Malaysia Establishes Guidelines to Permit Foreign Fund Management Companies

Washington, DC, December 1, 1997 - Malaysia will currently permit foreign-owned asset management companies to provide investment management services there. Malaysian guidelines establish two options for foreign asset management firms to establish a commercial presence in Malaysia, depending upon whether the foreign firm will provide services solely to clients outside Malaysia or will also seek to provide asset management services to Malaysians. Under the guidelines, a foreign firm may establish a 100% owned affiliate in Malaysia if the affiliate provides asset management services solely with respect to assets sourced from outside Malaysia. To provide services also to Malaysian clients, a foreign firm is limited to holding no more than a 70% ownership share in the affiliate and the affiliate, among other things, must have at least $100 million in assets under management sourced from outside Malaysia.