1. The Controller shall declare an Offshore Company or Foreign Offshore Companyas non-resident for exchange control purposes, subject to the condition that, uponincorporation or registration under the Offshore Companies Act 1990, a certifiedtrue copy of each of the following documents field with or issued by the Registerof 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 LicensedOffshore Bank or a Licenced Offshore Insurance Entity, the non-residentÓ declarationsby the Controller shall only take effect after the entities are licensed under theOffshore 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 andLicensed Offshore Insurance Entities(hereinafter referred to as Offshore Entities)to open one or more External Accounts in Malaysia solely for the purpose of defrayingtheir administrative and statutory expenses, including the granting of loans to staffpursuant to the terms and conditions of service, and, in the case of Licensed OffshoreInsurance Entities, also for the purpose of reinsurance of domestic insurance business- Provided the External Account shall be funded by Ringgit from the sale of foreigncurrencies 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 outsideMalaysia.
2.3 Offshore Entities to buy, borrow, sell or lend foreign currency with an authoriseddealer, a Licensed Offshore Bank or any non-resident.
2.4 Licensed Offshore Banks to buy, borrow, sell or lend foreign currency andto 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 excludingchecking accounts, for any non-resident and resident;
2.4.2 Extend only foreign currency credit facilities of any amount to any non-residentand resident;
2.4.3 Undertake foreign exchange transactions, including forward and spot purchasesand 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 creditfacilities obtained by residents from Licensed Offshore Banks or funds in permittedforeign currency accounts; and
2.4.5.2 The payments to Malaysia are only for credit into the residentsŐ own foreigncurrency accounts with authorised dealers or payments to authorised dealers or licensedmerchant banks in relation to foreign currency credit facilities obtained from thelatter 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 thanas permitted in paragraph 2.1;
3.2 Licensed Offshore Banks to undertake any foreign exchange transaction, includingremittances(other than as permitted in paragraph 2.4.5), forward and spot purchasesand 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 RestrictedCurrencies.
4. Offshore Entities are not permitted to -
4.1 Accept deposits, including currency deposits, in Ringgit from any non- residentor resident;
4.2 Extend or raise any credit facilities in Ringgit on behalf of non-residentsor residents, other than the extension of Ringgit credit facilities to their staffpursuant 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 permittedin ECM6.