International firm Trowers & Hamlins has been awarded what it says is the first licence allowing a foreign firm to operate in Malaysia.

The firm has been granted a Qualified Foreign Law Firm (QFLF) licence that will allow it to operate independently in Malaysia and advise on international legal issues, subject to certain restrictions.

A foreign law firm licensed as a QFLF does not require a Malaysian law firm as a partner, but only up to five QLFL licences will be granted as they were created to support the Malaysian government’s Malaysian International Islamic Finance Centre (MIFC) initiative.

Licences will only be granted to international firms that have proven expertise in international Islamic finance, and that are able to support and contribute to the MIFC.

The licence is for three years and is renewable. The firm will not be permitted to advise on Malaysian law.

Prior to receiving the licence Trowers & Hamlins, which has four of its nine offices in the UK, operated a non-trading representative regional office in Kuala Lumpur after receiving approval from the Malaysia Investment Development Authority.

The firm’s regional managing partner Nick White (pictured), who has been based in Kuala Lumpur since 2012, said the licence would enable the firm to grow additional capacity ‘to further advance our reach and capabilities here’.

Liberalisation of legal services in Malaysia began after the Legal Profession (Amendment) Act 2012 and further amendments to the legislation came into force on 3 June 2014 together with the Legal Profession (Licensing Of International Partnerships And Qualified Foreign Law Firms And Registration Of Foreign Lawyers) Rules 2014.

Licences may be issued to foreign law firms to operate either an international partnership with a Malaysian law firm or as a qualified foreign law firm. Alternatively, a Malaysian law firm can choose to employ a foreign lawyer.

Foreign lawyers working in international partnerships and qualified foreign law firms have to reside in Malaysia for at least 182 days in any calendar year.

The Malaysian Bar said a key consideration behind the recent legislation was a desire to ensure that 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 local firms to achieve a level of expertise that will allow them to compete with foreign firms on a level playing field.

As a result, the bar said the process of liberalisation would be gradual and progressive.