MALAYSIA Law and Practice Contributed by: Shelina Razaly Wahi and Vincent Chan Siew Onn, Abdullah Chan & Co
1. Aircraft and Engine Purchase and Sale 1.1 Sales Agreements 1.1.1 Taxes/Duties Payable Upon Execution of the Sales Agreement Stamp duty is payable in Malaysia on instruments and not on transactions. An instrument is required to be stamped within 30 days of its execution. If an instru - ment is executed outside Malaysia, then it must be stamped within 30 days after the date an instrument is brought into Malaysia either physically or by any electronic means (including for example, by email). For contracts generally, documents that are not stamped are inadmissible in court as evidence. Stamp duty is payable on an aircraft or engine sale agreement on a nominal basis. If the contract is for the sale of an ownership interest in an entity, then a contract for the sale of shares is similarly subject to stamp duty on a nominal basis. Stamp duty is, in addition, payable on the bill of sale that transfers title to such aircraft or engine, and/or on a share transfer form, on an ad valorem basis, if the asset is located in Malaysia at the time of the sale or where a domestic party is party to such sale agreement. 1.1.2 Enforceability Against Domestic Parties The sale agreement does not need to be translated, certified, notarised or legalised to be enforceable against a domestic party. However, the sale agree - ment must be stamped with the Inland Revenue Board of Malaysia (IRBM) in order for the sale agreement to be admissible as evidence in court, including for example where there may need to be an enforcement proceeding against a domestic party. 1.2 Transfer of Ownership 1.2.1 Transferring Title A bill of sale may be used to transfer title to an air - craft or engine, and its wording may specify that all installed parts are included in the transfer of title. If the entity that owns the aircraft or engine remains the same, albeit with a change in the entity’s ownership/ shareholding, that is not separately recognised as a sale of such aircraft or engine itself.
1.2.2 Sales Governed by English or New York Law A bill of sale that is governed by English or New York Law is recognised to transfer title to an aircraft or engine. In order for the bill of sale to be recognised and enforceable in Malaysia, the bill of sale should be stamped with the applicable ad valorem stamp duty, and it must be attested and registered within seven clear days after its execution. 1.2.3 Enforceability Against Domestic Parties A bill of sale does not need to be translated, notarised or legalised to be enforceable against a domestic par - ty. However, the bill of sale must comply with the Bills of Sale Act 1950, will need to be stamped in order to be admissible as evidence in court, and will need to be registered accordingly. 1.2.4 Registration, Filing and/or Consent From Government Entities A bill of sale must comply with the required statutory form and should be registered once it is stamped. It shall be attested by an advocate and solicitor of the High Court, by a Magistrate or Registrar or Assistant Registrar of the High Court, or by a commissioner for oaths or a notary public. The estimated time for stamping a bill of sale is approximately two to four weeks; the estimated time for registering a bill of sale at the High Court of Malaya is approximately three to ten business days. 1.2.5 Taxes/Duties Payable Upon Execution of a Bill of Sale An ad valorem stamp duty is payable on a bill of sale, in accordance with the value of the asset being trans - ferred, if the sale occurs when the asset is in Malaysia or if the bill of sale was executed in Malaysia. If the sale is evidenced by a sale of the ownership interest in a company, then ad valorem stamp duty would be payable on the share transfer form. If the asset is over international waters or in transit to/from Malaysia at the time the title transfer takes place, then there is no transfer within the jurisdiction of Malaysia.
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