As the reflective days of Ramadhan transition into the celebratory spirit of Syawal, the theme of silaturrahim (maintaining family ties) takes center stage. There is a profound piece of wisdom from Prophet Muhammad (PBUH) that sits at the very heart of this: “Whoever would like his provision (rezeki) to be increased and his lifespan to be extended, let him maintain the ties of kinship.” (Sahih Al-Bukhari).

It is a powerful reminder that true wealth and business blessings are inherently tied to family harmony. Yet, from the vantage point of an Intellectual Property litigator, this season also highlights how tragically fragile those ties become when valuable intangible assets and the pursuit of that very wealth are involved.

We tend to picture IP litigation as corporate warfare between rival conglomerates. In reality, some of the most complex, protracted, and fiercely contested battles over trademarks and copyrights happen across the family dining table.

The “Grandfather’s Legacy” Fallacy

A common scenario in our practice involves the generational family business. It usually starts with a grandfather founding a modest enterprise. The second generation maintains it, but eventually, a grandchild from the third generation steps up. They modernize the operations, register the IP rights under a newly formed corporate vehicle, and turn the brand into a highly profitable venture.

Suddenly, extended family members want in. Cousins who previously showed no interest often rely on a dangerous legal fallacy: the assumption that biological descent gives them an inherent right to use a brand founded by a shared ancestor. They start rival businesses using identical or confusingly similar marks, forgetting that the trademark is now a legally registered corporate asset.

Malaysian courts have seen this repeatedly. In the battle between Original Penang Kayu Nasi Kandar and Restoran Kayu Nasi Kandar over word “Kayu” in the case of Burukan bin Mohamed & Ors v Sirajudin bin Y Mohamed Mydin & Ors [2012] MLJU 118, the court had to untangle the complexities and confusion arising from family members leveraging a shared legacy under a loosely drafted co-existence agreement.

Similarly, the Federal Court in Low Chi Yong v Low Chi Hong & Anor [2018] 1 CLJ 287 of a bitter dispute between brothers over the ‘Reynox’ trademark, had to determine the legal boundaries of verbal “family permission.” The apex court’s ruling served as a clear reminder that without formal licensing agreements, the line between shared family heritage and exclusive statutory rights quickly disappears.

When the Marriage Ends, Who Owns the Brand?

If generational rivalries are complicated, IP litigation between ex-spouses is often scorched-earth. When a marriage collapses, the fight over shared business assets frequently centers on brand custody.

We frequently see IP claims used as leverage during divorce proceedings. In one recent matter, a bitter separation led to an ex-spouse attempting to claim joint ownership of a highly successful trademark registered solely to the founder. It took multiple injunctions and an appeal before a mediated settlement secured the mark for the founder’s corporate use, while placing the long-term asset in trust for their children.

In other scenarios, a spouse might register a trademark personally, but the business operates under a jointly owned company. Post-divorce, this creates an intricate battle over whether the individual holds the trademark on trust for the company or retains exclusive rights to license it. And as the heavily reported High Court case of Syarikat Faiza Sdn Bhd v Faiz Rice Sdn Bhd [2017] 1 LNS 1581 demonstrated, IP battles can escalate even between a mother and her own son.

IP as Matrimonial Property (Harta Sepencarian)

This brings us to a fascinating, underexplored frontier in Malaysian jurisprudence which is the intersection of IP rights and Islamic family law. While the Syariah Courts routinely divide physical assets like real estate or vehicles upon divorce, Intellectual Property is frequently overlooked.

From a statutory standpoint, both Section 62 of the Trademarks Act 2019 and Section 27 of the Copyright Act 1987 explicitly recognize registered trademarks and copyrights as movable property. They are intangible assets with distinct commercial value. If a brand’s valuation skyrockets during the subsistence of a marriage, a compelling argument exists. Even if the mark is registered entirely under one name, the ex-spouse may rightfully claim a portion of its commercial value, royalties, or licensing fees as harta sepencarian (jointly acquired matrimonial property).

As our economy shifts heavily toward digital and brand assets, IP lawyers and family law practitioners must increasingly bridge this gap.

The Spirit of Settlement

The financial cost of IP litigation is heavy, but in family disputes, the emotional damage is permanent. Public court battles erode consumer trust and destroy the very silaturrahim we reflect upon during Ramadhan and celebrate during Syawal. This is why mediation is often the most strategic route. It allows families to craft co-existence agreements or delayed IP transfers that strict judicial rulings cannot offer.

The ultimate lesson here is proactive protection. The law dictates who owns a logo, but it cannot fix family grievances. To protect both the business and family ties, founders must separate emotion from corporate governance. Register trademarks early, document ownership explicitly, and formalize licenses even among siblings.

