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China’s real estate market has experienced a continual downward trend since 2022, with investment and sales significantly decreased. The land premium rate is at the lowest level in a decade, while the combined passed-in and withdrawal rate of auctioned and listed land parcels remains persistently high.

According to data released by the National Bureau of Statistics, last year the area of land purchased by real estate developers decreased by 53.4% compared to 2021. The value of land transactions declined by 48.4%, the newly started area of housing fell by 39.4%, the sales area of commodity housing contracted by 24.3%, and development investment shrank by 10%.

To prevent systemic risk against this negative industry backdrop, the central government at various levels has implemented a series of laws, regulations and policies to stabilise the real estate market while adhering to the principle of “housing is for living in, not for speculation”.

These measures have been tailored to different cities and cover various aspects such as development, construction, investment, financing and sales, with the aim of supporting both rigid and upgraded housing demands and promoting stability of the real estate industry.


Hao Han
Hao Han
Zhong Lun Law Firm
Tel: +86 10 5957 2010

At the forefront of land supply and development, a succession of implemented policies targets market orientation “guaranteeing housing delivery, people’s livelihoods and social stability”. These policies prioritise marketisation and the rule of law to address risks faced by real estate developers, ensuring smooth completion and delivery of projects.

The Circular on Regulating People’s Courts’ Preservation and Enforcement Measures to Ensure Use of Commodity Housing Pre-sale Funds for Project Construction – jointly issued in January 2022 by the Supreme People’s Court, the Ministry of Housing and Urban-Rural Development and the People’s Bank of China – requires that good faith and civilised enforcement should be strengthened with the principle of proportionality upheld when implementing preservation and enforcement measures on escrow accounts for pre-sale funds.

The objective is to prevent delays in payment of interim construction costs to construction companies, which could hinder the progress of commodity housing projects and negatively impact their completion and delivery, compromising the rights and interests of homebuyers.

Subsequently, the China Banking and Insurance Regulatory Commission released the Circular on Work Relating to Replacement of Escrowed Pre-sale Funds with Letters of Guarantee Issued by Commercial Banks. The circular allows the use of letters of guarantee as a replacement for escrowed pre-sale funds, enabling reputable real estate developers to utilise those funds effectively.

Additionally, several regions in China – including Shanghai, Guangdong, Sichuan, Wuhan and Nanjing – have introduced supporting policies. These include: accepting demand guarantees as a valid form of performance guarantee for participation in land auctions; adjusting quotas for escrowed pre-sale funds based on developers’ credit records; and allowing developers to withdraw and use funds more than the prescribed escrow amounts to improve liquidity.

Shi Yi
Shi Yi
Zhong Lun Law Firm
Tel: +86 10 5957 2169

On the other hand, relaxing restrictions feature highly in various policies to boost sluggish housing sales. These focus on meeting reasonable housing demands while reducing the costs and risks of home buying.

In 2022, the People’s Bank and the China Banking and Insurance Regulatory Commission jointly issued the Circular on Establishing a Long-term Mechanism for Dynamic Adjustment to Interest Rate Policy for New Individual Housing Loans for First Homes, which outlines a phased reduction of interest rate floors for commercial individual housing loans for first homes in eligible cities.

Also in the same year, the Ministry of Finance and the State Taxation Administration released the Announcement on Individual Income Tax Policy for Supporting Residents’ Purchase of New Houses Following Sale of Existing Houses, which entitles a taxpayer who purchases a new house in the market within one year of selling his or her existing house to a refund of all or part of the individual income tax paid on the existing one. The refund is determined based on the difference between the purchase price of the new house and the sale price of the existing house.

In 2023, the Ministry of Natural Resources and the China Banking and Insurance Regulatory Commission jointly issued the Circular on Making Concerted Efforts to Provide Real Estate “Transfer with Mortgage” Services for the Convenience of People and Businesses. This circular emphasises the need for interdepartmental collaboration to provide premium services for real estate transfers with mortgages.

The Supreme People’s Court’s updated guidance, the Reply on the Protection of Rights of Commodity Housing Buyers, further reinforces the rights of homebuyers. It specifies that if a buyer purchases a commodity housing unit for residential purposes and has fully paid the home price, a buyer’s claim for the property delivery takes priority over any preferential claims for construction costs, mortgage rights or other claims.

