Liberalisation of Foreign Exchange Administration Policies

Bank Negara Malaysia (BNM) has recently issued a Supplementary Notice on Foreign Exchange Administration Rules to introduce new measure to provide greater hedging flexibility for residents to better manage their foreign exchange (FX) risk.
Under these new measures (which will take effect from 2 May 2019), a Resident Payee which is a Small and Medium Enterprise [refer item 1.(a)(i) of Appendix for definition] and a net importer [refer item 1.(a)(ii) of Appendix for definition] may receive 100% foreign currency payment from a Resident Payor (a resident entity with foreign currency export earnings) for settlement of domestic trade in goods and services.
To facilitate the above, and in compliance with BNM’s directive, following conditions need to be met:

a) the payment is made using
         i. the Resident Payor’s foreign currency funds in Trade Foreign Currency Account; or
        ii. proceeds from an approved foreign currency export trade financing facility,
    and shall not be sourced from conversion of Ringgit by Resident Payor;
b) the payment is made directly into the Resident Payee’s Trade Foreign Currency Account; and
c) the Resident Payor and Resident Payee have complied with the requirements in the Appendix.

Trade Foreign Currency Account shall be maintained by both Resident Payor and Resident Payee to allow the foreign currency payments. Should you wish to have a Trade Foreign Currency Account, kindly visit our branches. For the purpose of account opening, the following documents / forms are required:
  1. Account Opening Forms
  2. Board Resolution
  3. Corporate Internet Banking (CIB) Maintenance Form
  4. Payment in Foreign Currency Between Residents Declaration Form
  5. Other relevant supporting documents as may be required by the Bank
For more information on the new rules on Foreign Exchange Administration, please refer to the BNM website at

For further enquiries, please contact SME & Commercial Business at 03-2028 6263, 03-2028 5482 or 03-2055 2222
Yours faithfully,
Requirements to undertake payment in foreign currency between residents

1. A Resident Payee shall be present at the receiving bank and shall

(a) make a declaration that

(i) the Resident Payee is an SME as defined in the “Guideline for New SME Definition” issued by SME Corporation Malaysia in October 2013 (as amended from time to time);
(ii) the Resident Payee does not have foreign currency export earnings or its annual foreign currency export earnings are less than its annual foreign currency obligations; and
(iii) the Resident Payee has invoiced or will invoice the Resident Payor in foreign currency; and

(b) provide supporting documents as evidence of its six (6) months foreign currency import obligations, to the receiving bank.

2. A Resident Payor shall be present at the remitting bank and shall –

(a) make a declaration that the Resident Payor has foreign currency earnings from export; and
(b) provide a copy of Resident Payee’s declaration under paragraph 1(a) above, to the remitting bank.

3. A Resident Payee and a Resident Payor shall make the declaration required under paragraphs 1 and 2 respectively on an annual basis.

4. A Resident Payee and a Resident Payor shall provide a licensed onshore bank with all documentary evidence required by the licensed onshore bank as part of its customer due diligence process.

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