As we seek forgiveness in these final days of Ramadhan and prepare to celebrate Syawal, remember this: a trademark certificate secures your commercial rights, but clear corporate governance and a forgiving heart preserve both your rezeki and your family’s peace of mind.

Written by:
Ahmad Hafiz Zubir hafiz.zubir@azmilaw.com

Corporate Communications
Azmi & Associates
13 March 2026

Introduction

The EU AI Act defines Generative AI as “foundation models used in AI systems specifically intended to generate, with varying levels of autonomy, content such as complex text, images, audio, or video.” (Art. 28b (4) AI Act). Recent advancements, such as multi-modal systems capable of processing and generating different forms of content within a single framework, demonstrate that generative AI is no longer an experimental technology confined to specialist environments. Instead, it has become an accessible and widely used tool in everyday creative and commercial activities.

This technological shift has renewed a fundamental legal question: to what extent does copyright law apply to works produced by, or with the assistance of, artificial intelligence? Traditional copyright doctrines of authorship and originality were developed on the assumption that creative works are the result of human intellectual effort. The growing autonomy of generative AI systems challenges this assumption and places pressure on existing legal frameworks.

Unlike conventional software, these systems may operate with minimal human intervention, raising complex issues concerning creative control, ownership, and legal responsibility. This article focuses on generative AI outputs and examines how different legal systems distinguish between AI-assisted works and fully autonomous AI-generated content, particularly in relation to authorship and copyright protection.

Different jurisdictions have responded to these challenges in markedly different ways. This article examines three contrasting approaches: Italy’s reaffirmation of human authorship, Ukraine’s introduction of a sui generis regime for AI-generated outputs, and China’s evolving judicial treatment of AI-assisted creativity.

The Italian Approach: Reaffirming Human Authorship

Italy is the first country to adopt a law on the protection of AI (Law 132/2025), which came into force on 10 October 2025. The legislation is based on and integrates EU Regulation 2024/1869, adopted on 13 June 2024. Italy has addressed the copyright implications of artificial intelligence through targeted amendments introduced by Article 25 of the Italian Artificial Intelligence Law. Section IV of the Italian AI Law contains only this provision, which makes two significant amendments to Law No. 633 of 1941, Italy’s longstanding Copyright Act (Legge sul Diritto d’Autore, “LDA”). These amendments are aimed at responding to the growing challenges posed by AI technologies while preserving the traditional foundations of copyright law.

The recent law introduces amendments to Italian Copyright Law, whereby Article 1 now reads as follows:

“Works of ‘human’ intellectual creation of a creative nature are protected under this law, including those belonging to literature, music, figurative arts, architecture, theatre, and cinematography, regardless of the mode or form of expression, even when created with the aid of artificial intelligence tools, provided they are the result of the author’s intellectual effort.”

This amendment expressly confirms that copyright protection extends to works created with the assistance of AI systems, so long as the work remains the product of a creative and original human intellectual contribution. At the same time, it implicitly excludes fully autonomous AI-generated outputs from copyright protection, as such outputs lack the necessary human intellectual effort.

Under this approach, AI may function as a creative tool, but copyright subsists only where a human author exercises meaningful creative control. Outputs generated entirely by AI systems without significant human involvement fall outside the scope of copyright protection. Italy therefore firmly rejects AI authorship and reinforces the traditional link between copyright and human intellectual effort.

Ukraine’s Sui Generis Regime for AI-Generated Outputs

In contrast to Italy’s human-centric approach, Ukraine has adopted a more innovative legislative solution. In 2022, Ukraine amended its Law on Copyright and Related Rights to introduce a sui generis form of protection specifically designed to regulate outputs generated without human involvement.

The purpose of this reform is to address a legal gap by providing protection for AI-generated outputs that do not satisfy traditional copyright requirements. Under Ukrainian law, such outputs are classified as non-original objects generated by a computer program. For the protection of an AI-generated output, Art. 33(1) of the Ukrainian Copyright Law provides for two criteria: firstly, it is an object that differs from existing similar objects; secondly, it is formed as a result of the functioning of a computer program without the direct participation of an individual in the formation of this object. At the same time, works created by humans using computer technologies are expressly excluded from this category and remain protected under ordinary copyright law.

Sui generis protection lasts 25 years from 1 January of the year following creation and covers only economic rights, as AI-generated outputs are not recognised as “works” and do not attract moral rights. Rights may vest in parties connected to the AI system, such as the initiator, developer, or licensee. Protection applies where the output is novel, automatically generated by software, and created without human creative input beyond activation.

This regime ensures legal certainty for commercially valuable AI-generated content without redefining authorship, supplementing traditional copyright law with a tailored mechanism for automated creation.

Judicial Approaches in China

China on the other hand offers a contrasting model, relying primarily on judicial interpretation rather than legislative reform. Chinese courts have adopted a pragmatic, case-by-case approach that focuses on the extent of human intellectual contribution involved in the creation of AI-generated outputs.