Additionally, local authorities have implemented various measures including: allowing transactions of pre-owned homes under mortgages; relaxing or even lifting restrictions on home purchases; lowering caps on real estate agent commissions; and piloting a “housing coupons” policy, which is a supplement to monetary compensation for existing residential housing subject to demolition or resettlement.


As for investment and financing, the focus is on resolving debt risks in the real estate sector and facilitating a smooth transition to a new development model. In 2022, the People’s Bank of China and the China Banking and Insurance Regulatory Commission jointly issued the Circular on Ensuring Financial Support for the Stable and Sound Development of the Real Estate Market.

This emphasises the need to provide proactive financial services to support the guarantee of housing delivery and co-operate in addressing risks faced by distressed developers, tweaking financial management policies in a phased manner, and stepping up the financial support for housing leasing.

Several departments, including the Development and Reform Commission, the China Securities Regulatory Commission and Asset Management Association of China, have also issued documents to guide participation of private capital in urban development, construction and operation.

They promote pilot programmes for real estate investment trusts (REITs) in the infrastructure sector and expand the scope of underlying assets of REITs to include affordable rental housing and commercial properties. These measures aim to create opportunities for investment exit.

Local policies have also been implemented in provinces such as Henan and Anhui to support reputable developers in issuing bonds for financing, as well as facilitating M&A of distressed projects. These policies also emphasise the importance of urging commercial banks to strengthen financing support for the real estate market and effectively utilise real estate relief funds.

According to the Guiding Opinions on Actively and Steadily Promoting the Redevelopment of Urban Villages in Megacities and Supercities adopted by the State Council in July 2023, active and steady promotion of urban village redevelopment in megacities and supercities is crucial to improving people’s livelihoods, expanding domestic demand, and enhancing high-quality urban development. This sends a clear signal for stimulating domestic demand as well as consumption potential.

Additionally, during a subsequent meeting of the Political Bureau of the Central Committee of the Communist Party of China (Politburo), it was indicated for the first time that real estate policies should be optimised and the policy toolkit should be fully utilised according to the specifics of different cities, to accommodate the new situation in China’s real estate market where supply and demand has changed significantly. The purpose of this is to better meet residents’ rigid housing demand and desire for better housing, boosting steady and healthy growth of the real estate market.

The Politburo meeting also required that efforts should be made to build and provide more affordable housing; vigorously promote the redevelopment of urban villages and construction of public infrastructure for ordinary and emergency uses; and revitalise and renovate various types of idle properties.

It is expected that the central government and local authorities at various levels will roll out more real estate policies with a higher level of market support and a greater variety of support tools.


Based on data released by the National Bureau of Statistics for January to June 2023, the implementation of these various policies to stabilise the real estate market has led to a moderation in the overall downward trend.

That being said, the real estate market in general is still in a low phase, and market confidence has not yet fully recovered.

In the short term, the central task remains the prevention and resolution of debt risks in the real estate sector. This has created hotspots and opportunities in the legal services market, including debt restructuring, bankruptcy reorganisation, dispute resolution, and opportunistic investment for real estate companies.

In the meantime, as the characteristics of the real estate industry continue to evolve towards “inventory-based development, industrialisation, and financialisation”, the real estate market will undergo a transformation and upgrading process despite the challenges. This transition may involve some growing pains but is essential for the industry’s long-term development.

Zhong Lun Law Firm


22-31/F, South Tower of CP Center
20 Jin He East Avenue, Chaoyang District
Beijing100020, China

Tel: +86 10 5957 2288




India allows automatic foreign direct investment (FDI) of up to 100% in the construction development sector, which includes projects such as townships, residential/commercial premises and hospitals, accounting for a significant 9% of recent total FDI in the second quarter of 2023.

This article analyses the current regulatory framework for this vibrant sector, including FDI, real estate investment trusts (REITs), insolvency and structured financing.


With 100% FDI allowed, investors can exit on completion of the project or after development of trunk infrastructure, namely roads, water supply, street lighting, drainage and sewerage.

Hardeep Sachdeva,AZB & Partners
Hardeep Sachdeva
Senior Partner
AZB & Partners
Tel: +91 12 0417 9999

Each phase is considered a separate project. This means investors can exit and repatriate their foreign investment before completion of the entire project, subject to a lock-in period of three years, calculated with reference to each tranche of the FDI. But these exit restrictions are not applicable to investments in hotels, tourist resorts, hospitals and educational institutions.

