In the Malaysian market, sponsors are typically parent corporations or holding companies with experience in the relevant industry. Sponsors can also be (and are not limited to) the following:

• foreign strategic sponsors – foreign corporations may sponsor Malaysian projects, whether independently or with Malaysian partner(s);
• joint venture co-sponsors – two or more corporations may participate jointly in developing a project and arranging its financing; and
• financial or infrastructure sponsors – infrastructure and private equity investors may sponsor projects through portfolio companies with expertise in the relevant industry.

On the financing side, lenders and financiers in Malaysian project finance transactions typically comprise conventional and Islamic banks, which may provide financing through bilateral, club or syndicated facilities. Financing may also involve regional and international banks. Projects may also be financed by capital market investors through bond or sukuk issuances. In such cases, lenders themselves or their related entities may take up other roles, including mandated lead arrangers, lead managers, or bookrunners, depending on the financing structure.

The PPP market developed from the Malaysia Incorporated Policy introduced in 1981, followed by the Privatisation Policy in 1983 – both of which promoted the collaboration between the public and private sector in economic development.

The Public–Private Partnership Unit (Unit Kerjasama Awam Swasta, or UKAS) was subsequently established under the Prime Minister’s Department as the central PPP agency to facilitate matters relating to PPP projects.

The Public–Private Partnership Master Plan 2030 (Pelan Induk Kerjasama Awam-Swasta (PIKAS) 2030) is Malaysia’s strategic policy framework for strengthening PPP governance as well as the implementation and monitoring of PPP projects until 2030. PIKAS 2030 also identifies emerging areas with PPP potential, including renewable energy, tourism infrastructure and smart agriculture, to foster a comprehensive and holistic approach to national development.

Malaysia currently has no single overarching PPP Act. Each transaction is generally governed by policies and guidelines issued by UKAS and the ministries, the project-specific privatisation or concession agreements between the Malaysian government and the concession company, and generally relevant or applicable legislations that impact the PPP projects.

Potential written approval requirements may arise in connection with changes to a concessionaire’s shareholders or shareholding structure, as well as proposed novations of the PPP agreements. The applicable approval requirements should be assessed against the relevant UKAS guidelines in addition to any consent requirements in the concession agreement.

General Funding Structure

Project financings are commonly undertaken through an SPV incorporated by sponsors, whether acting alone or through a joint venture. The SPV holds the project assets and contracts, incurs the financing, and is expected to repay debt and provide returns to investors from project-generated cash flow.

Funding typically comprises main project debt and sponsor equity, supplemented by ancillary facilities such as bank guarantee and revolving credit facilities for working capital. The main project debt may be structured as bilateral, syndicated or club-based and may also be underwritten. Where conventional and Islamic financiers participate, the club structure would be undertaken in order to accommodate Sharia requirements.

Security Package

The security package should cover the SPV’s assets and revenues, including project land, project assets, shares, bank accounts, receivables, insurance proceeds, and material contracts. In syndicated or club financings, the facility agent administers the facilities and a security agent or security trustee holds security for the secured financiers. Where relevant, an intercreditor or security-sharing agreement sets out the parties’ respective rights, priorities, and enforcement arrangements, among other terms.

Project Risks

Financiers may be exposed to construction and regulatory risks that can delay or prevent the project construction or operation, so these risks must be addressed at an early stage. The SPV must obtain and maintain necessary authorisation, licences and approvals from relevant authorities. Depending on the project, these may include approvals for land use, development orders and building approvals, environmental approvals, and sector-specific licences.

An insurance adviser may be appointed to provide an assessment of the insurance required to mitigate construction and operational risks. From the construction stage through to operation, different types of insurance may be appropriate, including property damage, public liability, delay, machinery breakdown, and workmen’s compensation.

The project documents should allocate construction, completion, cost-overrun, force majeure, change-in-law and termination risks among the project company, sponsors, contractors, financiers, and other project participants. Notably, engineering, procurement and construction (EPC) contracts commonly allocate the design, procurement, construction and timely completion of the project (among other things) to the contractor.

The Ministry of Investment, Trade and Industry and the Securities Commission Malaysia have jointly launched the Strategic Co-Investment Fund, which aims to support the missions of the New Industrial Master Plan 2030 (“NIMP 2030”). NIMP 2030 aims to support 21 sectors, including but not limited to aerospace, chemicals, electrical and electronics (E&E), pharmaceuticals, and medical devices, and identifies four emerging growth areas – namely, electric vehicles, advanced materials, renewable energy, and carbon capture, utilisation and storage.