In Li Yunkai v. Liu Yuanchun (2023) Jing 0491 Min Chu No. 11279 (2023), the Beijing Internet Court held that an AI-generated image produced using Stable Diffusion qualified for copyright protection. The court applied four factors, assessing whether the output fell within the fields of literature, art, or science, possessed originality, was expressed in a tangible form, and resulted from intellectual achievement.

The court held that the plaintiff’s active design choices through prompts, layout, composition, and iterative refinements demonstrated sufficient human creativity to confer originality. While AI systems and developers were not recognised as authors, the plaintiff was deemed the author due to his creative control over the image-generation process. This reasoning was later reinforced by the Changshu People’s Court in 2025, further confirming that users who exercise deliberate and creative control over AI outputs may qualify for authorship. Chinese courts have also emphasised transparency and good faith disclosure of AI usage, reflecting an approach that seeks to balance copyright protection with technological innovation.

Conclusion

Italy, Ukraine, and China adopt different approaches but share one principle: AI systems are not recognised as legal authors, and copyright protection depends on human intellectual contribution. Italy excludes fully autonomous AI outputs, Ukraine introduces a sui generis regime for non-original AI content, and China recognises copyright in AI-assisted works where users exercise meaningful creative control.

These divergent approaches reflect the lack of international harmonisation and differing policy priorities. As generative AI becomes more autonomous and widespread, copyright law will need clearer standards and greater transparency to remain effective and relevant.

References:

• Lavagnini, S. (2025, December 5). Italy adopted the first national law on artificial intelligence. AIPPI. https://www.aippi.org/news/italy-adopted-the-first-national-law-on-artificial-intelligence/.

• Mayidanyk, L. (2021). Artificial intelligence and sui generis right: A perspective for copyright of Ukraine? Access to Justice in Eastern Europe, 3(11), 144–154. https://doi.org/10.33327/AJEE-18-4.3-n000076.

• Lai, S., Lim, D., Shi, L., & Tay, J. (2021). Legal implications – Beijing Internet Court grants copyright protection to AI-generated artwork. Allen & Gledhill LLP. https://law.nus.edu.sg/trail/legal-implications-beijing-internetcourt-copyright/#_edn1.

Written by:

Ahmad Hafiz Zubir hafiz.zubir@azmilaw.com
Nur Alya Azahan nuralya.azahan@azmilaw.com

Corporate Communications
Azmi & Associates
23 February 2026

Introduction

When one thinks of Penang, they may think of our world-famous cuisine, steeped in centuries of heritage from the melting pot of cultures that is Pulau Mutiara. Many iconic brands were born in the Pearl of the East: including the famous corn-in-a-cup franchise Nelson’s, various nasi kandar franchises including Pelita Nasi Kandar, LC Restaurant (more commonly known as “Line Clear”) and the heritage-rich Penang Road Famous Teochew Chendul. Or you may think of the bustling economy of Penang, as the primary financial, industrial and manufacturing hub of the northern region of Malaysia – with skyscrapers and bustling industrial zones housing both major global brands such as Cisco Systems and Intel as well as homegrown Penang companies, especially from the manufacturing and hi-tech sectors. With big business from brands comes the need to employ a ‘fortress’ strategy, registering as many trademarks as possible to lock down their exclusive rights to their brands and products to build a comprehensive brand defence. As home to over 350 multinational corporations (“MNCs”) and over 3,000 small and medium-sized enterprises (“SMEs”), Penang has also earned a new nickname – the ‘Silicon Valley of the East’.

With this rapid development comes the need to safeguard brand protection via trademark and its associated legal protection, for a brand is indeed a company’s most valuable asset as forming their core identity and the brand’s exclusivity. The pertinent question is: how can trademarks contribute to protecting Penang’s iconic brands?

Current Situation in Penang on Trademarks

First and foremost, many startups continue to fall prey to the trap of assuming that registration of SSM affirms them automatic protection of their brand.

A common misconception is that registration of SSM automatically protects your brand when that is not the case; SSM registration serves only to incorporate your business for legal and operational purposes and does not automatically register its trademark.¹ In fact, there often occurs instances where a business rips off part of another business’s brand and identity to attract customers and profit based on the unauthorized usage of their brand; known as ‘the tort of passing off’².

In Pelita Samudra Pertama (M) Sdn Bhd v Venkatasamy a/l Sumathiri,³ the respondent passed off the appellant’s (the owner company of Pelita Nasi Kandar, founded in Penang) PELITA trademark, including its name and its signature oil lamp logo to sell their curry powders and registered their own trademark – as if the sold curry powders were the exact same used in Pelita Nasi Kandar restaurants. The High Court held the respondent liable for passing off the appellant’s brand as their own. The fact that the respondent filed their trademark first before the appellant, despite the latter being the owner of the actual brand, shows the startling reality that protecting your legal brand is only possible via registered trademark.

