Foreign land ownership in Malaysia, explained: no statutory bar, one permission gate.

Can a foreigner really own the land in Malaysia?

Yes. The National Land Code contains no prohibition on a non-citizen natural person holding alienated land, freehold landed property included, registered in their own name. Section 433B(1) provides that a non-citizen may acquire land and that a dealing may be effected in their favour, but only after the prior approval of the State Authority.

Section 433A defines a non-citizen as a natural person who is not a citizen of Malaysia. So the name on the register can be the foreign buyer's own, and a Malaysian permanent resident is still a non-citizen for Part 33A and still needs the approval.

This is a statement about Malaysian law, not a ranking. Other markets in the region also permit foreign freehold ownership of strata property, so the useful fact is what the Code allows, not a comparison.

Why is this a permission rather than a right?

Because the approval comes first and the consequences of skipping it are hard. Section 433B(2) lets the State Authority attach terms, conditions and a prescribed levy. Section 433G makes the levy payable within thirty days of the notice of approval, failing which the approval lapses. Section 433C makes a dealing in contravention null and void.

• Where a disposal falls outside the section 433B(1) categories, section 433E(1) puts the approval duty on the disposing party, and section 433E(3) makes a contravention an offence carrying a fine of not less than RM100,000.
• No approval is needed for a non-citizen to take a charge, a lien or a lease over alienated land (section 433B(3)). A foreign lender can hold security without approval. A foreign buyer of the land itself cannot.
• At auction, where an order for sale has been made under section 256, 263 or 281, a non-citizen may not bid on land in the agriculture or building category, or land subject to a condition requiring agricultural or building use, without State Authority approval (section 433B(4)). Land in the industry category is outside that bar (section 433B(5)).

Does the National Land Code set a minimum purchase price?

No. There is no minimum purchase price anywhere in the Code. Part 33A creates a consent requirement and a levy power and sets no figure. Every price floor a foreign buyer meets in Malaysia is state policy or federal guideline policy, which is why the figures move without any amendment to the statute.

That changes how you read a number you are quoted. A statutory rate has a gazette behind it. A policy floor has a state executive decision behind it, and those are not all published in English on a state website, which is why a figure has to be dated and confirmed with the state.

The floors, state by state, with their dating: Malaysia minimum purchase price by state.

Which states limit the kind of title a foreigner can hold?

Two, on the published state table stated as at October 2024. Selangor permits a foreign buyer strata and landed-strata titled properties only, and states that landed individual titles are not permitted. Perak states that as of September 2023 non-citizens and foreign companies cannot acquire, own, hold or inherit freehold property, leaving 60-year leasehold.

Perak's row also restricts the route in: the leasehold is taken direct from a developer, and residential subsale is not permitted. Melaka limits a foreign buyer to 2 residential units and 3 commercial units, and adds a restriction on transferring or leasing within five years of registration of the Form 14A transfer, enforced by a registrar's caveat lodged for 60 months.

All three rows are stated as at October 2024, per Bar Council Malaysia Circular 444/2024, which advises readers to consult the relevant state authority for changes to the requirements and conditions.

Which categories of Malaysian property are closed to a foreign buyer?

Four nationally, as the Bar Council reproduces the property acquisition guideline: property valued at less than RM1,000,000 per unit, residential units in the low-cost and medium-low-cost categories as determined by the State Authority, property on Malay Reserved Land, and property allocated to Bumiputera interests in a development project as set by the State Authority.

• Several states restate the Malay Reserved Land category in their own rows, including Kedah, Negeri Sembilan and Johor. Negeri Sembilan also names tanah adat, and Melaka names Malacca Customary Land.
• States exclude house types as well as prices. Kedah names single-storey terrace houses, low-cost houses and Bumiputera-quota houses. Melaka and Johor name single-storey and one-and-a-half-storey terrace houses.
• Property sold by auction is excluded as a matter of state policy in Kedah, Penang, Selangor, Negeri Sembilan, Melaka and Johor, on top of the statutory bar in section 433B(4).
• Agricultural land is largely closed. Selangor, Pahang, Terengganu and Sarawak read not permitted. Perak permits it under a Homestead concept only. Johor allows RM1,000,000 and above or a land area of more than 15 acres, whichever is higher.

Does the National Land Code apply in Sabah and Sarawak?

No. It applies to the eleven Peninsular states and the Federal Territories of Kuala Lumpur, Putrajaya and Labuan. Sabah runs the Sabah Land Ordinance and Sarawak runs the Sarawak Land Code. The Bar Council publishes foreign-buyer thresholds for both states alongside the Peninsular ones.

So any sentence about Malaysian land law is a sentence about the Peninsula plus the three federal territories unless Sabah and Sarawak are named. Sarawak is also the one state where two published sources give different figures: the state table sets both out.

What about buying through a company, or signing by power of attorney?

Both are caught by Part 33A. A foreign company under section 433A is one incorporated outside Malaysia, or a Malaysian company with 50% or more of its voting shares held by a non-citizen. A deed executed by a non-citizen under a power of attorney is void, and incapable of registration, unless approval was not required (section 433F(1)).

The definition reaches one step further: a Malaysian company 50% or more owned by such a foreign company is also a foreign company. The 50% figure replaced an earlier 30% threshold under amending Act A1104, and voting-share ownership is tested at the time of the proposed acquisition or at execution of the instrument.

Section 433F matters to a buyer completing from overseas: settle the consent position before anyone signs under a power of attorney. One more trap in the text itself. The industrial-land exemption that used to sit in the proviso to section 433B(1) was deleted by the National Land Code (Amendment) Act 2016 [Act A1516], in force 1 January 2017, so an older printed copy of the Code still shows an exemption that no longer exists.

Header photo: AyyanD, CC BY-SA 4.0, via Wikimedia Commons. All credits: image credits.