Foreign Exchange Administration

To broaden accessibility of foreign investor and corporate to onshore FX market, offshore non-resident financial institution may participate in the Appointed Overseas Office (AOO) framework which accords additional flexibility on ringgit transactions. The flexibilities.

• FX hedging (own account /on behalf of client) for current and financial account based on commitment
• Opening of ringgit account for book-keeping purposes for a non-resident
• Extension of ringgit trade financing

• Retention of up to 25% of new foreign currency proceeds from 5 Dec onwards from resident exporter’s export of goods. The balance of foreign currency proceeds from the exports of goods shall be converted into ringgit with a licensed onshore bank and be eligible for a Special Deposit Facility (SDF) yielding 3.25% p.a rate until 31 Dec 2017.
• Foreign Currency Account I and Foreign Currency Account II shall be replaced with Trade Foreign Currency Account and Investment Foreign Currency Account.
• A resident without domestic ringgit borrowing is allowed to undertake any amount of investment in foreign currency asset onshore for its own account or on behalf of clients
• A resident with domestic ringgit borrowing is allowed to undertake investment abroad and investment in foreign currency asset onshore up to RM 50 million equivalent in aggregate per calendar year via its Investment Foreign Currency Account.
• A resident individual, sole proprietor or general partnership with domestic ringgit borrowing is allowed to undertake investment abroad and investment in foreign currency asset onshore
  – Up to RM10 million equivalent of foreign currency borrowing from licensed onshore bank or a non-resident.
  – Up to RM1 million equivalent in aggregate per calendar year using funds from conversion of ringgit, swapping of financial assets and transfer from Trade FCA.