Under the new exchange control rules, the repatriation of ringgit funds by non-residents arising from the receipt of dividends, interest, rental, fees, commissions or profits are allowed.

The following is to clarify the procedures involved in the repatriation.

Dividends, interest, rental, fees, and commissions

The remitting bank should exercise due dilligence and care when approving applications for the repatriation of dividends, interest, rental, fees or commissions due to non-residents. Remitting banks should sight the necessary documentary evidence to substantiate the applications for repatriation of these type of funds before effecting the transaction. The remitting banks must be satisfied that the transactions are genuine.

The following are the guidelines on documentary evidence to be sighted:-

1. documentary evidence should be reflective of current market conventions/practices (example dividend vouchers for dividend payments);

2. where a resident payer is requested to provide a letter of confirmation on the nature of the funds payable to or paid to the non-resident (for example for fees or commissions), such letters should be signed by the treasurer/financial controller/ or persons of similar authority; and

3. remitting banks must introduce measures to ensure that documentary evidence provided by the applicants are not re-used to effect several transactions, such as "rubber stamping" documents to indicate conversion to foreign currency has taken place.

Requirement for prior approval

With immediate effect, all payments by residents to non-residents for profits/capital gains due to the non-resident, or conversion of ringgit derived from profits / capital gains into foreign currency by External Account holders, would require prior approval of the Controller of Foreign Exchange.

Applications for repatriation of profits or capital gains arising from the sale of ringgit assets in Malaysia due to non-residents, should be submitted to the Controller of Foreign Exchange, with relevant documentary evidence as well documentary proof that any tax (where applicable) payable to the Malaysian Inland Revenue on the capital gains or profits have been settled.

Repatriation of proceeds other than profits or capital gains, such as dividends or interest income, can continue to be approved by the banks, subject to the guidelines in paragraph 3.

for the Controller of Foreign Exchange

Md. Radzi bin Haji Kechik
Director
Exchange Control Department