Foreign Investment Committee(FIC) Being Disbanded effective 30 th June 2009

The Malaysian Foreign Investment Committee(FIC) which was previously in charge of ensuring the 30% bumiputra quota shareholding requirement in listed companies and property transfer,etc has been officially disbanded on 30 th June 2009. This was announced by our Prime Minister, Dato Seri Najib Razak.

Moving forward, a new department set up at the Economic Planning Unit(EPU) would replace the FIC and would only process transactions involving:

• the dilution of bumiputra interests and/or

• Government interests in properties valued at RM20mil and above, whether bought directly or indirectly through acquisition of companies owning properties.All other property transactions would no longer require the approval of FIC.However, foreign investors cannot acquire properties below specified threshold limits, with the threshold amount for commercial properties at RM500,000. For the purchase of residential properties, the present threshold of RM250,000 is maintained until the end of 2009, with the threshold increased to RM500,000 effective of Jan 1, 2010.

Companies will still have to comply with Securities Commission’s 25% public spread requirement at the initial public offering (IPO) stage, of which half must be offered to bumiputras, this would be waived if there were insufficient bumiputra investors to buy the shares. This means that effectively, the bumiputra equity ownership requirement has been reduced to 12.5% at the IPO stage. There will no longer be any equity conditions imposed on companies post IPO, except in the case of reverse takeovers and backdoor listings