Repatriating Malaysia Property Sale Proceeds: Currency and Documents

After selling a property in Malaysia, a non-resident seller can generally remit the divestment proceeds overseas. Bank Negara Malaysia’s (BNM) foreign exchange policy states that non-resident investors may repatriate divestment proceeds and investment income, and that this must be done in foreign currency.

In practice, the seller first needs to confirm when the sale proceeds actually become available, which documents the bank will accept, and what tax or transaction costs still need to be settled. The amount that can actually be remitted is not necessarily the same as the total price stated in the sale and purchase agreement (SPA).

Confirm Whether You Count as a Non-Resident Under the Currency Rules

“Non-resident” in this article refers to the classification used under BNM’s foreign exchange policy. It cannot be determined simply by counting tax residency days under income tax rules.

For example, a non-citizen who holds Malaysian permanent residence and habitually lives in the country is treated as a resident under BNM’s definition. Holding a foreign passport alone does not automatically make someone eligible for the non-resident divestment rules.

Before making arrangements, ask the bank to confirm whether the residency status registered on the account matches your current situation.

What Currency Should the Sale Proceeds Be Remitted In?

BNM requires that a non-resident’s divestment proceeds be remitted in foreign currency. If the funds are received in ringgit, they will usually need to be converted into a foreign currency the bank supports before being sent abroad.

This does not mean the funds must be converted into US dollars specifically. When choosing a currency, compare which currencies the receiving account accepts, the bank’s exchange rate, and the remittance fees involved, to avoid the funds being converted a second time after they arrive.

The Amount That Can Be Remitted Depends on What Is Actually Available After Completion

The sale price, the amount credited to the account, and the net funds that are freely available can be three different figures. At completion, there may still be an outstanding mortgage to settle, transaction costs, a tax withholding, or other amounts required under the contract.

For this reason, ask the conveyancing lawyer for a completion statement first, then confirm the remittance arrangement with the bank. Do not assume that the full sale price is already available for remittance simply because the SPA has been signed.

The Documents Should Be Able to Trace the Transaction and the Flow of Funds

The bank needs to verify the purpose of the remittance and the source of funds. The following can serve as a preparation checklist for remitting sale proceeds, though whether all of it is required is still decided case by case by the handling bank.

It is best to give the bank the expected remittance amount and the documents above before completion, for pre-approval, rather than finding out after receiving the funds that more documents are needed.

RPGT Filing and the Remittance Can Be Prepared in Parallel, but They Are Not the Same Process

For disposals from January 1, 2025 onward, RPGT (Real Property Gains Tax) follows a self-assessment system. The general deadlines to keep in mind are:

Filing is done through the e-CKHT system on MyTax; the seller can also appoint a qualified lawyer or a licensed tax agent to submit it. “Self-assessment” does not mean the seller has to personally handle every step.

The disposal and acquisition dates referred to above are statutory dates that should be confirmed with the handling professional. They should not simply be replaced with the date the sale proceeds are credited to the account.

The Amount the Buyer Withholds Is Not the Final Tax Bill

The Section 21B withholding payment is an amount the buyer withholds under the applicable rules and pays to LHDN (the Inland Revenue Board) on the seller’s behalf; it can be credited against the seller’s RPGT liability.

If the amount withheld is insufficient, the seller still has to pay the shortfall; if it is more than required, the excess is handled through a refund process. This withholding should not be treated as the final tax settlement, and it should not be counted as funds immediately available to remit before any refund has actually been received.

Whether a bank requires a specific tax certificate, or whether the already-available net proceeds can be remitted first, should be confirmed directly with the handling bank. A bank’s case-by-case requirement should not be mistaken for a nationwide LHDN remittance approval procedure.

How Long Should the Records Be Kept?

LHDN’s filing guidance requires that supporting documents generally be kept for seven years from the end of the assessment year in which the tax was assessed; late filing and similar situations should be checked separately for how that period is counted.

In practice, it is worth keeping the following from the time the property was purchased:

• The purchase and sale SPAs
• Purchase remittance, loan and loan redemption records
• Stamp duty, legal fees and other transaction cost receipts
• Contracts, invoices and payment records for any renovation or improvement work
• CKHT filing, tax calculation, payment and refund records
• Records of the sale proceeds being credited, converted and remitted overseas

Do not discard old purchase documents just because more than seven years have passed since the purchase; they may still be needed to demonstrate the acquisition cost and source of funds when the property is eventually sold.

Keeping renovation or improvement receipts also does not automatically mean that spending is tax-deductible; whether a bank asks for them and whether they are deductible for tax purposes are separate questions.

Frequently Asked Questions

Can a non-resident remit the entire sale proceeds?

In principle, yes, following the non-resident divestment rules, a non-resident can remit in foreign currency the sale proceeds that are legally available. But an outstanding mortgage, transaction costs, withheld amounts and tax due all need to be factored into the arrangement; the total sale price should not be treated directly as the net remittable amount.

Do I have to wait for the RPGT refund before remitting other funds?

The official sources checked for this article do not state a uniform requirement to this effect. Whether other funds are already available, and what proof the bank needs, should be confirmed separately with the lawyer and the bank.

Does every bank require renovation receipts?

This is not a uniform requirement that this article can confirm. Renovation receipts mainly help verify related spending; whether a bank needs them depends on its own review requirements.

Scope of This Article

This article explains the general remittance and documentation process for non-resident sale proceeds. It does not cover every transaction, tax exemption or receiving-country rule. Individual cases should be confirmed with the bank, the handling lawyer and a tax agent.

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