce Bumiputera and/or Government interest in property worth RM20 million and above; or
- Are indirect via share acquisition causing a change of control in a Bumiputera/Government-interest company where property makes up >50% of assets and the property value exceeds RM20 million.
Where approval is required, companies must generally show ≥30% Bumiputera equity and meet paid-up capital conditions (RM100k for local ownership; RM250k for foreign-owned local companies). Decisions on complete applications target =10 working days.
Source: Ministry of Economy, Garis Panduan Perolehan Hartanah (13 Jul 2022).
Acquisitions That Do Not Need EPU Approval (But Have Conditions)
Foreign acquisitions that typically do not need EPU approval still sit under relevant ministries/departments and must meet minimum values and structuring rules. For example:
- Commercial unit purchases of RM1,000,000 and above.
- Industrial land purchases of RM1,000,000 and above.
- Registration is usually under a Malaysian-incorporated company for these categories.
Source: Ministry of Economy guideline, paras 2.2(a),(c) & 4.
What Foreigners Cannot Buy
- Properties below RM1,000,000 per unit.
- Low/low-medium cost residential units (as determined by the State).
- Properties on Malay Reserve Land.
- Units allocated to Bumiputera quota within a development (unless exempted by the State).
Source: Ministry of Economy guideline, Section VI.
State Consent Is Mandatory
Regardless of EPU, foreign acquirers must obtain State Authority consent under Section 433B, National Land Code before a transfer can be registered (consent to charge/lease is treated separately). Timelines, fees and forms vary by state.
References: Section 433B NLC overviews.
Typical Minimum Price Thresholds (Selected States)
Illustrative thresholds for foreign buyers (latest published tables as at Oct 2024—verify before purchase):
- Wilayah Persekutuan Kuala Lumpur: RM1,000,000 minimum (commercial/industrial/land—often limited to locally incorporated foreign companies).
- Selangor (zones apply): commonly RM3,000,000 for commercial/industrial; additional restrictions may apply.
- Johor: typically RM1,000,000 for commercial/industrial; special rules for auctions and Bumiputera allocations.
- Penang: Island often RM3,000,000 (commercial/landed), Mainland lower; levies may apply.
Always confirm with the respective State Authority—thresholds and levies can change by zone and property type.
Deal Flow: Step-by-Step
- Structure & Eligibility: Confirm if EPU approval is triggered (RM20m + dilution cases). If not, confirm category/valuation meets state minimums.
- Vehicle: Set up/confirm a local company if acquiring commercial/industrial under para 2.2 of the guideline.
- State Consent: Apply to the State Authority (forms, fees, translations where required); track indicative timeline.
- EPU (if applicable): Lodge with Ministry of Economy; prepare equity/paid-up capital evidence and supporting papers.
- SPA & CPs: Make state consent/EPU approval conditions precedent with realistic long-stop dates.
- Completion: Pay balance sums/levies, perfect transfer (Form 14A) and stamping, then register title/charge.
Documents & Checks to Prepare
- Company profile (shareholding, paid-up capital) and, where required, Bumiputera equity evidence.
- Latest official land search, title conditions, and site plan/survey.
- Independent valuation / pricing notes supporting threshold compliance.
- Board resolutions/POA; SPA drafts with CPs and timeline buffers.
- If part of a larger project: planning notes (zoning, plot ratio) and utility confirmations for due diligence.
