CROSS-BORDER INSOLVENCY ACT 2026

This Act comes into operation on a date to be appointed by the Minister by notification in the Gazette.

Interpretation

the Official Receiver as defined in section 2 of the

Companies Act 2016 [Act 777];

a person appointed under the Companies Act 2016

to act in any of the following capacities:

liquidator or interim liquidator, whether in a compulsory or voluntary winding up;

a person approved under the Labuan Companies Act 1990

[Act 441] as an approved liquidator;

any other person appointed by the Court under subsection 6(2)

to act in a foreign State on behalf of any proceedings; or

any other such person or body recognized under any written law in Malaysia in a collective judicial or administrative proceedings in Malaysia, including interim proceedings, under the law relating to insolvency in which proceedings the property and affairs of the debtor are subject to control or supervision by the Court, for the purposes of reorganization or liquidation;

“debtor” means—

a corporation as defined in section 3 of the Companies

Act 2016 but does not include limited liability partnership and foreign limited liability partnership; or

a corporation as defined in section 2 of the Labuan

Companies Act 1990;

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“foreign proceedings” means collective judicial or administrative proceedings in a foreign State, including interim proceedings, under the law relating to insolvency in which proceedings the property and affairs of the debtor are subject to control or supervision by a foreign court, for the purposes of reorganization or liquidation;

“foreign non-main proceedings” means foreign proceedings other than foreign main proceedings taking place in a foreign State where a debtor has an establishment;

“foreign main proceedings” means foreign proceedings taking place in a foreign State where the debtor has its centre of main interests;

“Malaysian insolvency law” means—

this Act;

subdivisions 2 and 3 of Division 7 of Part III, Division 8

of Part III, and Parts IV and V of the Companies Act 2016;

sections 74, 127, 130zb, 131, 131a, 151c and 151d of the Labuan Companies Act 1990;

any subsidiary legislation made under this Act, the Companies Act 2016, the Labuan Companies Act 1990

and the Courts of Judicature Act 1964 [Act 91]; and

the common law of Malaysia relating to or in connection with any provision of this Act, the Companies Act 2016, the Labuan Companies Act 1990 and the Courts of Judicature Act 1964 or any provision of any subsidiary legislation made under this Act, the Companies

Act 2016, the Labuan Companies Act 1990 and the Courts of Judicature Act 1964;

“foreign representative” means a person or body appointed, including a person or body appointed on an interim basis, and authorized in foreign proceedings to administer the reorganization or liquidation of a debtor’s property or affairs or to act as a representative of the foreign proceedings.

In interpreting this Act, regard shall be had to its international origins and to the need to promote uniformity in its application and the observance of good faith.

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Application

assistance is sought in Malaysia by a foreign court or foreign representative in connection with foreign proceedings;

assistance is sought in a foreign State in connection with proceedings under Malaysian insolvency law;

foreign proceedings and proceedings under Malaysian insolvency law in respect of the same debtor are taking place concurrently; or

creditors or other interested persons in a foreign State have an interest in applying for the commencement of, or participating in, proceedings under Malaysian insolvency law.

This Act shall not apply to—

Notwithstanding any provision of this Act, the Court shall not recognize any foreign proceedings, grant any relief, or modify any relief that has already been granted, or provide any cooperation or coordination under this Act, if and to the extent that such recognition, relief, modified relief, cooperation or coordination would, in the case of proceedings under any written law be prohibited by or interfere with or be inconsistent with the provisions in relation to restrictions specified in Part II of the Schedule.

Authorization of Malaysian insolvency office-holder to act in foreign State

The Court may, upon application, appoint any other person to act in a foreign State on behalf of proceedings under Malaysian insolvency law as permitted by the applicable law of the foreign

State.

Public policy exception

A foreign representative may appear in person or may be represented by an advocate for the purposes of any application made under this Act.

In this section, “advocate” means any person entitled to practice as an advocate or as a solicitor or as an advocate and solicitor under any law in any part of Malaysia.

