Lawyer Fee for Buying a Factory in Malaysia: SRO 2023 Scale, Worked Examples and Stamp Duty
The SRO 2023 legal fee scale for buying a factory, worked examples at RM1m, RM3m, RM5m and RM10m, the 25% discount rule, loan agreement fees, 8% service tax and the fixed fees on your lawyer's bill.
Key Takeaways
- The lawyer fee for buying a factory in Peninsular Malaysia follows the Solicitors' Remuneration Order 2023 (SRO 2023): 1.25% on the first RM500,000 (minimum RM500), 1% on the next RM7 million, and a negotiated fee of no more than 1% on any amount above RM7.5 million.
- One scale fee covers the sale and the transfer: there is no separate legal fee for the Memorandum of Transfer. If you take a loan, the loan agreement is charged separately on the same scale, on the loan amount.
- Lawyers may give a discount of up to 25% on the scale fee, and legal fees carry 8% service tax.
- Worked example: a RM3 million factory with an 80% loan costs RM31,250 for the SPA, RM25,250 for the loan agreement and RM4,520 in service tax, before stamp duty of RM104,000 on the transfer and RM12,000 on the loan.
- Disbursements are extra: land office registration, searches, and fixed fees such as RM300 for a private caveat and at least RM3,000 for a state consent application on a property above RM1 million.
A lawyer's fee for buying a factory in Malaysia is set by SRO 2023: 1.25% on the first RM500,000 of the price and 1% on the balance up to RM7.5 million, plus 8% service tax. A RM3 million factory therefore carries a SPA legal fee of RM31,250 before tax, or RM23,437.50 if the lawyer gives the maximum 25% discount. A bank loan adds a second fee on the loan amount, and stamp duty is a separate government charge.
Below: the scale, worked examples at RM1 million, RM3 million, RM5 million and RM10 million, the discount rule, loan agreement fees, the fixed fees and disbursements that appear on the bill, and how to compare quotes.
The SRO 2023 Legal Fee Scale for a Factory Purchase
The Solicitors' Remuneration Order 2023 (P.U. (A) 207/2023) was gazetted on 12 July 2023 and took effect on 15 July 2023, replacing the SRO 2005. It applies to non-contentious work by solicitors in Peninsular Malaysia, including the sale and transfer of factories, warehouses and industrial land. Work that started before 15 July 2023 stays under the old order.
| Price of the factory | Scale fee (First Schedule, Table A) |
|---|---|
| First RM500,000 | 1.25% (minimum RM500) |
| Next RM7,000,000 (RM500,001 to RM7.5 million) | 1% |
| Above RM7,500,000 | Negotiable, but not more than 1% of the excess |
For most factory deals the quick formula is: RM6,250 plus 1% of the price above RM500,000. A RM2 million factory is RM21,250; a RM6 million factory is RM61,250.
Five rules in the order that shape your bill:
- One fee for the sale and transfer. The First Schedule is titled "Sale and Transfer", and the fee covers all normal work up to completion, including preparing the SPA. Older guides that add a third "MOT legal fee" on top of the SPA fee overstate the cost.
- Each side pays its own lawyer. A solicitor may act for only the vendor or the purchaser, not both, and the seller pays its own lawyer on the same scale.
- Your lawyer can also act for your bank. The purchaser's solicitor is allowed to act for the financier in the loan documents.
- The fee excludes disbursements. Registration fees, stamp duty, search fees, valuer fees, travel and other expenses are billed separately.
- Price or adjudicated value. The scale is applied to the price or the adjudicated value of the transaction.
Service tax of 8% on legal fees
Legal services are taxable at 8% since the service tax rate rose from 6% on 1 March 2024 for most services, with food and beverage, telecommunications, parking and logistics left at 6% (The Star). The tax is charged on the professional fee, not on disbursements that are pure pass-through government charges.
