MALAYSIA Law and Practice Contributed by: Shelina Razaly Wahi and Vincent Chan Siew Onn, Abdullah Chan & Co
aircraft should be subject to a lien within Malaysia, and the aircraft is detained with the subject aircraft engines installed. In addition, Malaysia recognises a separate title/own - ership over aircraft engines pursuant to the Interna - tional Interests in Mobile Equipment Act 2006, if such ownership interests in the aircraft engines are regis - tered on the International Registry. CAAM does not itself maintain a registry of interests in aircraft engines. In practice, lessors and/or financiers with interests in particular/specific engines would obtain a charge and register such charge against the lessee pursuant to the Companies Act 2016, to put third parties on notice as to the existence of such charge. 2.2.5 Recognition of the Concepts of Trust/Trustee CAAM has recognised and has accepted the regis - tration of leases where one of the parties is an owner trustee, subject to such owner trustee being able to satisfy the statutory requirements for the registration of a lease. 2.3 Lease Registration 2.3.1 Notation of Owner’s/Lessor’s Interests on Aircraft Register The interests of the legal owner are noted on the Air - craft Register. Only the registered legal owner or a party named in the Irrevocable Deregistration Authori - sation (IDERA) may deregister an aircraft from or make changes in an aircraft’s registration details at the Air - craft Register. 2.3.2 Registration If the Owner Is Different From the Operator Malaysia operates an owner registry. The Aircraft Reg - ister will reflect the name of the legal owner as well as the name of the (Malaysian) aircraft operator. 2.3.3 Aircraft/Engine-Specific Registers An aircraft lease is registrable on the Aircraft Register. However, the Aircraft Register does not provide for the separate registration of leases of aircraft engines. 2.3.4 Registration of Leases With the Domestic Aircraft Registry The foreign owner of an aircraft may, if the aircraft is leased to a qualified person (as defined in the Civil
Aviation Act 1969), register the lease on the Aircraft Register. Such registration is a mandatory procedural/ administrative requirement if the aircraft is to be oper - ated by a Malaysian entity. A lessor’s interests would be registered only if the lessor were also the owner. Aircraft leases are not generally subject to any con - sent from any government entity. However, if a lessor entity is a Labuan entity (see 2.1.6 Licensing/Quali- fication of Lessors ), then the entry into each lease would be subject to the prior approval of the LFSA. The applicable form (CAAM/AW/7101-01) and sup - porting documents would need to be submitted to CAAM, in order to effect the registration of a lease in accordance with the Civil Aviation Regulations 2016 and the Civil Aviation Directive (CAD) 7101. 2.3.5 Requirements for a Lease to Be Valid and Registrable A lease does not need to be in a specific form, may be executed under hand and may be in the English lan - guage, with no requirements for a local law translation. There are no requirements for serving, certification, notarisation, or legalisation for the lease to be legal and valid under Malaysian law. However, the lease and other transaction documents would need to be stamped in order to be admissible as evidence in court. If any transaction documents contain a power of attorney, then the execution of that power of attor - ney needs to be attested and the power of attorney would need to be registered accordingly. 2.3.6 Taxes/Duties Payable for Registering a Lease There is no tax or duty that arises upon registering a lease. CAAM imposes a fee to register a lease on the Aircraft Register. 2.3.7 Registration of Aircraft in Alternative Countries Aircraft such as business jets that are based in Malay - sia, and which are operated as private aircraft and not on a commercial basis, are typically registered on the United States of America Federal Aviation Author - ity register or one of the European registers such as those of San Marino or Denmark. Commercial aircraft
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