Limited jurisdiction

Subsection (1) shall not affect the ranking of claims in proceedings under Malaysian insolvency law, or the exclusion of foreign tax claims, social security claims or claims for employee’s superannuation or provident funds or claims under any scheme of superannuation from such proceedings.

Notwithstanding subsection (2), the claims of a foreign creditor shall not be ranked lower than general unsecured creditors solely by reason that the creditor is a foreign creditor.

Notification to foreign creditor of proceedings under Malaysian insolvency law

The Court may make an order requiring that reasonable steps be taken to notify any foreign creditor whose address is not yet known.

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The notification referred to in subsection (1) shall be given to the foreign creditors individually, unless the Court is satisfied that, under the circumstances—

Where notification of a right to file a claim is to be given to foreign creditors, such notification shall—

An application for recognition of foreign proceedings shall be accompanied by—

An application for recognition of foreign proceedings shall also be accompanied by a statement identifying all foreign proceedings and proceedings under Malaysian insolvency law in respect of the debtor that are known to the foreign representative.

The foreign representative shall provide the Court with a translation into English language text of a document submitted other than in the English language in support of the application for recognition of foreign proceedings and the translation shall be accompanied by a certificate from the person who translated the document setting out that the translation is accurate and true.

Presumptions of recognition

The Court may presume that the document submitted in support of the application for recognition of foreign proceedings is authentic, whether or not the document has been legalized.

In the absence of proof to the contrary, the debtor’s place of registered office is presumed to be the debtor’s centre of main interests.

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Decision to recognize foreign proceedings

Subject to section 7, the Court shall recognize foreign proceedings by making a recognition order if—

The foreign proceedings shall be recognized as—

Nothing in this section, section 15, 16 or 18 shall prevent the modification or termination of a recognition order, if it is shown that the grounds for granting the recognition order were wholly or partly lacking at the time the recognition was granted or have wholly or partly ceased to exist.

The Court may, on the application of a foreign representative, a person affected by the recognition, or on its own motion, modify or terminate a recognition order, either wholly or for a limited period, on such conditions as the Court thinks fit.

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Subsequent information

of any substantial change in the status of the recognized foreign proceedings or the status of the foreign representative’s appointment; and

of any other foreign proceedings or proceedings under

Malaysian insolvency law regarding the same debtor that comes to the knowledge of the foreign representative.

Relief that may be granted upon filing of application for recognition of foreign proceedings

staying any execution against the property of the debtor;

entrusting the administration or realization of whole or any part of the property of the debtor located in Malaysia to the foreign representative or to a Malaysian insolvency office-holder, for the purpose of protecting and preserving the value of the property which, by its nature or due to other circumstances, is perishable, susceptible to devaluation or is otherwise in jeopardy; and

granting any relief referred to in paragraph 21(1)(c), (d)

or (g).

Any relief granted under subsection (1) by the Court shall be consistent with any order that has been made or may be made under this Act, the Companies Act 2016, the Labuan Companies

Act 1990 or any other written laws.

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Unless extended under paragraph 21(1)(f), the relief granted under subsection (1) shall terminate upon the determination of the application for recognition of foreign proceedings.

The Court may refuse to grant any relief under this section if such relief would interfere with the administration of foreign main proceedings.

Effects of recognition of foreign main proceedings

the commencement or continuation of any individual action or proceedings in relation to the property, rights, obligations or liabilities of the debtor shall be stayed;

any execution against the property of the debtor shall be stayed; and

any right to transfer, encumber or otherwise dispose of any property of the debtor shall be suspended.

The stay and suspension referred to in subsection (1) shall—

Without prejudice to subsection (2), the stay and suspension referred to in subsection (1) shall not affect the rights—

Paragraph (1)(a) shall not affect the rights—

Subsection (1) shall not affect the rights of any person to apply for, or otherwise initiate, the commencement of proceedings under Malaysian insolvency law, or the rights to file a claim in such proceedings.

