| Malaysia is poised to take steps to open up its legal sector to foreign law firms this year. Following the lead taken by Singapore and more recently South Korea, Malaysia has taken initiatives to liberalise its market, with the Malaysian Parliament approving the new Legal Professional (Amendment) Act 2012 in June of last year. Associations have in the past been formed with Malaysian firms, with Baker & McKenzie establishing an association with Wong & Partners and Rahmat Lim & Partners being the associate firm of Singapore’s Allen & Gledhill.
The liberalisation will allow foreign firms to practice in Malaysia in one of two ways. The first would be by entering into a joint venture with a local firm and this would enable firms to practice corporate work as well as Islamic finance and international arbitration. The second route would permit foreign firms to set up a stand-alone presence without a tie-up – though common sense would suggest that a Malaysian qualified/trained partner would be needed to advise on Malaysian elements. The second avenue follows the precedent set by Singapore, that is the Singapore’s Qualified Foreign Law Firm vehicle, and though it has its benefits, the areas of practice that could be undertaken in Malaysia would be limited. Criminal law, probate and conveyancing for example would be proscribed. Trowers Hamlin was the first firm to establish a local presence in Kuala Lumpur following the announcement in June 2012. By mid-July it was out of the starting gate and the firm set up a non-trading representative office on the ground after being granted special approval from the Malaysia Investment Development Authority. Once the new legal framework is firmly in place, the UK firm will aim to acquire an independent license which will enable it to widen its remit and provide advice in relation to energy, infrastructure, PPP and Islamic finance. Whilst the move to liberalise is being welcomed by many firms, some private practitioners have expressed reservations given that the Malaysian market has traditionally leaned more towards domestic work. Legal work in Malaysia may be limited until the banking sector opens up too. See also: Liberalisation of the legal profession in Malaysia by Norhisham Abd Bahrin, Azmi & Associates, Malaysia |