Transfer of a stake by one non-resident Indian to another without a repatriation of the investment is also allowed, without lock-in period or government approval.

But it is pertinent to note that FDI is not permitted in an Indian company engaged in construction of farmhouses, trading in transferable development rights or real estate business, defined as dealing in land and immovable property to earn profit.

Although the so-called real estate business does not include development of townships, residential or commercial premises, roads or bridges, REITs, educational institutions, recreational facilities, city and regional level infrastructure, and earnings from rent or income on lease of a property not amounting to a transfer.

Foreign companies with a branch office or other place of business in India wishing to acquire immovable property for carrying on business operations are governed by the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019.

This requires them to file certain declarations with the Reserve Bank of India (RBI). Payment for this with funds received in India may be made through normal banking channels by inward remittance from anywhere outside India, or debit to an NRE/FCNR (B)/NRO account.


Ravi Bhasin, AZB & Partners
Ravi Bhasin
Senior Partner
AZB & Partners
Tel: +91 12 0417 9999

Another recent development for the real estate sector is adoption of the REIT model by both retail and institutional investors. There are presently five registered REITs, including three together owning 11% of grade A office space, a sector projected to soar by up to 68% in coming years.

REITs are principally governed by the Securities and Exchange Board of India (SEBI) REIT Regulations because they are constituted as a trust under the Indian Trusts Act 1982, generally comprising a designated sponsor, manager, trustee and unit holders.

The REIT regulations prescribe that at least 80% of the value of REIT assets must be invested in completed and rent and/or income-generating properties. The remaining 20% must be invested in properties under construction or completed, but not rent-generating properties.

To safeguard investor interests – enabling them to make well-informed decisions for their REIT investments – the regulations prescribe certain periodic valuations, including full valuation of all REIT assets on an annual basis, through a registered valuer. On receipt, such valuation reports are required to be submitted to the designated stock exchange and unit holders within 15 days.


The Insolvency and Bankruptcy Code, 2016 (IBC), codifies the existing framework of insolvency and bankruptcy laws, streamlining processes for insolvency and liquidation.

The IBC enables any financial creditor, operational creditor, or the corporate debtor to initiate an insolvency resolution process on the event of default by the corporate debtor. This must be resolved within 180 days from submission of the application for initiation of the insolvency resolution process.

Abhishek Awasthi, AZB & Partners
Abhishek Awasthi
Senior Partner
AZB & Partners
Tel: +91 12 0417 9999

The IBC has had a crucial impact on real estate insolvency for Indian real estate companies involving the interests of both homebuyers and real estate developers as stakeholders. Homebuyers are also afforded greater rights through recent amendments and decisions of the Supreme Court.

Previously their role was limited to being recognised as “other creditors”. But since amendments in 2018, homebuyers are now recognised as financial creditors, with the right to initiate the insolvency process against defaulting real estate companies. This right is subject to a minimum threshold on the required number of homebuyers to initiate the process.

Real estate developers are also afforded greater flexibility by the Insolvency and Bankruptcy Board of India in seeking and passing resolution plans of real estate companies. The Insolvency Resolution Process for Corporate Persons Regulations, updated in 2022, enable the committee of creditors to seek a fresh resolution plan in respect of one or more assets of the corporate debtor, where no resolution plan was received for the corporate debtor as a whole.

A resolution professional can also allocate a budget towards a marketing strategy directed at maximising the valuation of the corporate debtor’s assets. This amendment allows resolutions designed specifically for individual real estate projects of a corporate debtor, which can also vary based on factors including project size, development type, stage of completion and location.


Apart from the IBC, another prime avenue for lenders to recover their debts is governed by the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).

If a borrower fails to repay a secured debt, the secured creditor may classify the borrower’s account as a non-performing asset and initiate proceedings to enforce its security interest and take possession of the secured assets; a faster process for debt recovery compared to the civil court process.

A prior notice must be sent to the borrower to discharge the liability in full within the stipulated period, on the failure of which enforcement proceedings may commence under SARFAESI Act provisions.