More broadly, NIMP 2030 seeks to increase technology adoption and productivity. In this context, the growing demand for high-performance computing capacity is expected to drive further activity in digital infrastructure, particularly in data centres, cloud services, cybersecurity, and other supporting infrastructure. This outlook is further reinforced by the National AI Action Plan 2026–30.

The Malaysian Investment Development Authority reported on 25 September 2026 that information and communications technology attracted MYR103.3 billion in approved investments during the first half of 2026. Of that amount, MYR95.8 billion was attributable to data centres and cloud services.

However, further growth is expected to be selective. The Edge Malaysia reported on 14 September 2026 that the Data Centre Task Force had received more than 40 applications to establish or expand data centre operations. Proposals are assessed not merely by investment value, but also by their contribution to skilled employment, support of local suppliers, responsible use of energy, water and land, and Malaysia’s long-term economic and digital ambitions.

The Ministry of Finance’s Pre-Budget Statement 2027 further states that data centre incentives will be linked to energy and water efficiency, ensuring that national supplies are not strained for Malaysians.

Furthermore, the New Incentive Framework links level of incentives to a project’s measurable contributions to national priorities, including technology upgrading, quality jobs, domestic sourcing, and sustainability practices.

Taken together, current investment approvals and government policies, priorities and incentives suggest that digital infrastructure, E&E and renewable energy could continue to attract significant investment in the coming year, particularly in projects that deliver long-term, holistic economic benefits.

Lenders may take security over substantially all the project company’s assets, contractual rights and cash flows, together with security over the sponsors’ shares in the project company. The purpose is to give the lenders both recourse to assets and an alternative means of obtaining control over the project company following default. The principal collateral generally comprises project land or leases, shares, plant and machinery, receivables, bank accounts, rights under project agreements, insurance policies, bank guarantees and performance bonds, as well as certain IP and other present and future assets captured under a general debenture.

Project Land/Leases

Project land and leasehold interests are usually secured by a registered statutory charge. In Peninsular Malaysia, titled land and a registered lease may be charged under the National Land Code 2020 (NLC), which gives the chargee a registrable interest, custody of the issue documents of title or duplicate leases, and the statutory remedy to foreclose the land or lease.

Before a charge is executed or presented for registration, the title must be searched for existing encumbrances, category of land use, express conditions, and any restrictions in interest. The implied and express terms of the lease itself must also be reviewed. If necessary, consent from the relevant state authority, lessor, or relevant party may be required before the charge is registered.

Shares

Shareholders may grant security over their shares in the project company by way of a pledge or charge. This provides the lenders with an enforcement route through which they may acquire and assume control the project company while preserving its assets, contracts, licences and permits within the same entity.

Regarding shares in an unlisted company, a share certificate need not be issued unless requested by the shareholder or required by the company’s constitution. If original share certificates are issued, they would ordinarily be deposited with the security agent, together with executed but undated share transfer instruments and an irrevocable power of attorney. This enables the security agent to complete and register the share transfer to itself or a nominee, following an enforcement event and in accordance with the security documents. The transferee becomes the legal shareholder once it is entered in the company’s register of members. A share charge will usually extend to all rights and entitlements attaching to the shares, including dividends, distributions and voting rights; however, the shareholder is commonly permitted by contract to exercise voting rights before an event of default.

The project company’s constitution or shareholders’ agreement may also be amended or supplemented to prevent pre-emption rights, transfer restrictions or directors’ discretion from obstructing an enforcement transfer.

Separately, the creation of security over shares may be subject to contractual restrictions under the applicable contractual arrangements – in which case, the requisite consent(s) or approval(s) may need to be obtained prior to the creation of such security.

Plant and Machinery

Plant, machinery, equipment and other movable assets relating to the project may be subjected to a fixed charge. The specific debenture would create a charge over the project described generally and, to the extent possible, make specific reference to the asset. Inventory and raw materials are more appropriately covered by a floating charge, allowing the project company to use or dispose of them in the ordinary course until the charge crystallises following an agreed event.

The specific debenture may also contain the rights to appoint a receiver or a manager to step in and manage the asset upon an event of default.

Project Documents

Another asset available as collateral would be the project documents, which are typically secured in the form of an assignment and charge. The assignment would generally cover the project company’s rights, benefits, claims and receivables under those agreements, while the related proceeds would be subject to a charge. Where a project document restricts an assignment or requires the counterparty’s approval, the necessary consent should be obtained before completion or addressed in the counterparty’s acknowledgement of the notice of assignment.

