Bank Negara Malaysia (BNM) Foreign Exchange Policy (FEP) FAQ

Limits to investments in foreign currency assets per calendar year do not apply to Non-Residents.

1. up to RM1 million equivalent in aggregate per calendar year using funds aggregated from:
   • the conversion of ringgit into a foreign currency, including through the use of ringgit-denominated credit cards
   • the swapping of ringgit-denominated financial assets in Malaysia for financial assets in the Labuan entity, or outside Malaysia
   • Trade FCA transfers
2. up to RM10 million equivalent in aggregate using funds from foreign currency borrowing/financing obtained from a Licensed Onshore Bank or Non-Resident
   
   Note: The limit specified above is the combined limit applicable to Resident Individuals, Sole Proprietors and Partnerships with domestic ringgit borrowing. Resident Individual, Sole Proprietor and Partnership with domestic ringgit borrowing share a combined limit of RM1million in aggregate per calendar year for investments into Foreign Currency Asset Onshore and Offshore.

Investment in Foreign Currency Asset Onshore includes but is not limited to foreign currency denominated as:

• Deposit account
• Bonds or Sukuk
• Structured investment
• Unit trust
• Dual currency investment (where base currency is ringgit)
   

Investment in Foreign Currency Asset Offshore includes but is not limited to transactions such as:

• Telegraphic Transfers for any types of investment purpose such as stocks, bonds, mutual funds or purchase of real estate offered outside Malaysia
• Any Global Transfers (except for education or employment abroad)
• Foreign currency borrowing to a Non-Resident
• Transfers to your own accounts overseas, regardless of payment purpose – these will also be classified as investment in foreign currency asset offshore

You can only perform Telegraphic Transfers at a branch with supporting documents for the purpose of settling education or employment abroad or for any investment purposes.

The applicable limit does not apply to the settlement of education, employment or real estate purchases abroad for your own or an immediate family member's accommodation due to education, employment or migration abroad.

No limit applies to investments in foreign currency assets onshore and offshore unless they're funded by foreign currency borrowing / financing obtained from a Licensed Onshore Bank or Non-Resident. In which case, they'll be subject to a limit of up to RM10 million equivalent in aggregate.

An External Account is an account in ringgit, opened with any financial institution in Malaysia by:

Note: For the full and actual definitions, please refer to BNM website.

There's no limit.

This remittance is subject to a RM1 million equivalent aggregate limit per calendar year due to the conversion of ringgit in the Resident's foreign currency account.

The prudential limit will not apply, provided that the borrowing is permitted under Notice 2 of FEP.

They are considered to have domestic ringgit borrowing due to the overdraft facility, even if it's undrawn.

Therefore, their transfer into their foreign currency funds deposit with another bank is subject to the investment in foreign currency assets limit of RM1million.

This Telegraphic Transfer is subject to the RM1 million equivalent aggregate limit per calendar year. That's because the transfer is to their own account first, even though the eventual remittance is for education purposes.

The limit won't apply if the Resident makes the payment directly to the university after converting ringgit to the foreign currency.

Yes, investments made when the Resident Individual did not have domestic ringgit borrowing are included in the computation of investments in foreign currency assets during the calendar year.

No, they will not be subject to the investment in foreign currency assets limit once they've paid back their domestic ringgit borrowing.

No, a Resident can invest any amount in a foreign currency asset offshore if the property is for the accommodation of the Resident or their immediate family members.

Note: This transfer can only be performed at a branch with supporting documents such as the Sales & Purchase Agreement and a student visa.

This is subject to an RM1 million equivalent aggregate limit per calendar year because its purpose is to invest in foreign currency assets onshore or offshore.

The limit on investments in foreign currency assets applies if any of the account holders have domestic ringgit borrowing. As such, the investment into foreign currency assets will be subject to a combined limit of RM2 million per calendar year (RM1 million per Resident Individual).

No, a Resident Individual must submit documented evidence of a committed education plan such as an enrolment letter from the foreign school or institution. Otherwise, the purchase will be subject to the Investment in Foreign Currency Assets limit.

Can a Resident Individual use a ringgit-denominated credit card to invest in derivatives such as options and swaps offered by a Non-Resident?

First of all, the Resident will need to assess if the futures are non-exchange rate derivatives. If they are, it is permitted but subject to the investments in foreign currency assets limit as the Resident is a domestic ringgit borrower.

However, if the futures are exchange rate derivatives, the Resident will need approval from BNM before making the investment.

No, because the private limited company and the individual are treated as separate legal entities.

Yes, under Notice 3 of FEP, a Resident Individual, Sole Proprietor and general Partnership share a combined limit of RM1 million for investments in foreign currency assets.

As such, the Resident Individual can only own up to RM400,000 in investments in foreign currency assets under their sole proprietorship. They must obtain prior approval from BNM for amounts above that limit.

No, this is deemed as payment for goods. All payments for goods and services between Residents must be made in ringgit.

Payments between Residents and Non-Residents in foreign currency are generally permitted except in the following settlements:

Yes.

No, they will still be considered a Non-Resident but they fall within the exempted category.

To be considered a Resident, a person must both obtain permanent residency in Malaysia and live in Malaysia.

HSBC can facilitate payments, receipts or transfers, to or from an external account for any purpose up to a limit of RM10,000 per transaction.

No, a Non-Resident is not allowed to settle offshore assets with another Non-Resident in ringgit. They must obtain prior approval from BNM to do so.

Payment for goods and services between Residents must only be made in ringgit. This includes when the payment is made by another party on behalf of the Resident. Invoices can be issued in a foreign currency but the payment must be made in ringgit.

Note: Payment in foreign currency between Residents is permitted by BNM for domestic trade in goods or services between a Resident exporter and Resident entities involved in global supply chain operations in Malaysia, subject to specified conditions.

Yes, it's permitted under Notice 4 of FEP where payment in foreign currency between immediate family members is allowed for any purpose.

First of all, they will need to assess whether the futures are considered to be exchange rate derivatives. If they are, the investment is not permitted without prior approval from BNM.

Yes. Transfers between external accounts belonging to the same account holder are allowed.

If the Non-Resident is in the exempted category, they're allowed to remit more than RM10,000 per transaction. Otherwise, they're subject to a limit of RM10,000 per transaction.

They're deemed as being in the exempted category if they are:

Yes, provided that the repatriation is made in foreign currency and the conversion is undertaken in accordance to Part B of Notice 1 of FEP.

No, this is not permitted. No person in Malaysia shall undertake or engage in any dealing or transaction with a specified person or in a restricted currency.

Restricted currency means Israeli currency note or coin that's legal tender in the State of Israel, ie New Israel Shekel.

Specified person means the State of Israel or its governmental organisation, authority or agency, or a natural person who is a citizen or permanent resident of the State of Israel.

Note: For full and actual definition, please refer to BNM website.

The amount has to be reasonable. The Resident Individual must provide documented evidence that substantiates education or employment abroad. The amount that's allowed to be converted will depend on the supporting documents produced by the Resident Individual.

Please seek prior approval from BNM and provide the approval letter to perform the transaction.

Please inform the bank or your Premier Relationship Manager immediately. If you have an approval letter from BNM, please provide a copy to the nearest branch.

You may contact your Premier Relationship Manager, any of our branch staff or our contact centre at 1300-88-1388 (local) / +603 8321 5400 (international). Alternatively, you may also visit www.bnm.gov.my to find out more about BNM Foreign Exchange Policy.