Worked Examples: Legal Fees for a RM1m, RM3m, RM5m and RM10m Factory
All four examples assume an 80% loan, full scale fees and no discount. Stamp duty is included so you can see the full bill; it is explained in our stamp duty guide for factory buyers.
| Item | RM1 million | RM3 million | RM5 million | RM10 million |
|---|---|---|---|---|
| SPA legal fee (scale) | RM11,250 | RM31,250 | RM51,250 | up to RM101,250 |
| SPA fee after max 25% discount | RM8,437.50 | RM23,437.50 | RM38,437.50 | up to RM75,937.50 |
| Loan amount (80%) | RM800,000 | RM2,400,000 | RM4,000,000 | RM8,000,000 |
| Loan agreement legal fee (scale) | RM9,250 | RM25,250 | RM41,250 | up to RM81,250 |
| 8% service tax on both fees | RM1,640 | RM4,520 | RM7,400 | up to RM14,600 |
| Legal fees incl. tax | RM22,140 | RM61,020 | RM99,900 | up to RM197,100 |
| Transfer stamp duty (MOT) | RM24,000 | RM104,000 | RM184,000 | RM384,000 |
| Loan stamp duty (0.5%) | RM4,000 | RM12,000 | RM20,000 | RM40,000 |
| Total before disbursements | RM50,140 | RM177,020 | RM303,900 | up to RM621,100 |
| As % of price | 5.0% | 5.9% | 6.1% | 6.2% |
Legal fees on their own come to about 2% to 2.2% of the price, including tax. Stamp duty is the larger cost, and it cannot be negotiated.
How the RM3 million figures are built
- SPA fee: 1.25% x RM500,000 = RM6,250, plus 1% x RM2,500,000 = RM25,000, total RM31,250
- Loan fee on RM2.4 million: RM6,250 + 1% x RM1,900,000 = RM25,250
- Service tax: 8% x (RM31,250 + RM25,250) = RM4,520
- With the maximum 25% discount on the SPA fee: RM31,250 x 75% = RM23,437.50, plus 8% tax = RM25,312.50
The RM10 million case
Above RM7.5 million the fee on the excess is negotiated, capped at 1%. On a RM10 million factory the fixed part is RM76,250 (RM6,250 plus RM70,000) and the remaining RM2.5 million attracts up to RM25,000, so the SPA fee is at most RM101,250 and is often agreed lower. The legal fees and stamp duty calculator works out every line for your own price and loan.
The 25% Discount: What You Can Ask For
Paragraph 6 of SRO 2023 lets a solicitor give a discount of not more than 25% on the Table A scale for sale and transfer, and on the Table A scale for loan and security documents. No discount is allowed on the other schedules, which include tenancy fees, discharge of charge and the fixed fees for caveats and statutory declarations.
In practice:
- Ask each firm whether the quote is at full scale or already discounted, and by how much.
- A quote below 75% of the scale fee breaches the order. Be wary of it, because the firm must recover its cost somewhere.
- Compare the whole bill, not just the headline fee: two firms at the same discount can differ by thousands of ringgit in disbursements.
Loan Agreement Legal Fees (Third Schedule)
If you finance the purchase, the facility agreement and the charge are prepared under the Third Schedule:
- Principal instrument: full scale, 1.25% on the first RM500,000 (minimum RM500), 1% on the next RM7 million, and up to 1% above RM7.5 million, calculated on the amount financed.
- Each subsidiary instrument (for example a separate charge or assignment): 10% of the full scale fee, minimum RM500 and maximum RM2,000.
- Islamic financing: the scale is applied to the principal amount financed, not the total sale price under the financing contract.
Factory loans for companies often come with guarantees and debentures, so ask the bank's panel lawyer for a complete list of documents before you accept the facility. Our factory loan guide covers margins, tenures and the rest of the financing cost, and current base rates are on the commercial loan rates page.
Fixed Fees and Disbursements on a Factory Purchase
Besides the scale fee, SRO 2023 sets fixed or minimum fees for common items, and the bill will also list government charges and expenses paid on your behalf.
| Item | Fee under SRO 2023 (Fifth Schedule) |
|---|---|
| Private caveat after the SPA or loan | RM300 for the first title, RM100 each further title |
| Withdrawal of private caveat | RM200 for the first title, RM100 each further title |
| Statutory declaration | RM150 per document |
| Application for state consent to transfer, charge or lease, property above RM1 million | At least RM3,000 (RM500 if consent is for the charge only) |
| Same application, RM100,001 to RM1 million | RM500 |
| Notice of sale or transfer to the local council | RM100 per form |
| RPGT form CKHT 2A (purchaser) | At least RM400 |
Disbursements you will also see:
- Land office registration fees for the transfer and the charge, under the state land rules
- Land, bankruptcy and winding-up searches on the seller
- Stamping, courier, printing and travel
State consent matters for factories more than for homes: leasehold industrial titles often carry a restriction in interest, and foreign buyers need consent too. Expect both the RM3,000 application fee and extra time. See freehold vs leasehold and the guide for foreign companies buying a factory.
