Scenario: a Vietnamese investor wants to acquire an operating manufacturer in Selangor. Malaysia has no general “FDI approval gate” as many assume — but it has two things Vietnam does not: Bumiputera requirements in some sectors and capital gains tax on unlisted shares (since 2024).
Malaysia: no general approval — but Bumiputera and sectoral caps
Malaysia has no general foreign-investment approval for M&A. Controls are scattered by sector: some industries require minimum Bumiputera (indigenous) equity or sectoral licences (financial services, telecoms, energy and the like); new manufacturing projects go through MIDA for incentives. When acquiring an operating company, the first job is checking whether the target’s sector carries Bumiputera or licensing requirements — breaching them post-deal can put the target’s licences under review.
Merger control: the MyCC — voluntary, but the law is tightening
The Malaysia Competition Commission (MyCC) currently operates a voluntary regime under the Competition Act 2010 — unlike Vietnam’s mandatory notification above thresholds. Malaysia is, however, building a mandatory merger notification regime; buyers signing long-dated deals should include provisions for the new law taking effect mid-stream. Current practice: large deals should still self-assess competition impact to avoid a post-deal MyCC investigation.
Vietnam: capital-contribution registration plus mandatory notification
In Vietnam, a foreign investor buying shares or stakes must complete registration of capital contribution, share or stake purchase under the Law on Investment 143/2025/QH15 (effective 1 March 2026, replacing Law 61/2020/QH14) in prescribed cases; register member/shareholder changes under the Enterprise Law 2020 (amended by Law 76/2025/QH15, effective 1 July 2025); and file the mandatory pre-closing economic concentration notification under the Competition Law 23/2018/QH14 + Decree 35/2020/ND-CP above thresholds.
Tax: Malaysia has had capital gains tax since 2024 — price it in
Since 1 March 2024, Malaysia imposes capital gains tax on transfers of unlisted shares by companies (on net gains) — ending the “no capital gains tax” era many investors still assume. Corporate sellers must factor this into net pricing. In Vietnam, organisations transferring capital pay CIT under the CIT Law 67/2025/QH15 + Decree 320/2025/ND-CP; individuals pay PIT.
Quick comparison
| Criterion | Malaysia | Vietnam |
|---|---|---|
| Foreign-investment approval | No general regime; sectoral screens: Bumiputera, specialist licences | Registration of capital contribution/share purchase in prescribed cases (Law 143/2025) |
| Merger control | MyCC: voluntary (mandatory regime being built) | Mandatory pre-closing notification above thresholds (Law 23/2018 + Decree 35/2020) |
| Capital-transfer tax | Capital gains on unlisted shares since 1/3/2024; check the Vietnam–Malaysia treaty | Organisations: CIT; individuals: PIT |
| Typical closing timeline | 2–4 months; Bumiputera/sectoral-licence DD is the bottleneck | 1–3 months |
Recommended actions
1. Check the target’s Bumiputera/sectoral-licence requirements before valuation. 2. Price the 2024 capital gains tax into the seller’s net proceeds. 3. Provide for the future mandatory merger regime in the contract. 4. Confirm with local counsel.
Frequently Asked Questions
Does buying shares in Malaysia need investment approval like M&A in Vietnam?
Malaysia has no general foreign-investment approval for M&A. Controls sit at sector level: minimum Bumiputera (indigenous) equity requirements or specialist licences (finance, telecoms, energy and the like). Acquiring an operating company requires checking whether the target’s sector carries these requirements. In Vietnam, the corresponding gate is registration of capital contribution, share or stake purchase under the Law on Investment 143/2025.
How do Bumiputera requirements affect an M&A deal?
Some Malaysian sectors require minimum Bumiputera equity. If the post-deal ownership structure breaches this, the target’s operating licences may come under review — check during DD.
What are Malaysia’s merger-control thresholds?
The MyCC currently runs a voluntary regime under the Competition Act 2010 — no mandatory filing thresholds. Malaysia is building a mandatory merger notification regime, so contracts should provide for the new law taking effect.
What is hardest in Malaysian due diligence compared with Vietnam?
Verifying Bumiputera requirements and specialist licences attached to the target; land (Malay reserve land cannot be foreign-owned). In Vietnam, DD typically snags on land-use rights and sub-licences.
What tax applies on transferring shares in a Malaysian company?
Since 1 March 2024, Malaysia taxes capital gains on transfers of unlisted shares by companies (on net gains) — the Vietnam–Malaysia double tax treaty should be checked. In Vietnam, organisations pay CIT and individuals pay PIT.
How long does a Malaysian M&A deal usually take?
About 2–4 months; the bottleneck is usually Bumiputera and sectoral-licence DD, while general administration is relatively quick.
