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Guide to the exchange control rules

Ref No : 05 Oct 1998 Embargo : Not for publication or broadcast before 000 hours on Monday 05 October 1998

See also: Guide to the ECM - Labuan IOFC


PENALTY

The penalty for offences commited under the Exchange Control Act, 1953

Upon conviction:
o FINE - Up to RM10,000;
o JAIL TERM - Not exceeding 3 years; or
o BOTH

 

Definition of resident:

Definition of non-resident:

Definition of External Account

Definition of ringgit asset in Malaysia

(a) Malaysian citizen; or

(b) Malaysian citizen with PR status of another country but resides in Malaysia; or

(c) Non- Malaysian citizen with PR status in Malaysia and resides in Malaysia; or

(d) Business enterprises / societies established / operating in Malaysia

(a) Non- Malaysian citizen; or

(b) Malaysian citizen with PR status abroad and resides abroad; or

(c) Foreign embassies, high commissions, supranationals, central banks; or

(d) Business entities established abroad

A ringgit account with a financial institution in Malaysia which is maintained by a non-resident or where the beneficial owner of the ringgit funds is a non-resident

  • Any form of bank deposits

  • Land & building

  • Malaysian securities (whether listed or unlisted)

You can browse through the tables below, or you can choose the criteria which fits your case:

Note: YES = Allowed; NO = Not allowed at all

 

EXCHANGE CONTROL RULES

A. TRAVELLERS

1. Who should complete the Travellers Declaration Form (TDF)

(a) Regardless of the amount of ringgit notes or foreign currency notes / traveller's cheques brought into or taken out of the country:

  • All residents must complete the TDF
  • All non-residents must complete the TDF

(b) Both residents and non-residents must ensure approval is obtained for carrying above the permitted amount

 

TRAVELLERS

Resident

Non-resident

Yes

Needs approval

Yes

Needs approval

2. Bringing into Malaysia ringgit or foreign currency on person or in baggage

(a) Bring in foreign currency notes and travellers' cheques of any amount

X

 

X

 

(b) Bring in ringgit notes and coins up to RM1,000

X

 

X

 

(c) Bring in ringgit notes and coins above RM1,000

 

X

 

X

3. Taking out of Malaysia ringgit or foreign currency on person or in baggage

(a) Take out foreign currency notes and travellers' cheques up to the equivalent of RM10,000

X

 

Not applicable

(b) Take out foreign currency notes and travellers' cheques exceeding the equivalent of RM10,000

 

X

Not applicable

(c) Take out foreign currency notes and travellers' cheques up to the amount brought in (with documentary evidence for amount brought in)

Not applicable

X

 

(d) Take out foreign currency notes and travellers' cheques (without documentary evidence for amount brought in)

Not applicable

 

X

B. EXPORTERS

 

EXPORTERS

Yes

Needs approval

No

1. Export proceeds

(a) Received in full, within a period of six months from date of shipment/export

X

   

(b) Received in full, after six months from date of shipment/export

 

X

 

(c) Offset against payments to the non-resident

 

X

 

2. Receive from non-residents in ringgit for:-

(a) proceeds for export of goods and services contracted after 1300 hours on 1 September 1998

   

X

(b) drawdown of loan

   

X

3. Receive from non-residents in foreign currency:-

(a) proceeds for export of goods and services

X

   

(b) drawdown of loans which has been approved by BNM (either under general or specific approval)

X

   

4. Pay to non-residents in ringgit for:-

(a) services

   

X

(b) repayment of loan

   

X

5. Pay to non-residents in foreign currency for:-

(a) services

X

   

(b) repayment of loan which has been approved by BNM (either under general or specific approval)

X

   

6. Foreign currency accounts

To retain export proceeds in foreign currency:

(a) With commercial banks in Malaysia, up to the following limits

  • USD10 million for exporter with average monthly export receipts exceeding RM20 million;
  • USD 5 million for exporter with average monthly export receipts above RM10 million and up to RM20 million;
  • USD3 million for exporter with average monthly export receipts between RM5 million and RM10 million;
  • USD 1 million for new exporter or those with average monthly export receipts of less than RM 5 million

X

   

(b) With commercial banks in Malaysia, in excess of the above limits

 

X

 

(c) With banks overseas, including Labuan offshore banks

 

X

 

7. Borrowing in foreign currency

(a) Obtain short-term (less than 12 months) trade financing facilities in foreign currency from commercial banks in Malaysia

X

   

(b) Other than (a) above, borrow in foreign currency up to the aggregate of RM5 million equivalent from banks in Malaysia, Labuan offshore banks or any non-resident

X

   

(c) Borrow in foreign currency exceeding the aggregate of RM5 million equivalent.

