Recommendation 1 Recommendation 2 Recommendation 3 Recommendation 4

Recommendation 5 Recommendation 6 Recommendation 7 Recommendation 8

Market selection

Recommendation 7

Investor compliance with the laws and regulations in the home countries of their investments should be part of their regulators' due diligence process. They, in turn, should be treated equitably in the home country of their investments especially in respect to their rights to shareholder benefits and concessionary arrangements under double tax agreements.

1.	Do domestic regulators monitor the procedures in place at their locally based cross-border custodians to assure compliance with the laws and regulations of the home countries of their investments?	MCD does not monitor and regulate compliance to the laws and regulations of the home countries of locally based cross-border custodians’ investments. MCD only monitors and regulates compliance to local legal provisions and it is applied equally to all its agents and members.
2.	What are the areas (e.g. benefits, investor compensation) where foreign investors are not treated in the same way as local investors?	Foreign ownership in domestic companies are generally restricted to a maximum of 30% equity interest as stipulated in the Foreign Investment Committee (FIC) Guidelines expect for selected sectors where the ownership has been liberalised to encourage inflow of long term capital. Some listed companies have foreign shareholding limits and issue a separate tranche of shares for foreign shareholders. In the event this foreign tranche is fully taken up and a foreign shareholder holds shares from the domestic tranche, listed companies will allow such shareholders to be entitled to all rights in relation to their shareholdings except, generally voting rights.
3.	Can sales proceeds and income be repatriated without any restrictions?	Yes.
4.	Are double tax agreements simple to apply, and do foreign investors receive promptly their full entitlement to dividends and interest payments?	Yes. Dividends are not subject to withholding tax. Interest paid to non-residents from many instruments, including securities issued by the government, bonds (other than convertible loan stock) listed on KLSE, placements with banks and financial institutions and bonds rated by Rating Agency Malaysia and Malaysian Rating Agency Corporation, the two licensed rating agencies in Malaysia, are exempt from withholding tax. Withholding tax of 15% is deducted for all other interest income paid to non-residents.