Malaysian Bar Council Says No To O’seas Firms Advising On Islamic Finance

Bloomberg has this interesting report..And unlike the Indian’s opposition to foreign law firms in general for once we tend to agree with an official Malaysian body…

Bloomberg report

Malaysian Bar Council Opposes Plan to Let In Foreign Law Firms

April 24 (Bloomberg) — Malaysia’s Bar Council said it opposes a government plan to let international law firms open offices in the country to advise on Islamic finance because it may stunt development of local expertise.

“I don’t think this can be done without the cooperation and assistance of the Bar Council,” President Ragunath Kesavan said in an interview yesterday. “We’re the regulatory body.” He said the group will continue to work with the government.

Prime Minister Najib Razak scrapped ownership limits for overseas companies in some services industries April 22 to help offset a projected slump in foreign investment. As part of the liberalization, Malaysia will allow as many as five foreign law firms to set up offices as it competes with neighboring Singapore for a larger slice of the Islamic bond market.

The Bar Council would prefer foreign firms to be allowed in through joint ventures, the group said in a statement yesterday. Letting such firms do business without local partners avoids any requirement to share expertise with Malaysian lawyers in return for their knowledge of local laws, Kesavan said.

Malaysia’s central bank supports allowing firms in “on a stand-alone basis,” because they may attract Islamic finance business, the statement said.

“We are not convinced that this will be the case,” Kesavan said. Local law firms are also subject to racial quotas in order to do work for government-linked companies, and legal- services liberalization should also tackle this restriction, he said.

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