State Consent for a Non-Citizen Buyer

What this state consent foreign buyer Malaysia guide covers

A transfer to a non-citizen cannot be registered until the State Authority has approved it. This is not a formality that runs alongside the purchase. It is a condition of the purchase, and it is the part of the timeline that is hardest to predict.

What section 433B says

Section 433B(1) of the National Land Code provides that a dealing in land involving a non-citizen or a foreign company may proceed only after the prior approval of the State Authority has been obtained, on a written application.

Two points follow from the wording. The approval must be prior, so it cannot be regularised afterwards. And it is discretionary, so meeting the price threshold does not entitle you to it.

Section 433B(3) carves out charges and liens. A bank taking a charge over the property does not need its own 433B consent for the charge, although the underlying acquisition still does.

Section 433B(4) deals with auctions. A non-citizen or foreign company may not bid at auction for land in the agriculture, building or industry categories without approval.

What goes into the application

The application goes to the State Authority through the relevant land office. What it contains varies by state, but in practice it covers the identity and nationality of the buyer, the title particulars, the purchase price, the intended use, and evidence that the price meets the state minimum.

For a corporate buyer, the state will look at the shareholding to decide whether the company is foreign owned within the meaning of the Code. That means the constitution, the certificate of incorporation and the register of members.

Each state charges its own application fee.

How long it takes

This is the honest answer: it varies, and no lawyer can give you a firm date. Some states turn applications around in a couple of months. Others take longer, particularly where the file goes to a committee that sits periodically.

What this means practically is that a sale and purchase agreement for a non-citizen buyer should not carry the ordinary three month completion period. It needs a longer period, and it needs a clear provision for what happens if consent has not issued by then.

The clause that protects you

The agreement should say that completion is conditional on consent being obtained, and it should say what happens if consent is refused or not obtained within the agreed period. Normally that means the agreement ends and the deposit is refunded without deduction.

Without that clause you are exposed. If consent is refused and the agreement treats it as your default, you can lose the deposit on a transaction that was never capable of completing.

This is the single most important thing to get right in a foreign purchase, and it has to be in the agreement before you sign, not negotiated later.

When consent will not help

Some properties are closed to a non-citizen regardless of consent. Malay reserve land, Bumiputera allocated units and low cost housing fall outside what the State Authority can approve.

The land search tells us which of these apply before you are committed. See our page on conveyancing for foreign buyers for how the whole matter runs, and the minimum price guide for the threshold your purchase has to clear.

Frequently asked questions about state consent foreign buyer Malaysia