"MALAYSIA - MY SECOND HOME" PROGRAMME

R U INTERESTED IN REAL ESTATE INVESTMENT IN MALAYSIA ?


In line with the Malaysian Government's continuing commitments and liberalisation policy, foreigners could now purchase residential properties worth more than RM250,000.00 (USD70,600.00) a unit, without having to seek approval from Foreign Investment Committee (FIC).

FIC is under the control of Economic Planning Unit in the Prime Minister's Department. A Prime Minister's office statement mentioned that our Prime Minster, Datuk Seri Abdullah Ahmad Baduri has recently approved this new ruling. It said that there would no longer be a limit to the number (units) of residential properties that foreigners can own or any restrictions/conditions upon their usage.

In the past, FIC's approval must be obtained first before foreigners can purchase any residential properties, except that it is purchased for their own occupation/use only.

This latest relaxation in FIC's ruling would definitely augur well for the overal development of the local property sector, in particular high-end residential projects . Besides spurring the real estate and construction sub-sectors, it may increase the flow of foreign currency and may also boost the inflow of foreign direct investments, going forward.

Comparatively, High-end residential property prices in Klang Valley (Kuala Lumpur region), Southern Johore and Penang Island, are relatively cheaper than that in Singapore, therefore, it is HIGH TIME FOR FOREIGNERS to purchase residential properties, be it for own use or investment, or for those planning to participate in the "Malaysia - My 2nd Home" program.

KILLING 2 BIRDS WITH ONE STONE !

Yes, participating in this MM2H program will also giving you a golden opportunity to make an investment in the property/real estate markets which has good growth potential.

Effective Dec. 23, 2006, each participant of the MM2H program is allowed to purchase up to two units of residential houses at a minimum price of RM250,000 nation wide, except for the state of Sarawak (East Malaysia) whose minimum house price has remained at RM300,000.

Previously, the minimum price for the purchase of houses in Malaysia is set at:-

- RM350,000 and above each for certain areas in Sarawak.
- RM250,000 and above each for the states of Penang, Melaka and Johor ; and
- RM150,000 and above for other states in Malaysia.

CAPITAL CONTROLS ??? THREAT OF A REPEAT OF THE ASIAN FINANCIAL CRISIS IN 1997/98 ???

In June 1997,currency speculators attacked Thai baht causing its currency to dip by more than 35%...during 1997/98 Asian financial crisis.
Malaysia's central bank, BNM (Bank Negara Malaysia) in reaction to the regional currency crisis, imposed a series of capital control in Sept 1998 which shocked the financial/currency markets.
This drastic measure,according to BNM was to ward off currency speculators, after the Malaysian Ringgit (RM) fell (from RM2.50 - prior to the crisis) against the US dollar. BNM on 2.9.98 pegged the local currency at RM3.80 to the US dollar.
However, in June 2005 (after more than 6 years) BNM dismantled almost all of the capital controls, including removing the ringgit 3.80 peg against the US dollar.

Two days ago,Thailand's central bank 'shocked' the Asian financial and currency markets again ! - - by unexpectedly imposed restrictions on capital inflows into that country, to curb speculation on the baht !!!
This anti-speculation (of currency) move not only sent jitters in several Asian currency/money markets, but also weaken Asian bourses.
It triggered Thailand's stock market to plunge 108 points (almost 15%)- biggest one-day fall since 1990 ! - Losses ? - more than US$20 billion (or RM 72 billion)!
The Malaysian stock market fell as much as 35 points - its largest one-day dip in 5 years, before closing 21 points lower.
BNM - Malaysia central bank assured the investors that Malaysia is not going to follow Thailand, to impose capital controls. BNM said that they are in fact,, still on the mode of liberalising Malaysia's financial system progressively, in order to attract more foreign investments into the country.

THE SAID CONTROLS :-
- ALL THAILAND'S FINANCIAL INSTITUTIONS ARE REQUIRED TO WITHHOLD 30% OF FOREIGN CURRENCIES BOUGHT OR EXCHANGED AGAINST THE THAI BAHT
- IMPOSITION OF A 10% PENALTY FOR WITHDRAWAL OF FOREIGN FUNDS THAT HAD BEEN IN THAILAND FOR LESS THAN A YEAR.
EXEMPTIONS :-
- THOSE FOREIGN EXCHANGE TRANSACTIONS RELATED TO COMMERCIAL TRADES IN GOODS AND SERVICES OR REPATRIATION OF INVESTMENTS ABROAD BY RESIDENTS ARE EXEMPTED.
- FOREIGN EXCHANGED TRANSACTIONS WHICH HAVE BEEN TRADED PRIOR TO THE CAPITAL CONTROLS IMPOSED, ARE ALSO EXEMPTED FROM THE 'RESERVE REQUIREMENT ON SHORT-TERM CAPITAL INFLOW'.

LATEST !!!
THAILAND'S FINANCE MINISTER,SUBSEQUENTLY (one day after the control) EASED CURRENCY CONTROLS ON FOREIGN INVESTMENTS INTO THE STOCK MARKET, AFTER 15% SHARE PLUNGE CAUSED BY EARLIER IMPOSITION OF RESTRICTIONS.

COMMENTS :
Given the fact that Malaysia's fundamentals still remained strong and BNM's policy of gradual and sequenced liberalisation of the financial/currency markets, it is unlikely Malaysia will impose another capital controls.