While the SARFAESI Act controls and facilitates enforcement of financial agreements between real estate developers, homebuyers and banks, the Real Estate (Regulation and Development Act), 2016 (RERA), is the principal legislation balancing the interests of allottees and promoters in construction, development and marketing of real estate projects.

Under the RERA, certain liabilities are imposed on promoters and allottees of the real estate projects. Promoters are required to disclose pertinent information such as sanctioned plans and schedules for completion of the real estate project to allottees.

On the other hand, allottees are primarily liable for making payments in accordance with the sales agreement with the project promoter, along with any financing agreement with a secured creditor, and paying interest in the event of default.

In Union Bank of India v Rajasthan Real Estate Regulatory Authority and Ors, the Supreme Court upheld the decision of Rajasthan High Court, reiterating the principle that the RERA is a special legislation that prevails over provisions of the SARFAESI Act in the event of conflict.

Critically, it further held that RERA authorities had jurisdiction to entertain complaints from homebuyers against banks as secured creditors if the bank takes recourse to any provisions in section 13(4) of the SARFAESI Act.


Lenders from foreign jurisdictions are also subject to the Master Direction on External Commercial Borrowings, Trade Credits and Structured Obligations (ECB Framework), updated from time to time by the RBI. This framework provides for certain conditions that must be satisfied by borrowers and lenders in cases where the loan falls under the automatic or approval route.

Alternatively, another route that foreign lenders and investors use is through subscription to secured non-convertible debentures of Indian companies, listed or not, in accordance with the SEBI (Issue and Listing of Debt Securities) Regulations, 2008.

The security interest is created in favour of a debenture trustee responsible for holding the security on behalf of the non-resident Indian (NRI) and overseeing compliance by the borrower. The NRI subscriber must be registered with the SEBI as a foreign portfolio investor.

Pursuant to amendments in 2021, the RBI amended the Foreign Exchange Management (Debt Instrument) Regulations, 2019, to allow foreign portfolio investors (FPIs) to invest in debt securities issued by REITs and infrastructure investment trusts under the Medium-Term Framework or Voluntary Retention Route. The maximum unit holding of an FPI in a single REIT has, however, been capped at 10%.

AZB & Partners Logo


lot No A-8, Sector 4,
Noida 201301 (NCR)
National Capital Region, India
Tel: +91 12 0417 9999


The Civil Code is the fundamental legislation governing real estate in Japan, which separates the ownership of land and buildings. An owner has the right to use, obtain profit from and dispose of real property. The Act on Building Unit Ownership provides for unit ownership of buildings, such as apartments and condominiums that are structurally divided with multiple owners.

A trust is also commonly used to hold real property where a trustee becomes a legal owner and the substantial owner holds beneficial interests, mainly due to the tax benefit. It is possible for foreign entities to directly own land and buildings in Japan or hold trust-beneficial interests. However, foreign entities tend not to purchase real property on their own account, but establish a vehicle to do so due to tax issues, including corporate and withholding taxes.

Leasing rights are common and governed by the code and the act, which provide lease rights holders with legal protection to some extent. The Real Estate Registration Law provides procedures for registering the ownership of properties, including a real estate registration system under which ownership, rights in relation to property use, and security interests are recorded.


Hiroshi Niinomi
Hiroshi Niinomi
Nishimura & Asahi
Tel: +81 3 6250 6523

The Civil Code allows multiple entities or people to own a property together, which is called co-ownership (kyoyumochibun-ken). Co-owners can agree on how to use, manage and modify the property under a co-ownership agreement, with some restrictions.

The Act on Building Unit Ownership allows some parts of the property to be structurally divided, be used as a single property and be subject to unit ownership (kubunshoyu-ken) or other proprietary interest. Generally, rules stipulating the building management and common space are established in accordance with the act. It is essential to review the co-ownership agreement or other regulations if acquiring co-ownership or unit ownership.

It is also common to have a certain type of ownership called beneficial interests, mainly for tax reasons (including acquisition and registration taxes), which involves creating a trust agreement between a trustee and the property owner. The trustee holds the ownership of the property for the benefit of another person or entity.

The Civil Code also describes leasing rights (chinshaku-ken) and superficies (chijo-ken) in relation to property use. Leasing rights are the most common type and are governed also by the Act on Land and Building Leases, which provides the lessee with legal protection. For instance, a standard leasing agreement cannot be terminated unless the lessor has justifiable grounds and gives at least six months’ notice of termination to the lessee.

