1. The Controller shall declare an Offshore Company or Foreign Offshore Company as non-resident for exchange control purposes, subject to the condition that, upon incorporation or registration under the Offshore Companies Act 1990, a certified true copy of each of the following documents field with or issued by the Register of Companies is submitted to the Controller -
1.1 Offshore Company
Form 6 - Statutory Declaration of Compliance; and
Form 7 - Certificate of Incorporation of Offshore Company; or
Form 8 - Certificate of Registration of Foreign Company asBeing Continued in Labuan.
1.2 Foreign Offshore Company
Form 28 - Statutory Declaration by Trust Company As Agentof Foreign Company; and
Form 29 - Certificate of Registration of Foreign Offshore Company.
Provided where the Offshore Company or Foreign Offshore Company is also a Licensed Offshore Bank or a Licenced Offshore Insurance Entity, the non-residentﾓ declarations by the Controller shall only take effect after the entities are licensed under the Offshore Banking Act 1990 or the Offshore Insurance Act 1990, as the case may be.
2. The Controller hereby gives permission to -
2.1 Offshore Companies, Foreign Offshore Companies, Licensed Offshore Banks and Licensed Offshore Insurance Entities(hereinafter referred to as Offshore Entities) to open one or more External Accounts in Malaysia solely for the purpose of defraying their administrative and statutory expenses, including the granting of loans to staff pursuant to the terms and conditions of service, and, in the case of Licensed Offshore Insurance Entities, also for the purpose of reinsurance of domestic insurance business - Provided the External Account shall be funded by Ringgit from the sale of foreign currencies or the proceeds of credit facilities in Ringgit as permitted in ECM 6.
2.2 Offshore Entities to open one or more foreign currency accounts in outside Malaysia.
2.3 Offshore Entities to buy, borrow, sell or lend foreign currency with an authorised dealer, a Licensed Offshore Bank or any non-resident.
2.4 Licensed Offshore Banks to buy, borrow, sell or lend foreign currency and to do any act which involves, is in association with, or is preparatory to buying, borrowing, selling or lending any foreign currency, subject to the following conditions -
2.4.1 Open only foreign currency accounts, including current accounts, but excluding checking accounts, for any non-resident and resident;
2.4.2 Extend only foreign currency credit facilities of any amount to any non-resident and resident;
2.4.3 Undertake foreign exchange transactions, including forward and spot purchases and sales, only with non-residents and authorised dealers;
2.4.4 Make payments on behalf of non-residents; and
2.4.5 Make payments to non-residents on behalf of residents, provided -
2.4.5.1 The funds for payments are proceeds of approved foreign currency credit facilities obtained by residents from Licensed Offshore Banks or funds in permitted foreign currency accounts; and
2.4.5.2 The payments to Malaysia are only for credit into the residentsﾕ own foreign currency accounts with authorised dealers or payments to authorised dealers or licensed merchant banks in relation to foreign currency credit facilities obtained from the latter institutions, unless permitted otherwise by the Controller.
3. The prior permission of the Controller is required for -
3.1 Offshore Entities to fund their External Accounts in Ringgit, otherwise than as permitted in paragraph 2.1;
3.2 Licensed Offshore Banks to undertake any foreign exchange transaction, including remittances(other than as permitted in paragraph 2.4.5), forward and spot purchases and sales, with or on behalf of residents other than an authorised dealer, or
3.3 All transactions of Offshore Entities with Specified Persons or in Restricted Currencies.
4. Offshore Entities are not permitted to -
4.1 Accept deposits, including currency deposits, in Ringgit from any non- resident or resident;
4.2 Extend or raise any credit facilities in Ringgit on behalf of non-residents or residents, other than the extension of Ringgit credit facilities to their staff pursuant to the terms and conditions or service;
4.3 Open any Ringgit account, except for the purposes permitted in paragraph 2.1; or
4.4 Obtain credit facilities in Ringgit from any resident, other than as permitted in ECM6.