In addition to and without prejudice to the powers of the

Court under subsection (2), the Court may, on the application of the foreign representative or any person affected by the stay and suspension referred to in subsection (1), or on its own motion, modify or terminate such stay and suspension or any part of it, either wholly or for a limited period, on such conditions as the

Court thinks fit.

In this section, “security” means any charge, lien, mortgage, pledge, hypothecation or any other security recognized by law including any security accepted in relation to matters of admiralty in Malaysia.

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Relief that may be granted upon recognition of foreign proceedings

staying the commencement of or continuation of any individual action or proceedings concerning the property, rights, obligations or liabilities of the debtor, to the extent such action or proceedings have not been stayed under paragraph 20(1)(a);

staying any execution against the property of the debtor, to the extent such execution has not been stayed under paragraph 20(1)(b);

suspending the rights to transfer, encumber or otherwise dispose of any property of the debtor, to the extent such right has not been suspended under paragraph 20(1)(c);

for the examination of witnesses, the taking of evidence or the delivery or production of information concerning the property, affairs, rights, obligations or liabilities of the debtor;

entrusting the administration or realization of the whole or any part of the property of the debtor located in Malaysia to the foreign representative or such other person as the

Court may appoint, for the purpose of protecting and preserving the value of such property;

extending any relief granted under subsection 19(1); and

that may be available to a Malaysian insolvency office-holder under the laws of Malaysia.

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If relief is granted under paragraph (1)(e) to a foreign representative or such other person as the Court may appoint, the Court may, on the application of the foreign representative or such other person as the Court may appoint, where the distribution applied for involves the transfer of any property of the debtor to any person outside Malaysia, the foreign representative or such other person as the Court may appoint shall first obtain leave of the Court, and such leave shall only be granted if the Court is satisfied that the interests of creditors in Malaysia are adequately protected.

For the purposes of subsection (2), before making any order for the transfer of any property of the debtor to any person outside

Malaysia, the Court shall ensure that the foreign representative or such other person as the Court may appoint has certified or provided a guarantee to the Court that the claim of creditors in Malaysia, whose debts do not exceed the threshold as prescribed by the Minister by order published in the Gazette, have been met and satisfied from the property applied to be so transferred.

In granting relief under subsection (1) to a foreign representative of foreign non-main proceedings, the Court shall be satisfied that such relief relates to—

Nothing in paragraphs (1)(a), (b), (c), (e) and (g), and subsection (2) shall affect the rights to commence or continue any criminal proceedings or any action or proceedings by any person or body having regulatory, supervisory, investigative or enforcement functions of a public nature, where such action or proceedings is brought in the exercise of those functions.

For the purposes of this section, the Minister, after consultation with the Minister of Finance and the Minister charged with the responsibility for companies, may amend the threshold referred to in subsection (3), by order published in the Gazette.

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Protection of creditors and other interested persons

The Court may impose such conditions on the grant of relief under section 19 or 21 as the Court deems appropriate, including requiring the foreign representative to furnish security for the due performance of his functions.

The Court may, on the application of the foreign representative or any person affected by the relief granted under section 19

or 21, or on its own motion, modify or terminate the relief.

Actions to avoid acts detrimental to creditors

Where a foreign representative makes such an application under subsection (1), the provisions of the Companies Act 2016

and the Labuan Companies Act 1990 as referred to in subsection (1)

shall apply—

For the purposes of this section, the applicable modifications are as follows:

For the purposes of subsection (3), the date of the opening of the relevant foreign proceedings shall be determined in accordance with the law of the foreign State where the foreign proceedings take place, including any rule of law under which the foreign proceedings are deemed to have been opened at an earlier date.

Where the foreign proceedings are foreign non-main proceedings, the Court shall be satisfied that the application under this section relates to property which, under the laws of Malaysia, should be administered in the foreign non-main proceedings.