The Sword & Shield Mechanism of Trademark Protection

Trademarking your brand is like granting yourself a sword-and-shield to defend your brand. Under the Trademarks Act 2019 (the “Act”), trademark protection is available not only to traditional marks (e.g. words, logos) but also extends to non-traditional marks such as scent, sound and colour – in line with Malaysia’s accession to and ratification of the Madrid Protocol in 2019.⁴

This greatly expands the possibility of trademarking your products. For example, perfume manufacturers can now trademark their perfume’s signature scent, provided that there is a graphic to represent said scent.

The shield refers to the actual trademark protection. Trademarks can be registered with the Intellectual Property Corporation of Malaysia (“MyIPO”) every 10 years under Section 17 of the Act for the course of trade and can be perpetually renewed, as long as the trademarked products are distinctive and used for trade purposes. To qualify for trademark protection under Section 3(1) of the Act, the product to be trademarked must be a sign that is distinctive from other brands and can be graphically seen.

However, Section 23(1) provides restrictions to trademark registration as the Registrar of Trademarks can absolutely refuse to register trademarks if the signs or trademarks are:

(a) incapable of being graphically represented;

(b) devoid of any distinctive character (eg: Nasi Kandar Pelita name trademark is only for its full name and ‘Pelita’, not ‘nasi kandar’ per se);

(c) mere description of products (eg: “100 Pack” for tissue boxes); or

(d) generic terms in the market (eg: “Kopitiam” for coffee shop, unlike the arbitrary “Apple” for tech products).

Brands focus on fortifying their legal rights, by trademarking every facet of their branding from company and product names to logos and even non-traditional marks, such as sounds and scent. For example, Intel registered their trademarks for not only their own logo and name, but also their products’ typeface and branding, including the Intel Atom processor.

Thus, a good way to ensure that your brand and products can be registered with MyIPO for trademarks from a Penang perspective is to lean heavily on your signature products and its heritage with unique names; exemplified by Penang Road Famous Teochew Chendul, now operating in Taiwan and with registered trademarks in Australia.

By contrast, the ‘sword’ refers to actual enforcement of your exclusive rights to your trademark. A shield is useless without a sword and to defend your brand from potential infringements of copycats in the market, there are two methods to defend your brand: filing a civil action for trademark infringement if your trademark is registered or suing the infringing entity for the tort of passing off your unregistered trademark.

A trademark can be registered at MyIPO between RM950.00 and RM1,100.00 minimum, depending on whether the goods to be trademarked fall within the classified classes of goods and services pre-approved by MyIPO.⁵ Furthermore, entities may also opt to also expand their trademark protection internationally for over 131 countries in one go via MyIPO by filing the same basic mark under the Madrid international trademark system. The advantage is that not only is your trademark protected worldwide, it also makes it easier for courts to decide in your favour if your registered trademark is infringed, since it is accepted at face value (prima facie) as proof of your rights towards your trademark.

If your trademark is unregistered and infringed by other entities, you can still enforce your rights via IP-specialist attorneys to file an action against the infringing entity for the ‘tort of passing off’, where you can argue that the entity passed off your branding as their own. However, it is more difficult to prove and expensive to carry out, as your attorney must prove that you have a reputation (goodwill) attached to your trademarked goods, misrepresentation by the infringing entities, and the damages caused to your business as a result (such as reduced profits from loss of customers). Furthermore, the ‘First-to-Use’ nature of trademark registration means that even if your brand is the real deal, copycats who register their trademarks first will profit from better legal protection over their products even if they passed off your brand as their own, as seen in the Pelita Nasi Kandar case where the copycat registered their trademarks first before the original company itself.

This table summarises the characteristics of a registered and unregistered trademark:

Protecting Your Trademark in the Internet Era

Trademark infringement can occur even with the biggest brands online, especially with the rise of e-commerce and the lucrative value of domain names. A blatant form of trademark infringement comes in the form of cybersquatting, an act of registering a domain with someone else’s trademark to profit from the usage of their trademark. In Petronas & Ors v Khoo Nee Kiong,⁶ an individual registered a website under the domain ‘petronasgas.com’ with the intention to charge fees for the licensing domain to Petronas themselves, who sued the individual for trademark infringement and the tort of passing off. The High Court held the individual liable as he had fraudulently tried to deceive the public by using the Petronas trademark that redirected to his own website. With the rise of generative artificial intelligence (AI) and frequent complaints about potential trademark infringement, it is critical for corporations and businesses to secure exclusive legal rights to your branding by registering your trademarks with MyIPO.