The relevant counterparties would normally be instructed to pay contract proceeds into designated accounts charged to the security agent or financier in accordance with the instructions of the notice of assignment. Following an enforcement event, the assignee will be entitled to exercise the project company’s rights, collect amounts due and enforce the project documents either in the name of the assignor or in its own name, and the supporting power of attorney granted in favour of the assignee facilitates this process.

Accounts and Cash Deposits

Security can also be granted over cash deposits and designated accounts, such as disbursement accounts, revenue accounts, financial service reserve accounts, operating accounts, and maintenance reserve accounts. An assignment and charge may be granted over such accounts in favour of the security holder or financier. Where the account bank is also the financier, the financier can be granted with set-off rights to apply the account balance towards amounts due under the financing.

The account bank should be notified of the charge and assignment and should provide a written acknowledgement. That acknowledgement normally confirms the bank’s awareness of the security and the agreed account-operation mandate, as well as the circumstances in which it must follow instructions from the chargee rather than the project company.

Before default, an account may be operated by the project company, the chargee or both in accordance with the agreed arrangements. Following an event of default, control of the designated accounts would ordinarily pass exclusively to the chargee.

Insurances

The project company can grant an assignment and charge over its rights, title and interests in the project insurance policies, including the right to receive policy proceeds, make and pursue claims, and other benefits or amounts payable by insurers in connection with the insurance policy.

The insurer should receive a notice of the assignment recording that the assignee is endorsed as a loss payee and may include other terms, such as:

• giving the assignee prior notice of any cancellation, non-renewal or material amendment of the insurance policy; and
• giving the assignee the opportunity to remedy any default of payment to maintain the insurance.

Bank Guarantees/Performance Bonds

Bank guarantees and performance bonds issued in favour of the project company can be provided as security because they provide a source of recovery if a contractor fails to perform. The project company will normally assign and charge its rights and any proceeds under those instruments to the security agent or financier. Where possible, the project company should negotiate the terms of each bank guarantee or performance bond so that the issuing bank consents in advance to the assignment in favour of the assignee. The issuing bank should then receive a notice of assignment and provide an acknowledgement confirming that payments under the bank guarantee or performance bond will be made into the designated account charged to the assignee.

General Debenture

A general debenture that creates a fixed and floating charge over all the project company’s present and future assets and undertakings can also be provided as security in favour of the financiers. Certain IP such as industrial designs, patents, trade marks, copyright, and related proceeds may be secured and captured under the debenture as well.

The debenture normally authorises the security agent to appoint a receiver or manager to step in and manage the assets upon an event of default. An irrevocable power of attorney is normally included to enable the chargee to execute documents and take enforcement steps in the project company’s name.

Overview Of the Applicable Formalities and Perfection Requirements

A security package must be validly executed, duly stamped, and – where applicable – registered in the relevant public register. Each security provider must have the requisite capacity and, where necessary, obtain board or shareholder approval.

A land charge must be registered at the relevant Land Registry or Land Office. An assignment should be written, signed and absolute, and notified to the relevant counterparty to satisfy Section 4(3) of the Civil Law Act 1956 – otherwise the assignment may take effect in equity. Any power of attorney must be stamped and registered with the High Court.

In addition to asset-specific perfection, for companies registered in Malaysia, particulars of the registrable charge must also be lodged with the Companies Commission of Malaysia (CCM) within 30 days of its creation to protect the charge against the company’s liquidator and creditors.

Malaysian law permits a floating charge over all present and future assets of a company, ordinarily through a general debenture creating both fixed and floating charges. Section 353(g) of the Companies Act 2016 (CA 2016) expressly recognises a “floating charge on the undertaking or property of a company”.

The debenture typically creates a fixed charge over tangible movable property such as plant and machinery, as well as a floating charge over inventory, raw materials or cash. The company may ordinarily deal with floating charge assets in the normal course of business until crystallisation upon a triggering event.

Along with such security, the right to appoint a receiver or a manager would be granted to the debenture holder – at which point, the receiver or manager may be appointed to manage the assets for enforcement purposes. Additionally, a power of attorney would also be granted by the chargor to undertake all necessary action, and execute instruments in its name in favour of the debenture holder.