Meanwhile, a fixed-term leasing agreement can be terminated without justifiable grounds (seitojiyu) on condition that the agreement satisfies certain formalities under the act. For example, before entering the agreement, the lessor shall deliver a written explanation about the specific term of the lease not to be renewed.

The act allows the leasing right to be perfected once, in respect of the building lease, the lessee obtains the possession of a building; or in respect of a land lease, the ownership of the building is registered. It is also possible to register leasing rights although it is uncommon due to the registration fee.

Creating mortgages, including “revolving mortgages”, over ownership and superficies of real estate is possible, and it is a normal practice. When a mortgage is created, it does not necessarily mean transferring possession. Parties can create mortgages by a simple agreement and registration. It should be emphasised that parties who take out a mortgage should ensure that they have disposal authority.

A mortgagee shall have the right to receive the performance of his or her claim before other obligees. If there are multiple mortgages on the same property, the priority shall follow the chronological order of their registrations. Mortgages principally cover an integral part of the subject property, except for buildings on the mortgaged land.

Mortgage enforcement can be conducted through a secured real property auction, which means exercising the security interest through an auction, or an execution against earnings from the secured real property, which means exercising security interest by allotting the earnings from the real property to the performance of the secured claim.

Exercise of a real property security interest under the Civil Execution Law shall commence only when all the designated documents have been submitted.


Koki Hara
Koki Hara
Nishimura & Asahi
Tel: +81 3 6250 6460

Although it is possible for foreign entities to directly own land and buildings in Japan, it is more common for them to do so through a Japanese juridical entity such as a kabushiki-kaisha (KK) or a godo-kaisha (GK) incorporated under the Companies Act. KK is often translated as stock company, while GK is normally interpreted as a Japanese limited liability company.

In the real-estate financial market, it is common to use a GK with the tokumei-kumiai (TK) agreement, which is incorporated under the Commercial Code, or a tokutei-mokuteki-kaisha (TMK), which is incorporated under the Act on the Securitisation of Assets to avoid double taxation.

There are some factors to determine which structure is appropriate, including regulations (different regulations apply to the scheme depending on the type of special-purpose company and the type of company assets), necessity of a clear tax opinion, and management cost (the cost using the TMK structure would be higher). TK agreement allows for the avoidance of double taxation, but it is not clearly prescribed in Japanese law and a legal opinion with respect to that point is difficult to provide.

A GK is more flexible and simpler in terms of governance, as it can be established solely with one entity as a member, appointing one individual as a managing officer (shokumu-shikkousha). A ippan shadan hojin (ISH) or general corporation is commonly used to achieve governance neutrality and bankruptcy remoteness as the officers cannot be changed or be appointed by the shareholders once they are appointed under the articles of association, making the company free from the shareholder’s intervention.

Unlike the GK-TK structure, the requirements for special tax treatment of a TMK are clearly prescribed by the tax laws. Therefore, by fulfilling those requirements, an investor can avoid double taxation. A TMK can issue two types of equity, including specified shares that are similar to ordinary shares in a KK and preferred shares.

The voting rights of a preferred shareholder are limited. The Act on the Securitisation of Assets requires TMK to have one director and a statutory auditor from a governance viewpoint, and the preparation of a specific asset liquidation plan, which must be submitted to the authority, and to report if there is any change to the plan.


Naoto Yamamoto
Naoto Yamamoto
Nishimura & Asahi
Tel: +81 3 6250 6632

Any transfer or creation of real property ownership must not be asserted against third parties unless they are registered in accordance with the Real Estate Registration Act. Once an application for registration regarding a new transaction is submitted, the certificate of registered property cannot be issued until the application process is completed. Therefore, it is common to review the registration of the target property before the transaction.

The application should be submitted after confirming that the registration does not indicate any inconsistency. There could be a minor risk that a court might find that a third party, who is not on the registration, is the true legal owner or holds a proprietary interest. Although such a risk is low due to the stringent requirements, legal due diligence is basically regarded as a sufficient method to mitigate the risk. Therefore, title insurance is uncommon in Japan.

Legal counsel normally would not conduct on-site due diligence, so the issues requiring physical due diligence would not be covered, including matters related to regional regulations, architecture or construction, environment, city planning or zone use, and actual boundary. Appraisal, engineering, and property reports would be provided to cover the above-mentioned matters.