Conclusion

To conclude, trademark registration is essential in protecting your brand, as your biggest asset in navigating Penang’s competitive business market. In Penang’s crowded and competitive market, your goodwill is the pearl you cannot afford to lose to stand out in the Pearl of the East.

Thus, equipping your enterprise with the shield from trademark registration and enforcement of your exclusive rights to your trademarks is highly recommended for commercial purposes. It is a direct and necessary investment in protecting your market share, your reputation, and the long-term commercial viability of your enterprise.

1. Trademark Registration Malaysia, “FAQs” <https://registertrademark.com.my/faqs/> accessed 13 November 2025.
2. Ramaiah, Angayar Kanni. “Innovation, Intellectual Property Rights and Competition Law in Malaysia.” South East Asia Journal of Contemporary Business, Economics and Law 14 (2017): 60-69.
3. [2012] 6 MLJ 114.
4. WIPO, “Malaysia Joins the Madrid System” (27 September 2019) https://www.wipo.int/en/web/madrid-system/w/news/2019/news_0027.
5. MyIPO, “Applying for a Trademark” https://www.myipo.gov.my/applying-for-a-trademark accessed 13 November 2025.
6. [2003] 4 CLJ 303.

Written by:

Mohamad Redzuan Idrus general@azmilaw.com
Zarriff Iman Nafidz Zahril Anwar zarriffiman@azmilaw.com

Corporate Communications
Azmi & Associates
19 February 2026

During the COVID-19 pandemic, Johor’s property market experienced a significant downturn. However, with the reopening of borders and the introduction of visa-free travel between Malaysia and China, the market particularly in Johor Bahru has shown strong signs of recovery and renewed investor interest. The launch of the Johor–Singapore Special Economic Zone (“JS-SEZ”) further strengthens its appeal by promoting integrated economic activity and seamless cross-border collaboration. This article examines the JS-SEZ in Iskandar Puteri and explores how stakeholders can benefit from the Private Lease Scheme, viewed through both legal and economic lenses.

Introduction

Iskandar Puteri is one of the five flagship zones under the Iskandar Malaysia development corridor. Iskandar Puteri offered large, undeveloped parcels which are suitable for development. Located within the special economic zone, there are benefits of tax and investment incentives and the non-restriction on foreign property ownership in selected areas. Medini which is one of the areas under local governance of Majlis Bandaraya Iskandar Puteri stretches across 2,230 acres (about 902 hectares) within Iskandar Puteri, is envisaged as the central business district of Iskandar Malaysia by 2030.¹

The enactment of the Iskandar Regional Development Authority Act 2007 aims to establish and govern the Iskandar Regional Development Authority (“IRDA”). Its primary purpose is to provide the legal and administrative framework for the direction, policies, and strategies guiding development in the Iskandar Development Region (“IDR”) of Johor, Malaysia. IRDA played a central and strategic role in the formulation and ongoing implementation of the Iskandar Malaysia Comprehensive Development Plan.

Iskandar Investment Berhad (“IIB”), a government-linked investment company set up in November 2006 to drive the Iskandar Malaysia development corridor, designed Medini in Iskandar Puteri as a fixed, master-planned central business and township zone spanning over 2,230 acres destined to be the region’s economic hub by 2030. Rather than selling parcels outright, IIB retained land ownership by granting 99‑year master leases to developers under a Private Lease Scheme (“PLS”), enabling the private sector to build and sell units while IIB remained the landowner throughout.

From Surplus to Stability: The Overhang Question

Prior to the Covid-19 pandemic, the Iskandar region recorded one of the highest serviced-apartment overhang rates in Malaysia, with an estimated 5,000 to 6,000 completed units remaining unsold more than nine months after completion.

However, the situation has improved markedly in recent years. By mid-2023, the number of unsold high-rise units in Johor Bahru had fallen by around 28%, while the stock of unsold units still under construction dropped by nearly half. This positive trend continued into late 2024, when the total number of unsold serviced apartments in Johor fell to approximately 11,810 units out of 102,438 statewide, placing Johor third in the national overhang ranking instead of first.²

The overhang issue in Johor was mitigated primarily through the impact of the JS-SEZ, which boosted demand for serviced apartments. The JS-SEZ has played a significant role in attracting international investments and driving regional growth, leading to increased property sales. After the pandemic and the recovery of the economy, Johor saw more than 15 percent growth in overall property sales, including those affected by the property overhang, especially serviced apartments priced at RM500,000 and above.³

Investment Momentum in the JS-SEZ

In the first quarter of 2025 alone, the JS-SEZ attracted the lion’s share of investor attention, accounting for 90% of all approved investments in Johor. This surge underscores the zone’s role as a major economic magnet.⁴

According to the National Property Information Centre statistics on the Malaysian property value transaction, the market is in a slow healing phase, with signs of gradual improvement tempered by lingering weaknesses.