Who Pays What in a Factory Sale
| Cost | Buyer | Seller |
|---|---|---|
| Own lawyer's SPA fee (SRO 2023 scale) | Yes | Yes |
| Loan agreement legal fee and 0.5% loan stamp duty | Yes, if financing | No |
| Transfer stamp duty (Malaysian buyers: 1% to 4%; foreign buyers on factories, warehouses and industrial land: flat 4%) | Yes | No |
| Discharge of the seller's existing charge | No | Yes, RM400 for the first title under the Fourth Schedule, plus disbursements |
| RPGT forms and tax | Files CKHT 2A and remits the retention sum | Files CKHT 1A (fee at least RM500) and pays any RPGT |
| Agent's commission | Only if appointed by the buyer | Usually |
The buyer must hold back part of the price for the seller's real property gains tax and pay it to LHDN; the rates and deadlines are in the RPGT guide.
Checklist: How to Compare Lawyer Quotes for a Factory
- The quote shows the SRO 2023 calculation for the SPA fee and the loan fee separately
- It states the discount applied (0% to 25%) and adds 8% service tax on fees only
- Disbursements are itemised: registration, searches, stamping, state consent
- The firm has done industrial transactions: land category, express conditions, CCC and approved plans need checking, see the factory buying guide
- The firm is on your bank's panel, or the bank accepts it
- Timeline for state consent and stamping (instruments must be stamped within 30 days of signing) is written down
- You know which fees are payable on signing and which on completion
To see where your target price sits against recent deals, check JPPH-recorded factory prices in Selangor and Kuala Lumpur: the median semi-detached factory sold for RM4.8 million in the 24 months to July 2026, so the RM3 million and RM5 million columns above cover most owner-occupier purchases. Shortlisting? Browse factories for sale in Selangor with power, ceiling height and floor loading listed for each unit.
FAQ
How much is the lawyer fee for buying a factory in Malaysia?
Under SRO 2023 the SPA fee is 1.25% on the first RM500,000 (minimum RM500) and 1% on the next RM7 million, so a RM3 million factory costs RM31,250 and a RM5 million factory RM51,250. Add 8% service tax, and a separate fee on the same scale for the loan agreement if you borrow.
Is there a separate legal fee for the Memorandum of Transfer?
No. The First Schedule fee covers the sale and transfer as one transaction, including preparing the SPA and the work up to completion. You still pay stamp duty and registration fees on the transfer, but not a second scale fee.
Can a lawyer give a discount on the legal fee?
Yes, up to 25% of the Table A scale fee for the sale and transfer, and up to 25% on the Table A scale for loan documents. Discounts are not allowed on the other schedules, such as discharge of charge, caveats or tenancy agreements.
Is SST charged on legal fees for a factory purchase?
Yes. Legal services carry 8% service tax since 1 March 2024. On a RM3 million factory with an 80% loan, the tax on the two scale fees is RM4,520.
How much is the legal fee for a factory loan agreement?
It follows the same scale on the loan amount: RM9,250 on an RM800,000 loan, RM25,250 on RM2.4 million and RM41,250 on RM4 million. Each additional security document costs 10% of the scale fee, between RM500 and RM2,000.
Do foreign buyers pay higher legal fees for a factory?
No, the SRO 2023 scale is the same for every buyer, but the transfer stamp duty on a factory differs. A foreign company, or an individual who is neither a Malaysian citizen nor a Malaysian permanent resident, pays a flat 4% on the price or market value, whichever is higher, for factories, warehouses and industrial land. Residential property transferred to such buyers is charged 8% from 1 January 2026, while non-residential property stays at the flat 4%. If a Malaysian company has foreign shareholders, ask your conveyancing lawyer to confirm whether the flat 4% applies. A foreign buyer will usually need state consent, which adds an application fee of at least RM3,000 for a property above RM1 million, plus time.
Who pays the lawyer fees when buying a factory?
Each party pays its own lawyer. The buyer pays the SPA fee, the loan agreement fee and all stamp duty; the seller pays its own SPA fee and the cost of discharging any existing bank charge.
Buying or renting, talk to us
Send us the numbers that decide the shortlist: required amps, built-up area, floor loading, preferred area and target date. We reply with what actually exists, including units that are not advertised publicly. For 800A to 4,000A+ requirements, see high-power factories in Selangor.
| Agent | Licence | Mobile / WhatsApp | |
|---|---|---|---|
| Adam | 60176729873 | +60 17-672 9873 | |
| Yuki | 60167724476 | +60 16-772 4476 |
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