The costs associated with registering collateral security interests in Malaysia would typically include:

• the costs for charge registration with CCM;
• the registration fee to the land office in respect of land charges;
• the registration fee for powers of attorney with the High Court of Malaya;
• stamp duty costs, where applicable; and
• legal fees and disbursements pursuant to the Solicitors’ Remuneration Order 2023.

Generally, it is unnecessary for each item to be individually identified in the security document to grant a valid security interest in that time. A general description is sufficient if the security document defines the asset or class of assets with enough certainty for the collateral to be objectively identified.

It is important to note that registered or asset-specific collateral generally requires more precise identification. In relation to land security, the land must be described by its title and lot particulars to create security. Additionally, shares, bank accounts, and project contracts should be identified by the particulars required by the relevant registry or perfection process.

Corporate Authority

The board of directors must determine, in good faith and for a proper purpose, that granting the security or guarantee is in the company’s interests, as required by Section 213 of the CA 2016.

The company’s constitution, existing financing documents, shareholders’ agreement, and licences should also be reviewed for any borrowing limits, negative pledges, and consent requirements.

Directors and Connected Persons

Section 225 of the CA 2016 also restricts a company – other than exempt private company – from guaranteeing or securing certain loans made to persons connected with its directors, subject to statutory exceptions.

Regulatory Consents

Certain assets cannot be charged, assigned or transferred without consent. In respect of land, state authority consent may be required to create security, and – where reserve land is involved – it would be subject to the restrictions applicable to such reserve land. In respect of licences, typically, security interest would be restricted.

Foreign Security Providers

Bank Negara Malaysia’s Foreign Exchange Policy Notices must be considered where the financing, guarantor, borrower or lender is non-resident or where the obligation is denominated in a foreign currency. Generally, Bank Negara Malaysia’s approval is required where lending or granting of security is not expressly allowed in its Foreign Exchange Policy Notices.

Lenders can conduct a search with CCM for registered company charges and obtain detailed charge information identifying the charge, amount, status, and charged assets. For land, searches at the relevant Land Registry or Land Office can be made and the title deed will record any interest registered or dealings endorsed on the title.

The typical forms of security are released after full repayment by a deed of discharge, release or reassignment, together with revocation of any power of attorney and return of title documents, share certificates, and other collateral.

As for land, a prescribed discharge form will be executed and takes effect upon registration at the relevant Land Registry or Land Office.

In relation to the CCM charge, a prescribed discharge form will also be required.

Discharge forms to be lodged with the CCM and registered with the Land Office would need to be presented within the timeframe as ascribed under the CA 2016 and the NLC respectively, and accompanied by the requisite registration fee. The discharge documents will also attract stamp duty.

Once an event of default has occurred, a secured lender may enforce its collateral. Security over accounts, shares and cash may generally be enforced through contractual arrangements such as setting-off, transfer or sale, if valid control and power of attorney arrangements exist. For security over land, an order for sale may be applied from the court to place the land for sale under auction. A debenture holder may appoint a receiver and manager if the instrument permits to step in and liquidate the assets of the company.

The security agent may enforce directly if appointed to hold the security and authorised by the transaction documents and may also commence winding-up proceedings against the company for the outstanding loans. For project documents, the security agent can exercise only the rights that the security provider itself possessed.

Malaysia courts generally uphold an express choice of foreign governing law, provided it is bona fide and does not evade mandatory domestic law or offend public policy. Where parties have agreed on an exclusive foreign jurisdiction clause, Malaysian courts will ordinarily give effect to it by granting a stay application. However, the party seeking to proceed in Malaysia bears the burden of showing exceptional circumstances amounting to “strong cause” why the exclusive jurisdiction clause should not be enforced.

Judgments from reciprocating countries may be registered and enforced in Malaysia without retrial of the merits under the Reciprocal Enforcement of Judgments Act 1958 (REJA), provided the requirements under the REJA have been complied with. Accordingly, a judgment from a non-reciprocating jurisdiction cannot be registered under the REJA, but may still be recognised and enforced by Malaysian courts through common-law action founded on the foreign judgment debt.

A foreign arbitral award may similarly be recognised and enforced by application to the High Court pursuant to Sections 38 and 39 of the Arbitration Act 2005. Enforcement may be refused only on specified grounds, including but not limited to the invalidity of the arbitration agreement, lack of proper notice, or public policy.