 

X

 

8. Payment to another resident in foreign currency for:-

(a) Drawdown and repayment of loans from banks in Malaysia (with BNM approval - general/specific)

X

   

(b) All other purposes [other than 8 (a)]

 

X

 

C. IMPORTERS

 

IMPORTERS

Yes

Needs approval

No

1. Pay to non-residents in ringgit for:-

(a) import of goods and services contracted after 1300 hours on 1 September 1998

   

X

(b) repayment of loan

   

X

2. Pay to non-residents in foreign currency for:-

(a) import of goods and services

X

   

(b) repayment of loan which has been approved by BNM (either under general or specific approval)

X

   

3. Receive from non-residents in ringgit for drawdown of loans

   

X

4. Receive from non-residents in foreign currency for drawdown of loans which have been approved by BNM (either under general or specific approval)

X

   

5. Borrowing in foreign currency

(a) Obtain short-term (less than 12 months) trade financing facilities in foreign currency from commercial banks in Malaysia

X

   

(b) Other than (a) above, borrow in foreign currency up to the aggregate of RM5 million equivalent from banks in Malaysia, Labuan offshore banks or any non-resident

X

   

(c) Borrow in foreign currency exceeding the aggregate of RM5 million equivalent.

 

X

 

6. Payment to another resident in foreign currency

(a) For drawdown and repayment of loans from banks in Malaysia (with BNM approval - general/specific)

X

   

(b) For all other purposes [ other than 6 (a) ]

 

X

 

7. Foreign currency accounts

(a) Convert ringgit into foreign currency for placement pending payment to non-residents for imports

 

X

 

D. MALAYSIAN INVESTORS

 

MALAYSIAN INVESTORS

Yes

Needs approval

1. Payment to non-residents in foreign currency

(a) To invest abroad in any form (e.g. purchase of property, shares), other than placement of deposits

 
  • up to RM10,000 per remittance

X

 
  • above RM10,000 per remittance

 

X

(b) As placement of deposits

 

X

2. Receipt from non-residents in foreign currency for:-

(a) Drawdown of loans which has been approved by BNM (either under general or specific approval)

X

 

(b) Dividends, interest and profits from investments abroad or proceeds from sale of investment abroad

X

 

3. Foreign currency accounts

(a) To convert ringgit into foreign currency for placement, pending payment to non-residents for the investments

 

X

(b) To retain the foreign currency derived from dividends, interest and profits from investments abroad or proceeds from sale of investment abroad

   
  • with commercial banks in Malaysia for any amount, if investor has no domestic borrowing

X

 
  • with commercial banks in Malaysia up to USD500,000 if investor has domestic borrowing

X

 
  • with Labuan offshore banks up to USD500,000

X

 
  • with Labuan offshore banks above USD500,000

 

X

  • with overseas banks

 

X

4. Borrowing in foreign currency

(a) Borrow in foreign currency up to the aggregate of RM5 million equivalent from banks in Malaysia, Labuan offshore banks or any non-resident

X

 

(b) Borrow in foreign currency exceeding the aggregate of RM5 million equivalent.

 

X

E. FOREIGN INVESTORS

 

FOREIGN INVESTORS

Yes

Needs approval

No

1. Maintain foreign currency accounts in Malaysia

(a) Use funds in account to invest in ringgit assets in Malaysia

X

   

(b) Transfer funds in this account to accounts abroad

X

   

2. Maintain ringgit External Accounts in Malaysia

(a) Use funds in account to invest in ringgit assets in Malaysia

X

   

(b) Credit the account with repatriation of offshore ringgit funds maintained with banks overseas

   

X

(c) Convert ringgit in account into foreign currency which have been invested in ringgit assets for less than 12 months

   

X

(d) Convert ringgit in account into foreign currency which have been invested in ringgit assets for more than 12 months

X

   

(e) Convert ringgit funds derived from dividends, interest, rentals, commission, fees, and profits

X

   

3. Obtain domestic loans

(a) In ringgit from banking institutions in Malaysia up to an aggregate of RM200,000

X

   

(b) In ringgit from banking institutions in Malaysia exceeding RM200,000

 

X

 

F. EXPATRIATES

 

EXPATRIATES

Yes

Needs approval

No

1. Maintain foreign currency accounts in Malaysia

(a) Use funds in account to invest in Malaysian assets

X

   

(b) Transfer funds in this account to accounts abroad

X

   