In practice, legal counsel generally reviews important agreements, reports, and documents or certificates regarding the subject property to check whether there is any material issue that would prohibit the purchaser from acquiring the property.

The scope of due diligence includes rights to the target property (whether the seller is the owner, the perfection is completed, or any security interests exist), tenant and lease agreement, other related agreements regarding the property (including property management agreement), regulations applying to the property, environmental issues, boundaries, lawsuits, etc.

Although the scope may differ depending on the cost and characteristics of the target property, it is essential to review the certificate of registered matters. Where any issue is found in the reports, legal counsel investigates in detail from a legal perspective.

Due diligence would generally proceed with the following steps, and it would take one to two months before the final report is provided. It is necessary to determine the scope of the legal due diligence. The information package regarding the target property would be provided to the potential buyer subject to the non-disclosure agreement or letter of intent. In some cases, a question and answer session would be scheduled between the seller and the potential buyer. The potential buyer would decide whether to proceed with the transaction based on the outcome of the legal due diligence.

Nishimura & Asahi Logo


Otemon Tower, 1-1-2 Otemachi, Chiyoda-ku
Tokyo 100-8124, Japan
Tel: +81 3 6250 6200




Malaysia has just introduced its New Industrial Master Plan (NIMP 2030) aiming to drive the nation’s trajectory as a leader in industrial development, extend domestic linkages to creating wealth and strengthen its global value chain.

Launched on 1 September 2023, the NIMP 2030 identifies 21 sectors the government intends to promote, adopting a mission-oriented approach.

Among those promoted sectors are aerospace, electrical and electronics, digital and information communications technology (ICT), food processing, medical devices, pharmaceutical and automotive, along with manufacturing, global and professional services, and rubber and palm oil-based products.


Among many advantages, Malaysia is a globally connected economy with a strategic location in Southeast Asia, complemented by extensive regional partnerships and global trade links.

Lim Yoke Wah, Halim Hong & Quek 律师事务所
Lim Yoke Wah
Halim Hong & Quek
Kuala Lumpur
Tel: +603 2710 3818

The gateway to Asean has no less than 14 free- trade agreements (FTAs) currently in place, both regional and bilateral. Malaysia is also a signatory of the world’s newest and largest trading bloc, the Regional Comprehensive Economic Partnership (RCEP), incorporating 10 Asean member countries and five regional FTA partners.

Malaysia has also established a reputation as a business-friendly international destination, with more than 5,000 foreign companies from 50-plus countries currently operating. They are encouraged by economic and regulatory frameworks with actively engaging supportive policies that ensure rapid, competitive business establishment.

Leveraging this robust financial infrastructure, facilitative business ecosystem and favourable pro-business policies, Malaysia has become a regional and global hub for prominent multinational corporations. These include global manufacturing giants like Huawei, Nestle, Intel, Sharp, Braun, IKEA, Volkswagen and BMW.

Malaysia is home to five economic corridors with favourable infrastructure and investment provisions that promote free trade and provide key business incentives: Iskandar Malaysia; the East Coast Economic Region; the Northern Corridor Economic Region; the Sabah Development Corridor; and the Sarawak Corridor of Renewable Energy.


Malaysia is also committed to continually developing and upgrading its infrastructure, with more than 500 dedicated industrial parks, specialised industrial parks and free industrial zones. These are complemented by expanding telecoms technologies, a growing highway network, efficient seaports and well-recognised international airports.

Port Klang and the Port of Tanjung Pelepas (PTP) are ranked among the world’s top 20 container ports by the World Shipping Council, with Port Klang ranked 12th, and PTP also a regional trans-shipment hub.

With six international airports, another 16 domestic and 18 airport aerodromes accommodate growing passenger demand and facilitate major trade and aviation routes.


Zach Shaw Ke-Wei, Halim Hong & Quek 律师事务所
Zach Shaw Ke-Wei
Business Development Director
Halim Hong & Quek
Kuala Lumpur
Tel: +603 2710 3818

Malaysia significantly invests in education, ranking top among Asean countries in total public expenditure on education by GDP percentage. Government efforts in developing industry-ready talent are reflected in the country’s improving ranking to 45th among 133 countries in the Global Talent Competitiveness Index 2022, compiled by INSEAD University, Google and Adecco.