A foreign lender’s enforcement may be affected by Malaysian mandatory law rather than its foreign status. Key issues are whether the lending requires licensing, proper stamping and registration of security, and compliance with land requirements, foreign-exchange rules, sanctions, and tax rules. Unregistered company charges may be void against a liquidator and creditors, while unstamped documents affect admissibility as evidence. Land enforcement also depends on the relevant state regime and may restrict a foreign lender’s ability to acquire collateral at auction.

Foreign lenders are generally permitted to lend to Malaysian borrowers if the loan complies with Bank Negara Malaysia’s foreign-exchange rules and money-lending laws. A Malaysian borrower is allowed to borrow up to MYR100 million equivalent in a foreign currency from foreign lenders as ringgit borrowing is restricted from foreign lenders. Approval from Bank Negara Malaysia is required where the amount borrowed exceeds such limit.

The granting of security or guarantees are generally allowed, provided that the underlying borrowing and guarantee complies with the limits and requirements mentioned in 4.1 Restrictions on Foreign Lenders Granting Loans and that the security is properly perfected.

Malaysia generally maintains an open foreign investment regime, but the activity asset and regulatory licence determine the real limits. Certain regulated sectors or specific approvals may impose foreign-equity caps or local/Bumiputera participation requirements. Therefore, a sector-specific review is essential.

Generally, there are no restrictions preventing a foreign investor from transferring profits, returns and divestments from investments in Malaysia abroad in all foreign currencies.

Offshore foreign currency accounts are permitted, provided that it is within the limit permitted by the Central Bank of Malaysia. Otherwise, approval from the Central Bank would be required.

Depending on the project sector and the nature of the relevant agreements, additional submissions or consents may be required beyond stamping and security registration. By way of example, in a power project, the power purchase agreement would need to be submitted to the Energy Commission of Malaysia. The precise requirements are therefore driven by the project’s sector-specific approvals, the terms of its licences and project documents, and the security assets involved.

Licensing requirements – including any Bumiputera participation or equity conditions – will depend on the project’s sector and business activities, as well as the particular natural resources involved. A foreign investor’s acquisition of Malaysian land is subject to the NLC, applicable state authority requirements, and the Economic Planning Unit’s Guideline on the Acquisition of Properties. Construction activities may additionally require planning permission and development orders from the relevant local authority. For power generation projects, the project company will generally require a generation licence from the Energy Commission of Malaysia. Certain schemes also impose local ownership requirements – for example, under the Corporate Renewable Energy Supply Scheme (CRESS), a renewable energy developer must have at least 51% local ownership as a condition of its licence.

Malaysian law recognises agency and trust structures, both respectively governed by the Contracts Act 1950 and the Trustee Act 1949. Security may therefore be granted to a security agent or security trustee, which holds and enforces the security for the financier(s).

For land charges in Peninsular Malaysia, competing registered charges rank in the order in which they are registered at the relevant land registry. For other assets, priority commonly turns on the date of creation of the security and completion of the applicable perfection steps. A creditor whose security has not been properly perfected will generally rank with all other unsecured creditors. Section 517 of the CA 2016 provides the statutorily prescribed order of priority for unsecured debt. Creditors of the same priority class share pari passu where funds are insufficient to meet their claims.

Subordination and priority of claims may be contractually agreed in an intercreditor agreement, subordination agreement, security-sharing agreement, or common terms agreement. In Malaysian syndicated and project financings, it is common for junior creditors to agree not to receive payment until senior debt is paid, subject to agreed permitted payments. Such contractual provisions should continue to bind the participating creditors following the borrower’s insolvency, but they cannot override mandatory statutory priorities.

Depending on the project sector and the applicable regulatory regime, Bumiputera equity or local participation may apply. Certain licences, registrations or concessions might require the project company to be established, registered or recognised under Malaysian law. In practice, the project company is typically a private company limited by shares (Sendirian Berhad (Sdn Bhd)).

Malaysia offers three principal corporate rescue mechanisms – namely, a scheme of arrangement, a corporate voluntary arrangement (CVA), and judicial management.

The commencement of a restructuring process can temporarily prevent a lender from suing, winding up the borrower or enforcing security, but the effect differs by procedure.

Under a scheme of arrangement, filing a restraining order application under Section 368 of the CA 2016 triggers a temporary stay for up to two months (or until determination). Once the restraining order is granted, lenders are restrained from commencing legal proceedings or enforcing its security against the borrower without leave from court.

For a CVA, the filing of the requisite documents in court under Section 398 of the CA 2016 triggers a 28-day moratorium, which may be extended to a maximum of 60 days. Although a secured lender is not bound by an approved CVA unless it consents, Section 398A of the CA 2016 permits recovery of secured property if it meets the conditions stipulated.

