EPU Approval for Property Sale and Purchase: What Triggers It and How Long It Takes

EPU approval — now issued by the Ministry of Economy rather than the Economic Planning Unit under the Prime Minister's Department, though the old name has stuck — is required before a property sale and purchase can complete where the property is worth RM20 million or more and the deal would reduce Bumiputera or government-linked ownership, whether the acquisition happens directly or through a change of control in the company that owns the property. The Ministry aims to decide complete applications within 10 working days, but the approval condition has to be built into the sale and purchase agreement from the start, not discovered after a deposit is paid. This guide sets out what triggers the requirement, what conditions come attached, how long it actually takes, and what the application involves.

Most transactions get to heads of terms before anyone checks whether EPU approval applies. By the time it surfaces — usually when a lawyer reviews the draft SPA — a deposit is often already committed against a completion date that assumed none of this, and unwinding that timeline costs more than checking it would have.

What actually triggers EPU approval?

Under the Ministry of Economy's Guidelines on the Acquisition of Properties (effective 13 July 2022), approval is required in two situations:

• Direct acquisition — a non-Bumiputera or foreign party acquires property valued at RM20 million or more, and the acquisition reduces Bumiputera or government agency ownership of that property.

• Indirect acquisition — a share acquisition causes a change of control in a Bumiputera-owned or government-linked company where property makes up more than 50% of the company's assets, and that property is valued at more than RM20 million. The approval limb covers all property other than residential units, which the Guideline deals with separately.

Below that threshold, a foreign party generally does not need Ministry of Economy approval — but the Guideline itself still sets a floor. Foreign interests are not permitted to acquire property worth less than RM1,000,000 per unit, low-cost or medium-low-cost residential units, property on Malay Reserve Land, or units allocated to Bumiputera interests within a development project. Acquisitions by foreign interests of commercial units, industrial land and qualifying agricultural land at RM1,000,000 and above, and of residential units at RM1,000,000 and above per unit, sit outside the Ministry of Economy's approval requirement and fall instead to the relevant ministry, government department or the State Authority. Individual states may set higher thresholds of their own, so the state position has to be checked separately.

How is this different from State Authority consent under the National Land Code?

EPU approval and State Authority consent are two separate conditions that can both apply to the same transaction — clearing one does not clear the other. Sections 433B and 433E of the National Land Code 1965 (Act 828) require a non-citizen or foreign company to obtain State Authority approval before acquiring land or an interest in land at all, regardless of value — section 433B governs acquisitions, and section 433E extends the approval requirement, together with a levy, to other conveyances and disposals. A disposal or dealing in favour of a non-citizen or foreign company in contravention of section 433B is null and void under section 433C. This sits alongside, not instead of, the Ministry of Economy's RM20 million threshold test.

Two adjacent questions usually come up at the same point in this process: see jmb vs mc in malaysia and foreign ownership of malaysian property for how each is handled.

A transaction involving foreign ownership of Malaysian land above the value threshold routinely needs both. Structuring the agreement around only one is the most common mistake we see.

What conditions come attached to an approval?

Where EPU approval is granted, the Guidelines attach equity and capital conditions to the acquiring company:

• At least 30% Bumiputera equity interest in the acquiring company. The Guideline applies this condition to both limbs — direct and indirect — so a share deal does not escape it.

• Minimum paid-up capital of RM100,000 for a locally-owned company, or RM250,000 where the company has foreign ownership.

• For a direct acquisition, the equity and capital conditions generally have to be satisfied before the property transfer completes. For an indirect acquisition (a share deal), the Guidelines allow up to one year from the date the written approval is issued to comply. Compliance with the equity and paid-up capital conditions then has to be reported to the Ministry.

The Guidelines set out a further list of exempted categories — among them certain Malaysia My Second Home-linked purchases, premises within MSC-status developments, employee housing on stated conditions, and acquisitions by federal and state ministries and departments, Menteri Kewangan Diperbadankan, Menteri Besar or Ketua Menteri Diperbadankan, State Secretary Incorporated, and listed government-linked companies. Where a transaction falls within that list, the Guideline does not apply to it at all. The exemption list is specific and worth checking against your transaction rather than assumed.

How long does approval take, and can completion happen before it comes through?

The Ministry's stated target is a decision within 10 working days of a complete application — the operative word being complete. Applications returned for missing documents restart the clock, and a transaction with an unusual ownership structure or a disputed valuation will typically take longer than the target suggests.

