21st September 1999       Source : Bank Negara Malaysia
 

Issues

Clarification - Part 13

82 The amount of levy to be imposed on repatriation of funds with immediate effect.
  • All funds brought in between 1 September 1998 and 14 February 1999 are exempted from levy on principal.  
  • All principal and profits from existing External Accounts (EA) can be repatriated or transferred to Special External Accounts (SEA) without payment of levy.  
  • All profits repatriated from SEA, irrespective whether arising from investments using old funds or new funds, will be subject to a standard levy of 10%.
83 Maintenance of EA and SEA   ·        For non-residents who currently maintain EA and SEA, they may –  

(a)   Continue to maintain separate EA and SEA; or 

(b)   merge their EA and SEA into one account, i.e., the SEA.  

·        For nonresidents who choose to maintain separate accounts, funds in the EA used for further reinvestments will be automatically channeled into the SEA. 

·        For nonresidents who currently maintain only EA and do not have any SEA, they may – 

(a)   open SEA and transfer funds in the EA into SEA as principal for reinvestment purposes; or 

(b) convert the EA into SEA and all funds in the EA are deemed to be transferred into the SEA as principal. 
84 Transfer of investment in the form of cash and securities upon merging of EA and SEA   ·        Cash transferred from EA to SEA are to be recorded as injection of principal into the SEA. 

·        Outstanding investment in the form of securities from the EA would be valued at the closing market price of the last trading day before the accounts are merged or new SEA are opened/deemed to be opened. The computed value is added to the principal sum of the SEA.
85 General rules on imposition of levy for repatriation of profits from SEA ·        Computation of profits will be based on per account basis, the amount of cash balance over and above the principal sum in the SEA is the realised profit to be repatriated. 

·        Documentary evidence will only be required to prove that the funds to be remitted are non-levyable, e.g., dividends, interest, rental incomes and profits arising from investment in securities traded on the MESDAQ. 

·        Remitting banks which have in place a system to record evidences of funds not attracting levy may remit such funds without sighting documentary evidences, provided a blanket approval have been granted by Bank Negara Malaysia to the remitting banks. 
86 Maintenance of Designated External Account (DEA) by non-resident for trading on COMMEX and KLOFFE  and Designated Current Account (DCA) by Clearing and Non-clearing Members of the Exchanges   ·        All commercial banks in Malaysia are allowed to open –

(a)   DEA for nonresidents for the purpose of facilitating trading on the two Exchanges and DCA for their clients; and 
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