Overhang of property is easing, led by a 6.7% year-on-year drop in serviced apartments to 18,246 units (RM14.61 billion) and a 5.6% quarter-on-quarter fall in Johor Bahru. However, demand has yet to fully rebound, as reflected in the 8.9% drop in transaction value to RM51.42 billion and the 6.2% fall in transaction volume to 97,772 deals in 1Q2025. At the same time, new residential launches surged by 124% to 12,498 units compared to 5,585 units a year earlier, yet sales performance remained modest at just 10.8%.⁵

While the spike in supply reflects developer confidence and a push to capture potential demand, it also poses a clear risk: if market absorption remains slow, as current figures suggest, this aggressive growth could easily outpace actual buyer interest, leading to unsold inventory piling up once again. In other words, even as overhang is improving now, an unchecked surge in new projects without a matching rebound in demand could reverse these gains and recreate the very oversupply problem the market is trying to resolve.

Rethinking Ownership through Private Lease

In Malaysia, all land ultimately belongs to the State Authority under the National Land Code 1965, which governs Peninsular Malaysia. Ownership is typically granted as either perpetual ownership (freehold) subject to state powers such as compulsory acquisition, or leasehold, meaning ownership for a fixed term (commonly 30, 60, or 99 years) after which the land reverts to the state unless renewed upon payment of a premium.⁶ Renewal or conversion from leasehold to freehold is at the discretion of the State Authority and is not an automatic right.

A private lease on the other hand operates on a fundamentally different basis from land tenure created through state alienation under the National Land Code 1965. By contrast, a private lease is purely contractual in nature, arising from an agreement between the registered proprietor and another party, and does not result in the transferee being recorded as the registered owner in the land register.

In practice, such an arrangement often takes the form of a chain of contractual leases. First, the landowner holding either freehold or state leasehold title, grants a “head lease” to a developer for a specified term, such as 99 years, through a private contractual agreement. The developer, without obtaining or transferring legal title under the National Land Code 1965, then enters into sub-lease agreements with individual purchasers, sometimes for shorter durations such as 30 years.⁷ The purchasers’ rights derive entirely from these subleases and are enforceable only as between the contracting parties. Consequently, purchasers are not strata title owners, renewal or extension of their tenure depends on the developer’s and ultimately the landowner’s consent, and legal ownership in the land registry remains vested in the original landowner. This structural arrangement can also complicate management of common property, as the statutory mechanisms available to registered proprietors under strata title law are not directly applicable to private leaseholders.

The validity of private lease scheme in Malaysia can be seen in the recent case of Tropika Istimewa Development Sdn Bhd v Wong Hang Fah⁸, where the Court of Appeal’s decision on private lease schemes in Medini Iskandar marks a significant milestone, affirming their legality and validity under the regulatory framework set by the IRDA and approved by the Ministry of Housing and Local Government. It restores certainty to the property landscape within the SEZ, reassuring developers, investors, and buyers that projects compliant with IRDA guidelines and duly approved will not face retrospective invalidation, such as under the earlier Ang Ming Lee ruling. It confirms that Medini properties, while on freehold land leased for 99 years, can lawfully be developed and transacted under private lease arrangements. By upholding the enforceability of sale and purchase agreements and strata titles issued under the scheme, the decision not only safeguards developers’ rights but also strengthens the legal foundation for similar private lease frameworks in Malaysia’s SEZs.

Economic and Legal Perspectives on Private Leases

As the fourth quarter of 2025 approaches and property development accelerates, the risk of another overhang looms. One potential solution, should this occur, is the introduction of private lease sales. It could offer both economic opportunities and legal challenges in addressing the property overhang issue.

From an economic standpoint, the lesser the private lease term the lower the unit prices will be-by roughly one-third compared to conventional tenure, making them more accessible to buyers who might otherwise be priced out. At the same time, it would enable developers to unlock value from stagnant inventory that might otherwise sit unsold, generate no income, and risk eventual abandonment. This approach could appeal to investors seeking mid-term rental yields without committing to a long-term tenure, and it would enable landowners to retain the freehold interest and re-lease the property upon expiry, ensuring recurring returns.

Large-scale projects such as Forest City, with its plan for 700,000 units and a target population of two million, could use shorter leases as a sales tool to better match supply with actual market demand.⁹ Though the arrangement offers clear economic benefits for both buyers and developers, it is important to note the associated risks: shorter leases may be perceived as less valuable, limiting capital appreciation, and financial institutions may be hesitant to provide conventional mortgage financing for such properties.

