Remittance

It is a set of rules administered by Bank Negara Malaysia (BNM) based on the provisions set forth under the Financial Services Act 2013 and the Islamic Financial Services Act 2013 to safeguard the balance of payments position or value of ringgit.

It comprises of the following:

1. Interpretation
2. DECLARATION ON ENTITIES CREATED, INCORPORATED, etc. IN LABUAN

3. Notice 1    :    DEALINGS IN CURRENCY, GOLD AND OTHER PRECIOUS METALS;

4. Notice 2    :    BORROWING, LENDING AND GUARANTEE;

5. Notice 3    :    INVESTMENT IN FOREIGN CURRENCY ASSET;

6. Notice 4    :    PAYMENT AND RECEIPT;

7. Notice 5    :    SECURITIES AND FINANCIAL INSTRUMENTS;

8. Notice 6    :    IMPORT AND EXPORT OF CURRENCY;

9. Notice 7    :    EXPORT OF GOODS; and

10. DIRECTION ON DEALINGS WITH SPECIFIED PERSON AND IN RESTRICTED CURRENCY.

Minimum Due Diligence (MDD) Guide for Foreign Exchange Rules

The Association of Banks in Malaysia (ABM) and Association of Islamic Banking and Financial Institutions Malaysia (AIBIM) have prepared the following MDD Guides to outline the industry standard practice to be adopted by a licensed onshore bank (LOB), and by extension its Appointed Overseas Office (AOO), when dealing with their clients in relation to the Foreign Exchange rules, either directly with the LOB or via the AOO:

It comprises of the following:

1. MDD Guide for Notice 1;
2. MDD Guide for Notice 2;

3. MDD Guide for Notice 3;

4. MDD Guide for Notice 4; and

5. MDD Guide for Notice 7.

This MDD guide shall be read together with prevailing the Foreign Exchange Policy Notices issued by Bank Negara Malaysia.

• The Foreign Exchange Policy and MDD Guides can be viewed at Bank Negara Malaysia’s website i.e. https://www.bnm.gov.my/fep.
• It would be encouraged to occasionally visit the above mentioned website as Bank Negara Malaysia or ABM/AIBIM may revise/update the Foreign Exchange Policy or MDD Guide(s) respectively from time to time.

1. Transaction between a Resident and a Non-Resident in ringgit (RM);
2. Transaction between a Non-Resident and another Non-Resident in RM;
3. Transaction between a Resident and a Non-Resident in foreign currency (FCY); and
4. Transaction between a Resident and another Resident in FCY.

1. Transaction between a Resident and another Resident in Ringgit; and
2. Transaction between a Non-Resident and another Non-Resident in Foreign Currency.

1. What type of borrowing transactions can I perform with The Bank under the Foreign Exchange Policy?
   1. Borrowing by Resident Individual, Sole Proprietor or General Partnership 
   2. Borrowing by a Resident Entity
   3. Borrowing by Non-Resident
2. What type of investment transactions can I perform with The Bank under the Foreign Exchange Policy?
   1. Investment by Resident Individual, Sole Proprietor or General Partnership in Foreign Currency Asset
   2. Investment by Resident Entity in Foreign Currency Asset
   3. Investment by Non-Resident Entity in Foreign Currency Asset
3. What type of payment transactions can I perform with The Bank under the Foreign Exchange Policy?
   1. Payment in Foreign Currency between Residents
   2. Payment in Ringgit between Non-Residents and Resident
   3. Payment in Foreign Currency between Residents and Non-Resident
   4. Payment in Ringgit/Foreign Currency between Non-Residents
4. Treatment of Proceeds of Export of Goods under the Foreign Exchange Policy
   1. What is my obligation as a Resident Exporter when receiving Proceeds of Export of Goods?
   2. What is my obligation as a Non-Resident when making payment for goods purchased in Ringgit to a Resident Exporter? 

• No person (Resident and Non-Resident) in Malaysia shall undertake or engage in any dealing or transaction with a Specified Person or in a Restricted Currency.
• Such dealings include any forms of dealing not limited to account opening and inward/outward remittances payment transaction.

Bank Negara Malaysia (BNM)’s prior approval is required to be obtained if the transaction:

1. does not meet the permissible purpose or uses/sources of funds;
2. will exceed/has exceeded the permissible limit; or
3. involves any dealing or transaction with the State of Israel or its governmental organization, authority or agency, or a natural person who is a citizen or permanent resident of the State of Israel or its currency

Any application for approval is to be submitted via BNM’s Foreign Exchange Policy submission system at https://fep.bnm.gov.my/fep-pub/login.

Any enquiries related to the Foreign Exchange Policy (FEP) may be directed to Bank Negara Malaysia by completing and submitting an online Enquiry Form via their FEP Public Portal i.e.

https://fep.bnm.gov.my/fep-pub/online-enquiry-form