[Column] Is the removal of the 30% requirement for private education "the beginning of deregulation" – Malaysia's Bumiputra policy by industry

✅ Roughly speaking

• 📚 The Malaysian Ministry of Education has announced that it will remove the 30% contribution requirement for Bumiputras that it imposed on private educational institutions.
• ⚠️ However, the Department of Education said the decision was made in consultation with MITI, which explained the next day that it was not aware of it. The revised guidelines and license renewal practices are far from finalized yet.
• 🧭 This does not mean a setback for the Bumiputra policy as a whole. In areas such as government procurement, oil and gas, automobile imports, and real estate, it is likely that the direction of securing Bumiputra's participation will continue in other forms.
• 🔍 When considering the company, it is necessary to break down not only the shareholder structure, but also the licenses, trading qualifications, the composition of the products on the shelves, and the state's sales quotas.

Introduction

This time, we will explain the overall picture of the Bumiputra policy, which is changing from industry to industry, starting with the elimination of the 30% requirement imposed on private educational institutions in Malaysia.

When I saw this report, my first concern was whether changing requirements in one area could be interpreted as a change in the entire system.
Therefore, we re-examined the current treatment of other industries.

On September 21, 2026, the Malaysian Ministry of Education announced that it would remove the requirement for Bumiputra to hold a minimum 30% stake in private educational institutions under its jurisdiction, which it had sought in private limited liability companies.
The announcement targets private educational institutions (IPS) and does not list the types.
The news coverage focuses on cram schools (tuition centers).

This requirement was outlined in a 2006 policy document.
The Star's report According to the company, concerns have arisen in recent years that cram schools and other facilities that cannot meet the requirements may not be able to renew their business licenses after 2027.

Bernama reports on the Ministry of Education's announcement According to the report, the adjustments are intended to address current educational needs and open up participation in the education sector more widely.
The same announcement also stated that the decision was made in consultation with MITI.
However, it came out the next day Bernama's explanation of MITI The Ministry of Investment, Trade and Industry (MITI) was not aware of this adjustment, and the Bumiputra equity policy was attributed to the Ministry of Economy.

An explanation that something has been discussed and an explanation that something is not understood are incompatible as they are.
Moreover, Bernama's September 20th report According to the Ministry of Education, the day before the announcement, it said it would submit a proposal to the Cabinet next week to review the cram school ownership structure.
Therefore, at the time of writing, we can only confirm that the Ministry of Education has announced a policy of elimination, and we cannot say that the revised guidelines, transitional measures, and license renewal practices have been finalized.

This discrepancy between ministries is symbolic in understanding Bumiputra policy.
This is because the Bumiputra policy is not a uniform 30% regulation based on one law, but is spread across ministries, state governments, regulatory agencies, government procurement schemes, and state-owned enterprise trading schemes.

Bumiputra policy is not "one regulation"

The term "Bumiputra policy" often evokes the idea of a system in which Bumiputra holds 30% of a company's shares.
However, the actual system is not that simple.

In one industry, stock ownership is a requirement, while in another, the composition of directors, management, and employees is also a factor.
Furthermore, while it is possible to enter the general market, it may be necessary to qualify as a Bumiputra company in order to participate in government projects and transactions with state-owned enterprises.
Furthermore, in the real estate sector, instead of the company's shareholder structure, a system is in place to reserve a certain percentage of the developed properties for Bumiputra.

Therefore, when considering the impact of the Bumiputra policy, it is not enough to simply ask, "Does the company need 30% Bumiputra shareholders."
It is necessary to separate and verify who the regulatory body is and what permits, qualifications, and trading opportunities are at issue.

I myself have previously been involved in supporting buyers in acquisition cases for Malaysian companies.
The target company belonged to an industry subject to Bumiputra regulations.
What I realized at that time was that simply checking the shareholder structure was not enough to complete the review.

To create a system that meets the requirements, it was necessary to design a combination of investment, contract, and licensing relationships, resulting in a system that was not simple.
The more treatment is given, the more complex the structure becomes, and in retrospect, that complexity itself remains a burden of maintenance and explanation.

The 30% requirement remains in retail and distribution

One representative example of a company with explicit Bumiputra investment requirements is the foreign-owned retail and distribution industry.
The guidelines governing foreign investment participation in the distribution industry are under the jurisdiction of the Ministry of Domestic Trade and Cost of Living (KPDN).

Guidelines on Foreign Capital Participation in the Distribution Industry is seeking that at least 30% of the company's shares in the hypermarket be held by Bumiputras or Malays.
Furthermore, in addition to holding shares, it is also conditional on allocating at least 30% of the inventory management units (Stock Keeping Units, SKUs) displayed on the shelves to products of Bumiputra or Malay small and medium-sized enterprises.
For convenience stores involving foreign capital, the same guidelines stipulate that foreign ownership should be limited to a maximum of 30%, with at least 30% reserved for Bumiputras or Malays.

Here, policies extend beyond mere stock ownership to include the composition of products on the shelves.

Oil and gas: Requirements vary by trade classification

In the oil and gas sector, the licensing and registration system required to trade with PETRONAS is of great importance.
PETRONAS Registration Guidelines Each Standardized Work and Equipment Category, a classification of products and services, has its own minimum requirements for Bumiputra.

The ratio is not uniform; depending on the classification, it can be 0%, 30%, 51%, or 100%.
Moreover, it's not just stocks that are confirmed.
The guidelines require that four levels-equity, board of directors, management, and employment-each meet a predetermined ratio.

This system aims to ensure not only formal minority shareholders but also substantial participation, including management and employment.