2. Maintain ringgit External Accounts in Malaysia

(a) Debit the account to pay to any party

X

   

(b) Credit the account with ringgit receipts for salaries, wages or fees

X

   

(c) Credit the account with repatriation of offshore ringgit funds maintained with banks overseas

   

X

(d) Convert ringgit in account into foreign currency for repatriation abroad up to the equivalent of salary

X

   

3. Obtain domestic loans

(a) In ringgit from banking institutions in Malaysia up to an aggregate of RM200,000

X

   

(b) Other than (a) above, in ringgit from any resident for the purchase of one residential property in Malaysia and one vehicle loan (both for personal use)

X

   

(c) Other than (b) above, in ringgit from any resident

 

X

 

(d) In ringgit from banking institutions in Malaysia exceeding RM200,000

 

X

 

G. FOREIGN WORKERS

 

FOREIGN WORKERS

Yes

Needs approval

No

1. Maintain foreign currency accounts in Malaysia

(a) Use funds in account to invest in Malaysian assets

X

   

(b) Transfer funds in this account to accounts abroad

X

   

2. Maintain ringgit External Accounts in Malaysia

(a) Debit the account to pay to any party

X

   

(b) Credit the account with ringgit receipts for salaries, wages or fees

X

   

(c) Credit the account with repatriation of offshore ringgit funds maintained with banks overseas

   

X

(d) Convert ringgit in account into foreign currency for repatriation abroad up to the equivalent of wages

X

   

3. Obtain domestic loans

(a) In ringgit from banking institutions in Malaysia up to an aggregate of RM200,000

X

   

(b) Other than (a) above, in ringgit from any resident for the purchase of one residential property in Malaysia and one vehicle loan (both for personal use)

X

   

(c) Other than (b) above, in ringgit from any resident

 

X

 

(d) In ringgit from banking institutions in Malaysia exceeding RM200,000

 

X

 

H. MALAYSIAN WORKING ABROAD

 

MALAYSIANS WORKING ABROAD

Yes

Needs approval

1. Foreign currency accounts to be opened with

(a) any commercial bank in Malaysia

  • up to USD100,000

X

 
  • above USD100,000

 

X

(b) any Labuan offshore bank

  • up to USD100,000

X

 
  • above USD100,000

 

X

(c) any overseas bank

  • up to USD50,000

X

 
  • above USD50,000

 

X

2. Remittances to the resident's foreign currency accounts

(a) In the currency of the account within the limits allowed for such accounts (as per item G 1 above)

X

 

(b) By the resident's employer

X

 

I. MALAYSIAN STUDYING ABROAD

 

MALAYSIANS STUDYING ABROAD

Yes

Needs approval

1. Foreign currency accounts opened with:

  • any commercial bank in Malaysia;

X

 
  • any Labuan offshore bank; and

X

 
  • any overseas bank

X

 

up to the amount required for one year's tuition, fees, accomodation and general living expenses.

X

 

2. Remittances to the resident's foreign currency accounts

(a) In the currency of the account up to the amount required for one year's tuition, fees, accomodation and general living expenses

X

 

(b) By the resident's parent/guardian/relative/employer

X

 

3. Remittances to institutes of higher learning in foreign currency for fees and accommodation

X

 

FURTHER CLARIFICATION

Computation of the 12 months holding period for External Account holder before ringgit may be converted into foreign currency

  • The 12 months would start from 1 September 1998, for non-residents who already have ringgit funds in Malaysia, that is they had deposited funds or had purchased ringgit assets before 1 September 1998.

  • During this one year period, the non-resident is allowed to change the type or form of ringgit asset he chooses to invest in.

  • If the non-resident converts foreign currency into ringgit and makes a ringgit deposit or purchases ringgit assets after 1 September 1998, then the 12 month period would start from the date the ringgit deposit is made or the ringgit asset is purchased. During this one year period, the non-resident is allowed to change the type or form of ringgit asset he chooses to invest in.

Submission of application forms

All applications for exchange control approval should be addressed to:

Director
Exchange Control Department
Bank Negara Malaysia
Jalan Dato' Onn
50480 Kuala Lumpur
MALAYSIA

Telephone nos: (603) 2988044 extensions 7353, 7506, 7739, 7508
Direct lines: (603) 2910772, 2910894, 2984154, 2987305, 2987304
Facsimile nos: (603) 2937732, 2912990, 2933791, 2936919


 

Bank Negara Malaysia
05 Oct 1998

© Bank Negara Malaysia, 1998. All rights reserved.