Industrial training for the private sector is also nurtured by the Human Resource Development Fund (HRDF). Companies in the manufacturing and service industries contributing to this fund are eligible for grants bearing the costs of training their labour forces.

The National Vocational Training Council, under the Ministry of Human Resources, further co-ordinates the planning and development of a comprehensive system of vocational and industrial training programmes for all training providers.

It also continually develops the National Occupational Skills Standards (NOSS), to date covering more than 800 certificate, diploma and advanced diploma qualifications.


The Torrens System is adopted to record ownership and dealings of industrial and manufacturing real estate. Registration of title is guaranteed to the proprietor whose name is registered on the document. Where any alienated land is subject by national law to the category “industry”, the land shall be used only for industrial purposes.

Namely, this specifies erection or maintenance of factories, workshops, foundries, warehouses, docks, jetties, railways or other buildings or installations for use, or in connection with, one or more of the following: manufacturing, smelting, power production or distribution, assembling, processing, storage, transport or distribution of goods or commodities, or other purposes prescribed by the state authority.

Owners planning to develop land should ensure the use does not violate the categories, express conditions, implied conditions and restrictions in interest imposed by the state authority.

The Town and Country Planning Act 1976, meanwhile, controls and regulates town and country planning. No development is permitted without planning permission.

The Environmental Quality Act 1974 prevents, abates and controls pollution, as well as protecting the environment against potential waste or pollutants from industrial and non-industrial activity.

The Industrial Co-ordination Act, 1975, co-ordinates orderly development of manufacturing and licensing manufacturing activity.


When seeking to acquire real estate, foreign investors are advised to consider the following:

Minimum threshold is required by the state where the land is located. Prior to fulfilling other requirements, always check the minimum threshold of the relevant state.

The threshold also means a minimum property purchase price is fixed by the respective state. The foreigner threshold varies from state to state and is revised from time to time according to circumstances that a state authority deems fit.

For instance, the minimum threshold for a foreigner to acquire land in Kuala Lumpur is currently MYR1 million (USD213,000).

State consent is also required, stipulated under section 433B of national law. Foreign purchasers are required to submit application forms and fees via their appointed lawyer.

The state authority will grant approval after examining all the documents, and may also impose a one-time levy as a condition for approval for non-Malaysian purchasers. Such a levy is currently imposed in the states of Penang, Melaka, Pahang and Johor, with rates varying from each state and also subject to revision from time to time.

Economic Planning Unit approval is also required for all property acquisitions where there is direct acquisition valued at MYR20 million and above diluting ownership of property held by Bumiputera (indigenous people) interests and/or government agency. This requirement also extends to indirect acquisitions of property by other than Bumiputera interests through acquisition of shares, resulting in a change of control of the company owned by Bumiputera interests and/or government agency having property more than 50% of its total assets, valued at more than MYR20 million.


National law defines “tenancy exempt from registration” as tenancy for a term not exceeding three years, while leases are for a term exceeding three years but limited to a maximum term of 99 years for the whole of the land, and a maximum of 30 years for part of the land.

There is no automatic security of occupation, but parties can negotiate and agree to an exercisable option for renewal of a lease or tenancy prior to expiry of its term.

A registered lease must be registered via the prescribed form. Foreigners wishing to lease property or land are required to apply for state consent.


Malaysia offers a multitude of advantages for investment in industrial parks, from its strategic location in Southeast Asia to its globally connected economy, with numerous trade agreements and a welcoming business environment.

A robust financial system, supportive policies and the presence of multinational giants underscore its status as a premier destination for industrial investment.

Malaysia’s dedication to progressive infrastructure and outstanding connectivity, coupled with its commitment to educational and industrial training, ensures that investors have access to a skilled workforce and top-notch logistical capabilities.

In this dynamic landscape, Malaysia stands as a beacon of opportunity, beckoning investors to become part of its ambitious industrial real estate journey.

By adhering to its laws and regulations, investors can secure their place in the country’s industrial transformation, contributing to its growth and prosperity while reaping the benefits of a truly “Truly Asia” experience.

Halim Hong & Quek


Office Suite 19-21-1, Level 21, Wisma UOA Centre
19 Jalan Pinang, 50450 Kuala Lumpur

Tel: +603 2710 3818


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