The Bumiputra-limited quota for automobile imports is clearly defined

The Bumiputra policy is still clearly maintained regarding Open Approved Permit, which is used for importing used cars and other similar items.
MITI's Approved Permit Guide The Open AP applicant company is a 100% Bumiputra-owned, privately held limited liability company, subject to the condition that it has a minimum paid-up capital of 1 million ringg.

The government has expanded the application range from July 2024, but has not opened it up to non-Bumiputra companies.
MITI's announcement dated June 18, 2024 According to the report, the measure expands the scope of Bumiputra to include Bumiputra companies with no experience in the automotive business, making it possible for them to apply.

Government procurement and construction need to be considered separately from the general market

Treasury Department Public Consultation Document on the 2022 Budget This includes measures such as price incentives for Bumiputra companies in government procurement, priority quotas for certain scale procurement, and incentives for Bumiputra manufacturers.
CIDB Contractor Registration Guide According to the, the construction industry also has qualifications to participate in government works and Bumiputra status certificates, in addition to the registration required for general construction works.

In this case, it does not mean that non-Bumiputra companies cannot operate the construction industry itself.
It is necessary to distinguish between the question of whether one can enter the general private market and the question of whether one can participate in government projects that are reserved and favored for Bumiputras.

Real estate appears as a state-by-state sales quota

In the real estate sector, the sales quotas and discounts for Bumiputra-oriented developments are more important than the company's investment ratio.
The specific ratios and termination procedures vary by state.

For example, in Selangor, developers can apply to the State Housing and Property Authority (LPHS) to have their quotas lifted for unsold homes for Bumiputra.
Selangor State Parliament's response According to the law, the lifting of restrictions will be divided into four stages depending on the progress of the construction, and it is assumed that all housing units in the slots other than Bumiputra have been sold out.
According to the same response, developers who received the release would pay the state the equivalent of the Bumiputra discount, which at the time of the response was 7% of the selling price for residential properties and 10% for commercial and industrial properties.
The actual application is State-specific online system It will be done through.

Therefore, in real estate businesses, it is necessary to individually review not only federal-level foreign investment regulations but also state policies regarding the location of the land.

The capital market also has a Bumiputra quota

Malaysian Securities Commission FAQ According to the ACE market, listed companies will be required to allocate 12.5% of their expanded outstanding shares to Bumiputra investors approved and certified by MITI or the Treasury Department by a certain point in time.
The same FAQ also outlines the conditions under which, when making a public offering, at least 50% of the shares offered will be for general investors in Bumiputra.

This is less a regulation of a specific industry and more a cross-cutting policy related to access to capital markets.

On the other hand, the manufacturing sector has been significantly liberalized

In contrast to these is the manufacturing industry.
MIDA's announced investment policies According to the law, since June 2003, foreign investors can, in principle, hold 100% of the shares in new manufacturing projects and the expansion and diversification of existing businesses.

However, since some companies still have share and export conditions that were imposed as individual approval conditions before 2003, the past approval conditions of existing companies need to be checked separately.
This liberalization of manufacturing indicates that Malaysia is not maintaining the 30% requirement in all sectors.

Going forward, we will move from "uniform elimination" to "selective reorganization."

Given the recent developments surrounding private educational institutions, it is premature to assume that the 30% requirement will be immediately eliminated in other industries as well.

The Malaysian government has made raising its stake in Bumiputera one of its driving measures in Pelan Transformasi Ekonomi Bumiputera 2035, also known as PuTERA35.
Published by the Statistics Bureau PuTERA35 Goal Dashboard has set a target of 30.0% for shareholding by Bumiputra individuals and mandate institutions in 2035, compared to 18.4% in 2020.
List of PuTERA35 policies Other examples include disclosure regarding the ethnic composition of listed companies, promotion of listing of Bumiputra companies, and strengthening of beneficiary owner information.

However, the goal itself is not fixed.
Report by Bernama on September 7, 2026 According to the Minister of Economy, based on the report on the progress of PuTERA35, he intends to examine the targets in detail from the end of the year to the beginning of the following year.

Therefore, the future direction is likely to be not the elimination of the Bumiputra policy itself, but rather a restructuring of it as follows:

Firstly, in sectors with a high supply shortage or a high need for foreign investment, such as education, digital technology, and advanced manufacturing, the requirements for equity at the entry stage should be relaxed.
Secondly, the government should maintain preferential treatment for Bumiputra in areas where it has direct control over trade opportunities, such as government procurement, supply chains for state-owned enterprises, import permits, and real estate development.
Thirdly, we need to shift our focus from a nominal 30% shareholder structure to substantive participation, including directors, management, employees, procurement partners, fundraising, and technology transfer.
Fourth, it strengthens the disclosure of beneficiary owners and confirmation of effective control, making it more difficult for so-called nominal lending to meet formal requirements.

If this direction continues, it is likely that the more focused the design is on shaping, the heavier the maintenance burden will become.

Summary

The elimination of the 30% requirement for private educational institutions is a notable change in Malaysia's Bumiputra policy.
However, this cannot be seen as the end of the entire policy.

Rather, Malaysia appears to be trying to secure Bumiputra's participation through alternative schemes such as government procurement, state-owned enterprise transactions, import permits, real estate, and capital markets, while reviewing investment requirements that hinder investment and service delivery.

For companies considering doing business in Malaysia in the future, the key is not a choice between having or not having Bumiputra regulations.
It involves separating company formation, business licenses, shareholder structure, government procurement, transactions with state-owned enterprises, the composition of goods on the shelves, and state government real estate policies one by one.

The discrepancy in explanations between the Ministry of Education and MITI also highlights the difficulty of policies spanning multiple administrative entities.
Regarding the education sector, we believe it is safe to separate the elimination policy from its actual application until the revised documents of the Ministry of Education, the confirmation of the Ministry of Economy, and the license renewal practices from 2027 onwards are revealed.