During a judicial management, Section 410 of the CA 2016 generally prevents a lender from commencing or continuing proceedings, enforcing security, or pursuing a winding-up order against the company. If the court grants a judicial management order, Section 411 of the CA 2016 applies and any existing receiver and/or manager must step down, and pending winding-up applications are dismissed. While the order remains in force, creditors generally cannot wind up the company, appoint a receiver, sue, enforce judgments, enforce security, repossess goods, or transfer shares without the judicial manager or court’s permission. However, after notifying the judicial manager, a secured lender may enforce against movable assets pursuant to Section 411(5) of the CA 2016.

In a winding-up, a secured lender is entitled to realise its valid security and apply the proceeds towards the liabilities, subject to applicable statutory priorities and insolvency rule. For further details, see 5.4 Competing Security Interests and 6.3 Priority of Creditors.

In a winding-up, secured creditors would rank above the unsecured creditors and may realise the charged security created in its favour. Upon the security being exhausted, where there remains outstanding indebtedness, the secured creditors would then rank pari passu with the unsecured creditors in relation to the remaining assets of the company. From the company’s uncharged assets, the costs and expenses of the winding-up rank first, pursuant to Section 527(1)(a) of the CA 2016. Section 527 then gives statutory priority – ahead of other unsecured debts – to specified employee-related claims, workers’ compensation, accrued annual leave payments, etc.

A floating charge holder ranks behind the statutory preferential claims to the extent required by Section 527(4) of the CA 2016. Notably, specified employee claims and contribution claims may be paid from assets subject to a floating charge before the floating charge holder receives any distribution.

After secured claims, winding-up expenses, statutory preferential debts, and the applicable floating charge priority have been satisfied, ordinary unsecured creditors would rank pari passu and share the remaining assets equally.

Finally, shareholders receive a return only from any surplus remaining after the company’s liabilities have been fully discharged. Preference shareholders normally rank ahead of ordinary shareholders.

A lender’s main insolvency risk is that recently granted security, repayment or asset transfer may be unwound as an undue preference. Under Section 528 of the CA 2016, an act benefitting a lender (including payment for, transfer or delivery of goods) by a company unable to pay debts as they fall due is fraudulent and void if winding-up proceedings commence within six months. The exception is where the lender gave valuable consideration and had no actual notice of the company’s insolvency or relevant winding-up circumstances.

A guarantee is ordinarily an unsecured contractual obligation unless the guarantor separately grants valid security. Therefore, if the guarantor is insolvent, the lender’s guarantee claim shares pari passu with its other unsecured creditors.

Section 121 of the Insolvency Act 1967 expressly prohibits a bankruptcy order against any corporation, partnership, association or company registered under any Act dealing with companies.

General insurance and takaful covering project risks are generally subject to 8% service tax on the premium but exclusions may apply. Additionally, insurance policies are generally subject to stamp duty.

Insurance proceeds relating to project assets may generally be paid to foreign creditors. However, where the underlying foreign borrowing exceeds the applicable prudential limit set by Bank Negara Malaysia, the necessary approval must first be obtained.

Payments of principal to resident and non-resident lenders – and interest paid to a resident lender – are both generally not subject to withholding tax. However, interest paid to a non-resident lender may be subject to withholding tax at a rate of 15% or any other rate as prescribed under the double taxation agreement between Malaysia and the country where the non-resident payee is a tax resident.

The authors are not aware of any other taxes, duties, charges, or tax considerations relevant to lenders making loans to entities incorporated other than income tax and withholding tax.

Apart from withholding tax on interest paid to a non-resident lender, lenders can consider stamp duty, which may be payable on applicable financing documents and security documents.

Regarding corporate tax, resident and non-resident companies in Malaysia are generally taxed at 24%, subject to lower rates for resident companies with lower paid-up capital or gross income.

There are no laws limiting the amount of interest that can be charged other than late payment fees for Malaysian Islamic banks.

Project agreements are typically governed by Malaysian law, unless a foreign party is involved and requests another governing law, which in most cases will be English law. It is the parties’ commercial decision to agree on the same.

Malaysian law is typically used for financing agreements. However, where non-Malaysian assets are involved, the security documents may be governed by the relevant laws where the assets are situated.

Land matters, creation and enforcement of interests in assets registered in Malaysia, energy resources, and corporate matters are typically governed by domestic law.