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Where, at the time the application is filed, proceedings in respect of the debtor are pending under Malaysian insolvency law, the foreign representative shall not make an application under this section without the leave of the Court.

Upon granting an order in relation to the application under this section, the Court may give such directions regarding the distribution of any proceeds of the claim by the foreign representative, as it thinks fit, to ensure that the interests of creditors in Malaysia are adequately protected.

Nothing in this section shall affect the rights of a Malaysian insolvency office-holder to make any application under, or in connection with, any of the provisions specified in subsection (1).

Subsection (1) shall not apply in respect of any preference given, floating charge created, alienation, assignment made, or other transaction entered into before the date of the coming into operation of this Act.

Intervention by foreign representative in proceedings in Malaysia

The Court is entitled to communicate directly with, or request information or assistance directly from, foreign courts or foreign representatives.

Cooperation and direct communication between Malaysian insolvency office-holder and foreign courts or foreign representatives

The Malaysian insolvency office-holder is entitled, in the exercise of his functions under the laws of Malaysia, and subject to the supervision of the Court, to communicate directly with foreign courts or foreign representatives.

Forms of cooperation

the appointment of a person to act under the direction of the Court;

communication of information by any means as the Court deems appropriate;

coordination of the administration and supervision of the property and affairs of the debtor;

approval or implementation of any agreement relating to the coordination of proceedings by the Court; and

coordination of concurrent proceedings regarding the same debtor.

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to property that is located in Malaysia; and

to the extent necessary to give effect to cooperation and coordination under sections 25, 26 and 27, to other property of the debtor that under the laws of Malaysia, should be administered in those proceedings.

Coordination of proceedings under Malaysian insolvency law and foreign proceedings

when the proceedings in Malaysia are taking place at the time the application for recognition of foreign proceedings is filed—

any relief granted under section 19 or 21 shall be consistent with the proceedings in Malaysia;

and

when the proceedings in Malaysia are commenced after the filing of an application for recognition of foreign proceedings or after recognition is granted—

any relief granted which is in effect under section 19

or 21 shall be reviewed by the Court and, if inconsistent with the proceedings in Malaysia, shall be modified or set aside;

in granting, extending or modifying any relief given to a foreign representative of foreign non-main proceedings, the Court shall be satisfied that the relief relates to—

property that, under the laws of Malaysia, should be administered in the foreign non-main proceedings; or

any relief granted under section 19 or 21 to a representative of foreign non-main proceedings after recognition of foreign main proceedings shall be consistent with the foreign main proceedings;

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if the foreign main proceedings are recognized after the filing of an application for recognition of foreign non-main proceedings, any relief granted under section 19

or 21 shall be reviewed by the Court and shall be modified or set aside if inconsistent with the foreign main proceedings; and

if, after recognition of foreign non-main proceedings, another foreign non-main proceedings are recognized, the Court may grant, modify or set aside any relief for the purpose of facilitating coordination of those proceedings.

Presumption of insolvency based on recognition of foreign main proceedings

Upon publication of the order referred to in subsection (1), the Schedule as amended shall come into full force and effect and shall be deemed to be part of this Act from the date of such publication or from such later date as may be specified in the order.

Saving

Any cross-border insolvency proceedings or application relating to cross-border insolvency commenced before the date of coming into operation of this Act shall continue to be dealt with in accordance with the law in force immediately before the date of coming into operation of this Act.

Any order, direction, decision, act or proceedings made, given, undertaken or done under any written law relating to cross-border insolvency before the date of coming into operation of this Act, and any right, obligation or liability accrued thereunder, shall, in so far as it is not inconsistent with the provisions of this Act, continue to remain valid and enforceable.

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Nothing in this Act shall affect the rights and remedies of any creditor arising or accrued under the law applicable before the date of coming into operation of this Act, unless otherwise agreed by the relevant parties or directed by the Court under this Act.