Mergers and Acquisitions in Malaysia

Updated on Sunday 04th December 2016

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Foreign investors interested in the business environment in Malaysia should know that the local mergers and acquisition (M&A) market is optimistic. M&A market in Malaysia is driven by private equity houses, as well as by the insurance industry. At the moment, Malaysian authorities conduct policies which allow foreign investors to have larger equity shares, as there is an interest to further develop the M&A industry, which is showing positive prospects. Investors who are interested in a merger or an acquisition can receive legal assistance from our lawyers in Malaysia, who can offer you consultations on matters such as due diligence, taxation, intellectual property and other issues related to a M&A transaction
 

Regulations of M&A in Malaysia  


The Malaysian government is imposing less and less strict rules and regulations for foreign investors interested in the M&A market in Malaysia. At the moment, the mergers and acquisitions are no longer regulated by provisions which slowed down the foreign investments; instead, the local authorities have decided to eliminate the equity conditions, which are still in force for M&A happening in strategic sectors. 

M&A with a value above 20 million MYR, which affects the ownership interests of the indigenous population in Malaysia (Bumiputera), will require the approval of the Economic Planning Unit

Another important aspect for the foreign businessmen is that the local legislation in the field of M&A stipulates that foreign interest can acquire property only if the total value of the M&A is higher than 1 million MYR; our lawyers in Malaysia can offer you further details on this provision. 

Our lawyers invite you to watch a short video about mergers and acquisitions in Malaysia
 

Taxation of M&A transactions  

The transactions in the mergers and acquistions field are regulated by the Income Tax Act (ITA) 1967, which specifies the taxes applicable to M&A deals occuring in Malaysia

As a general rule, the purchase price in an M&A is not deductible; still, ITA provides that companies in the field of information and communication technology will receive capital allowance for equipment having a life span of maximum of 2 years. 

If you need further information on the M&A in Malaysia, please contact our law office for assistance. 

Comments

Jane

February 22, 2016

I believe that the local business market will have positive results with the new Malaysian mergers and acquisitions regulations.



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