The opening up of Malaysia to foreign law firms and foreign lawyers is a natural progression as world and regional economies become more integrated in trade in goods and services.
The Malaysian Bar is thus pleased to announce that the amendments to the Legal Profession Act 1976 (“LPA”) and the Legal Profession (Licensing of International Partnerships and Qualified Foreign Law Firms and Registration of Foreign Lawyers) Rules 2014 came into force on 3 June 2014. With the coming into force of these amendments, foreign law firms and foreign lawyers will now be permitted to practise in Peninsular Malaysia in the manner set out in the legislation and the Rules.
Three Categories of Licences
Under the newly–created Part IVA of the LPA, licences may be issued to foreign law firms to operate either an international partnership with a Malaysian law firm, or a qualified foreign law firm (“QFLF”). Alternatively, a Malaysian law firm may choose to employ a foreign lawyer.
An international partnership is a partnership between a foreign law firm and a Malaysian law firm while a QFLF is a stand–alone foreign firm which does not require a Malaysian law firm as a partner. Licences for international partnerships and QFLFs will be for a period of three years and are renewable. Licences may be granted subject to terms and conditions. If approved, a Malaysian law firm will be granted a three–year licence to employ a foreign lawyer.
All individual foreign lawyers working in international partnerships, QFLFs or Malaysian law firms will have to register as foreign lawyers. Registrations may be granted subject to terms and conditions, and will have to be renewed annually.
“Fly–In Fly–Out” and Arbitration
One of the further amendments made was to section 37(2B) of the LPA on “fly–in fly–out”, which will now allow a foreign lawyer advising on non–Malaysian law to be able to come to Malaysia and work on a project for up to 60 days in a calendar year, subject to immigration approval. Another amendment was to insert a new section 37A to the LPA, which will allow foreign lawyers to enter Malaysia for arbitral proceedings.
Permitted Practice Areas
International partnerships, QFLFs and individual foreign lawyers employed by Malaysian law firms will only be allowed to practise in the permitted practice areas. This is defined as “work regulated by Malaysian law and at least one other national law, or regulated solely by any law other than Malaysian law”. In the case of a QFLF, such aspect of work regulated by Malaysian law shall be undertaken in conjunction with one or more advocates and solicitors of the High Court of Malaya holding a valid and subsisting Practising Certificate.
Practice in the permitted practice areas will specifically exclude: constitutional and administrative law; conveyancing; criminal law; family law; succession law, including wills, intestate succession, probate and administration; trust law, where the settlor is an individual, and the law relating to charities and trust foundations, whether the settlor is an individual or a corporation; retail banking, including corporate or commercial loans to small and medium enterprises; registration of intellectual property; appearing or pleading in any court of justice in Malaysia, representing a client in any proceedings instituted in such a court or giving advice, whether or not the main purpose of which is to advise the client on the conduct of such proceedings (with certain exceptions); and appearing in any hearing before a quasi–judicial or regulatory body, authority or tribunal in Malaysia (with certain exceptions).
International partnerships, QFLFs and foreign lawyers employed by Malaysian law firms will be regulated by the Bar Council. The amendments to the LPA provide for the establishment of a Selection Committee that will be responsible for considering all applications, and for making recommendations for approval / non–approval to the Bar Council.
The Selection Committee will be co–chaired by the Attorney General and the President of the Malaysian Bar, and will have five members in all. The Bar Council will serve as the Secretariat for the Selection Committee. All applications should be directed to the Bar Council, using the forms prescribed by the new legislation and the rules made thereunder.
All international partnerships, QFLFs and foreign lawyers employed by Malaysian law firms will have to comply with the same rules and regulations governing advocates and solicitors in Peninsular Malaysia.
Liberalisation to be Gradual and Progressive
A major consideration undergirding the new legislation is a desire to ensure that the liberalisation of the Malaysian legal services market and the entry of foreign lawyers is balanced with the need for the development of Malaysian law firms, and to enable these firms to achieve a level of expertise that will allow them to compete with foreign law firms on a level playing field. This consideration means that the process of liberalisation will continue to be gradual and progressive.
The recent amendments to the LPA together with the Legal Profession (Licensing of International Partnerships and Qualified Foreign Law Firms and Registration of Foreign Lawyers) Rules 2014, the guidance notes and the application forms are available under the
Resources>Foreign Lawyers tab on the Malaysian Bar website.
The liberalisation of our legal market should be seen as a challenge that brings opportunities. The challenge is for Malaysian lawyers to build capacity and abilities to be more competitive, to broaden our horizons, spread our wings and forge new paths.
30 June 2014