From the legal angle of private leasing, its large-scale use for residential sales is relatively untested, particularly in the SEZ context. If the property is sold as strata units, the Strata Management Act 2013 (“SMA”) and Strata Titles Act 1985 (“STA”) would still apply, meaning buyers become part of the Joint Management Body or Management Corporation with obligations to contribute to maintenance fees. The key uncertainties lie in renewal rights, pricing upon expiry, and how strata governance will function in developments where ownership is limited to short leases. Without clear contractual terms and regulatory safeguards, disputes could arise over renewal obligations, buyback arrangements, and maintenance responsibilities.

Under the current legal framework, only registered proprietors of strata titles qualify as members of the Management Corporation (“MC”) under the STA and the SMA. Private lease purchasers, not being registered owners, cannot be MC members, which means they have no formal voting rights or legal standing in the management of the common property. This creates a gap where, even if the landowner steps back from daily management, the people who have the most interest in the property, who are the leaseholders, have no legal say in how it is run.

Legal Reforms for Sustainable Private Lease Models

One possible solution is legislative reform to expressly deem private lease purchasers as “owners” for the purpose of the SMA and related provisions under the Local Government Act concerning assessment and rating. If the law were amended to recognise long-term private leaseholders as equivalent to strata owners for management purposes, they could form or join the MC, contribute to the sinking and maintenance funds, and participate in decision-making on common property upkeep. Such recognition would align their rights and obligations with those of strata title owners, safeguarding their interests and ensuring sustainable management of developments. This would also give local councils clarity when levying assessments, since the leaseholders, not a distant landowner, would be the ones living there and responsible for payment and compliance.

In effect, the private lease structure could be made to function much like a strata title scheme, but without transferring the freehold interest, thereby balancing investor appeal, effective property management, and the landowner’s long-term control.

Nonetheless, even if private leaseholders were legally recognised as “owners” for management purposes, a further question arises: would their share units be calculated in the same way as for strata title owners, or on a reduced basis? This is particularly relevant in mixed developments combining residential, hotel, and commercial components—where property consultants typically allocate different share values based on use. Equal allocation across all uses would not be accurate or fair, as different property types carry different maintenance demands, operating costs, and usage intensity.

Conclusion

The JS-SEZ is positioned to become Southeast Asia’s next growth corridor, and the Private Lease Scheme provides a unique entry point for investors seeking both flexibility and long-term returns. Economically, it lowers barriers to entry, accelerates absorption of high-value developments, and ensures recurring revenue streams without the capital lock-in of outright ownership. Legally, the scheme is still maturing, but this presents a first-mover advantage for investors who can leverage robust contracts and proactive governance to secure their interests. With the right safeguards in place, private leases could evolve into a cornerstone of Johor’s property market, offering investors not just yield but also a strategic foothold in Malaysia’s most dynamic economic zone.

1. IM Investors, Medini (IM Investors) <https://www.iminvestors.com/medini.html?utm_source> accessed 1 October 2025.
2. Nordin R, ‘Significant Drop in Johor Property Overhang’ (The Star, 3 February 2025) <https://www.thestar.com.my/news/nation/2025/02/03/significant-drop-in-johor-property-overhang> accessed 1 October 2025.
3. ‘Johor Says Property Overhang Falling as JS-SEZ Boosts Demand for Service Apartments’ (Malay Mail, 2 February 2025) <https://www.malaymail.com/news/malaysia/2025/02/02/johor-says-property-overhang-falling-as-js-sez-boosts-demand-for-service-apartments/165268> accessed 1 October 2025.
4. Xiang Yun, Y, ‘JS-SEZ Drives Investment in the South’ (The Star, 22 April 2025) <https://www.thestar.com.my/news/nation/2025/04/22/js-sez-drives-investment-in-the-south> accessed 1 October 2025.
5. Syafiqah Salim, ‘Malaysia’s Property Transaction Value Drops 8.9% in 1Q, Reports Napic’ (The Edge Malaysia, 9 May 2025) <https://theedgemalaysia.com/node/754664> accessed 1 October 2025.
6. National Land Code, s 76.
7. Ainur Zaireen Zainudin, Norhafiza Abdullah, Norhidayah Md Yunus, Salfarina Samsudin, Nur Emma Mustaffa, Siti Radiaton Adawiyah Zakaria, Fatin Afiqah Md Azmi and Noorfajri Ismail, ‘Private Lease Apartment – A Better Potential Through Build‑Then‑Sell Approach’ (2023) 21 Planning Malaysia Journal 369 <https://doi.org/10.21837/pm.v21i27.1307> accessed 1 October 2025.
8. [2025] MLJU 1467.
9. Intan Farhana Zainul, ‘Family Offices to Boost Forest City, Grow Wealth Management’ (The Edge Malaysia, 7 October 2024) <https://theedgemalaysia.com/node/728478> accessed 11 December 2025.

