Malaysia to ease rules on foreign investment: report

Malaysia to ease rules on foreign investment: report

Agence France-Presse, Kuala Lumpur

Malaysia will ease procedures for foreigners to buy property and major stakes in local companies as part of efforts to boost the country's competitiveness, reports said on Saturday.

The move follows a series of reform initiatives by Prime Minister Abdullah Ahmad Badawi to cut red tape and increase government transparency since taking over as premier from Mahathir Mohamad last year, the New Straits Times said.

From August, rules for property transactions as well as acquisitions of interests, mergers and takeovers of local companies for foreign investors under the Foreign Investment Committee (FIC) will be simplified to cut down the current two months' processing time, the newspaper said.

Investors will be required only to make a declaration in a prescribed format that they have or will fulfill the conditions stipulated, it said.

Abdullah, who is also finance minister, was quoted as saying that the move was in line with the government's aim to be more investor-friendly. The FIC will thus become a facilitator, rather than a clearing house of applications, he said.

"The onus therefore, is on those making the declarations to fulfill their obligations. This new approach operates on the principle of self-assessment, self-disclosure and trust as well as corporate and individual responsibility," he said.

Although Malaysia has sufficient domestic liquidity, foreign investment is key to ensuring technology transfer in its quest to become a knowledge-based economy by 2020 and reduce a serious budget deficit, analysts said.