Completing before approval is granted defeats the purpose of the condition and is not something the sale and purchase agreement should permit. The standard structure makes EPU approval — and State Authority consent, where it also applies — a condition precedent to completion, with a sunset date and an agreed allocation of the deposit if approval is refused or not obtained in time.

What does the application actually involve?

An application is made to the Ministry of Economy's Equity Development Division (Bahagian Pembangunan Ekuiti) at Menara Prisma, Putrajaya, on Form UPE H/2009 together with Proforma I/2009 and/or Proforma II/2009, and is supported by:

• A copy of the relevant agreement

• A copy of the board of directors' resolution

• A confirmation letter from the company secretary on the company's current equity structure

• A copy of the company's latest audited financial statements

• A copy of the latest property valuation report — where a government agency is involved in the transaction, the valuation must be by the Valuation and Property Services Department (JPPH)

• The signed declaration on Form UPE SA/2009, executed by the chairman, managing director, chief executive officer, a director, or an authorised officer, plus copies of any related licence or approval letters from other ministries or government agencies where relevant

Because the equity and paid-up capital conditions have to be met around completion, the corporate structuring — who holds the Bumiputera equity, and whether the acquiring vehicle meets the capital threshold — needs to be settled before the application goes in, not treated as paperwork to sort out afterward.

What happens if the deal proceeds without it?

Where State Authority consent under section 433B was required and was not obtained, the dealing is void under section 433C — not voidable, void. That is a materially worse outcome than a delayed completion. Where EPU approval was required and skipped, the more common consequence in practice is that the transfer simply cannot be registered or completed at all, because the party effecting the transaction has not satisfied the Ministry's conditions — which leaves the buyer holding a signed agreement and a deposit paid against a transaction that cannot close on the terms agreed.

Either way, the commercial cost is the same shape: a renegotiation from a weakened position, months of delay, or a dispute over the deposit — all avoidable by identifying the requirement before terms are agreed.

Frequently Asked Questions

Does EPU approval apply to every property purchase above RM20 million?

No. The RM20 million threshold only triggers the requirement where the acquisition also reduces Bumiputera or government-linked ownership of the property, directly or through a change of control. A RM20 million deal between two non-Bumiputera-linked parties is assessed differently. Residential units also sit outside this approval limb — they fall under the State Authority instead. Confirm the position for your specific transaction rather than assuming from the value alone.

Do we need both EPU approval and State Authority consent?

Where the buyer is a foreign company or non-citizen and the RM20 million dilution threshold is also met, both conditions typically apply, and they run in parallel rather than one replacing the other.

Can the sale and purchase agreement be signed before approval is obtained?

Yes — signing is normal. It is completion that should be made conditional on approval, with the agreement structured so the deposit and each party's position are clear if approval is refused, delayed, or comes with conditions neither party expected.

What if approval comes with conditions we did not expect?

The Ministry can attach conditions to an approval beyond the standard equity and capital requirements. The agreement should say what happens if that occurs — whether either party can walk away, and on what terms — rather than leaving it to be negotiated after the fact. An appeal is made on Form UPE R/2009 and is considered on the merits of the case, so an unexpected condition is not necessarily final — but no agreement should be drafted on the assumption that an appeal will succeed.

Is the 10-working-day timeline reliable?

It is the Ministry's stated target for a complete application, not a guarantee. Build a realistic buffer into the completion timeline, particularly where the ownership structure or valuation is not straightforward.

Getting this structured properly

An EPU approval condition that is identified late, drafted loosely, or left to be sorted out after the deposit is paid puts the buyer's money at risk for no commercial reason. Legal That Works advises on property transactions requiring Economic Planning Unit approval — from establishing whether your transaction needs it, through structuring the sale and purchase agreement around the condition, to preparing and submitting the application and dealing with whatever conditions come back. If a transaction on your desk now is anywhere near the RM20 million threshold, get the position confirmed before terms are agreed rather than after.

This article is for general information only and does not constitute legal advice. Every transaction and every set of facts is different. Obtain specific advice from a qualified adviser before acting on any part of it.

Related guides

• JMB vs MC in Malaysia

• Foreign Ownership of Malaysian Property

• Commercial Property Sale and Purchase Agreement in Malaysia

• Commercial Lease in Malaysia

• Development Rights Agreement vs Joint Development Agreement

• Right-of-Use and Wayleave Agreements in Malaysia