Real Estate Trusts in Malaysia - Listed Property Trusts - M-REIT

Malaysia REIT benefits

Don't envy my great retirement -- Join the fun!

Click to discover my secret to ever-growing income from investments for life -- whether the stock market goes up or down

Malaysia was the first country in Asia to adopt rules creating Real Estate Investment Trusts in Malaysia. That happened in 1986 when Bank Negara Malaysia (Central Bank of Malaysia) approved a regulatory framework based on the Companies Act 1965 and the Securities Industry Act 1983. They are also referred to as listed property trusts (actually, private unlisted trusts are also allowed), and they're formed as Malaysian registered trusts.

The first Malaysian REIT, Arab Malaysian First Property Trust, launched September 1989.

The guidelines for listed property trusts were issued by the Securities Commission in 1991, and revised in 1995.

In 1999 the Securities Commission examined Real Estate Investment Trusts in other countries such as the United States, and issued two papers: Consultation Paper on Property Trust Fund (1999) and Consultation Paper on Property Trust Funds and Real Estate Investment Trusts (2002). Then came the Finance Act 2004. On January 3, 2005 the Securities Commission issued Guidelines on Real Estate Investment Trusts.

On November 22, 2005 the Securities Commission issued Guidelines on Islamic Real Estate Investment Trusts (Islamic REITs). This makes Malaysia a leader in the growing trend in the Middle East and Asia of shariah-compliant or syariah-compliant REITs.

Real Esate Investment Trusts in Malaysia Legal Requirements

REITs in Malaysia must pay out at least 90% of their income to shareholders to avoid taxation.

M-REITs are exempt from paying stamp duty when they sell property. And property owners who sell to listed property trusts are exempt from capital gains taxes.

Dividends to nonresidents must have 20% withheld for their taxes effective 2012..

M-REITs in Malaysia must be managed and administered by a management company aproved by the Securities Commission. The Securities Commission must also approve its choice of trustee.

The management company is limited to owning no more than 70% of the equity, together with that owned by foreign investors (foreign effective equity). Local investors (Bumiputra) must own at least 30% of the fund.

The minimum fund size is RM100 million. The property it owns must be run by a qualified property manager.

At least 50% of the trust's total assets must be invested in real estate. It can invest up to 25% of assets into cash and money market funds.

The fund cannot invest more than 5% of assets into the securities of any one issuer. And it must not invest more than 10% into the securities of any group of companies.

Various REITs were listed in the 1990s, but by 2005 only three were still on the stock exchange. But since the new rules announced by the Securities Exchange, more have been launched.

Real Estate Investment Trusts in Malaysia (M-REITs):

So Real Estate Investment Trusts in Malaysia are gaining ground, and should continue to prosper. They are used as a model in other Islamic countries.

Now download The Death of Capital Gains Investing, your first step toward experiencing for yourself the joy of securing your retirement through income investing!

It's easy. Just enter your first name and email address into the form below.

(NOTE: After you click the button, you'll be taken to a thank you page with the link to download your free report.)

Copyright 2007-2017 by Gold Egg Investing LLC. All rights reserved.

Income Investing Site Full Disclaimer and Website Agreement