Written by:

Mohd Zam Mustaman zam.mustaman@azmilaw.com
Jasmin Maylin Nga general@azmilaw.com

Corporate Communications
Azmi & Associates
13 February 2026

When the British departed from their colonial territories, they left behind more than railways, courts, and administrative buildings. They left a legacy — a meticulously structured legal system refined through centuries of political struggle, social reform, and the tempering hand of jurisprudential thought. It was a system born from the soil of their own historical experience, shaped by philosophers and reformers, by judges who wrestled with conscience and authority.

In the colonies, however, this system was transplanted, not grown. It was imposed, not inherited. And in that act of transplantation, something crucial was lost: the organic connection between a people’s traditions and the moral foundations of their law.

The Challenge of Inherited Justice

In the Far East — from the Malay Peninsula to the archipelagos and across the vast continent of Asia — societies were accustomed to absolute power. Historically, the ruler was often seen not merely as a political leader, but as a divinely sanctioned figure: the Emperor, the Sultan, the Heavenly Son, or the Mandate Bearer. Obedience was not merely civic duty; it was moral righteousness.

The colonial powers introduced a new order — one based on the rule of law, checks and balances, and separation of powers. These were radical concepts to populations who had, for centuries, viewed authority as sacred and unquestionable. When independence came, the legal structures remained, but the spirit that animated them did not always survive the transition.

What resulted was a system of law that looked British, sounded British, and was administered in British-derived courts — but often operated in a very different cultural and moral context.

The Internalised Accountability

In societies where questioning authority is seen as disrespect, accountability becomes an alien concept. The legal system, however well designed on paper, depends not only on statutes and procedures but also on the moral courage of its custodians — judges, lawyers, and law enforcers.

When enforcement agencies, for instance, are given powers intended to protect public interests but begin to exercise those powers selectively, or to “look the other way,” the system decays from within. The maxim nemo dat quod non habet — “no one can give what he does not have” — suddenly takes on an ethical dimension.

An officer who has no moral right to permit wrongdoing cannot, by any stretch of reasoning, grant such permission to others. Yet, corruption does precisely this: it transfers what was never his to give — the protection and trust of the law — into the hands of those who subvert it.

When a local authority official allows a public place to be used for private profit, or when enforcement turns a blind eye to illegality for convenience or gain, we are not merely witnessing administrative failure. We are witnessing the betrayal of public trust. The officer, bound by oath to serve the public, has acted ultra vires — beyond the authority conferred upon him — and has, in essence, “given what he does not own.”

The Consequences of Legal Alienation

The public, witnessing such contradictions, grows confused. The law, once a symbol of justice, begins to look like an instrument of convenience — malleable, uncertain, and negotiable. People lose the moral instinct to distinguish right from wrong within the boundaries of law. They begin to say, “This is a grey area,” even when the wrongdoing is obvious.

Only when they themselves become victims do they rediscover the urgency for justice. By then, the damage is systemic. A society that doubts its own justice system breeds cynicism faster than reform. It is no coincidence that in many post-colonial societies, faith in law enforcement is often replaced by fatalism — a quiet acceptance that power, not justice, decides outcomes.

The Spirit of the Maxim and the Lesson of Integrity

The old Latin maxim nemo dat quod non habet was originally confined to property law: one cannot transfer ownership of what one does not own. Yet its moral reach is far broader. It is a reminder that authority, like ownership, carries moral boundaries. One cannot confer legitimacy upon wrongdoing, nor can one derive righteousness from corruption.

In religious and philosophical traditions across the East, the principle is echoed in various forms: “What you owe, you must repay”; “The cause will find its effect”; “The seed sown shall bear fruit.” All point to the same moral law: power is borrowed, never owned. When it is abused, something sacred is broken — not just in governance, but in the collective soul of the people. These are not merely moral sayings but universal laws of balance and consequence.

Indeed, when one pretends to give what one does not have — whether it be property, authority, or right — one must first take it from its true owner. That act of taking, whether done through deceit, neglect, or misuse of position, is in essence theft.

This is the moral heart of both nemo dat and ultra vires: no person, no officer, no institution may confer what was never lawfully theirs to give. To do so is to appropriate what belongs to the public, and to disguise corruption as governance.

When an officer abuses his authority, the harm he causes reverberates far beyond his own office. It undermines the very legitimacy of the institution he represents. In this sense, corruption is not merely a crime against law; it is a spiritual debt — a moral liability that must be repaid, whether through accountability, exposure, or the natural law of retribution.

A society that tolerates such impropriety, remaining silent so long as it benefits from it, sows the seeds of its own undoing. When that impropriety grows unchecked, it becomes a consuming fire that spares no one.

The maxim, the doctrine of ultra vires, and all the great principles of public law are, at their core, nothing more — and nothing less — than manifestations of honesty and integrity.

Reform and Rediscovery

Reforming such a system is never easy. Structural changes — new laws, better procedures, oversight commissions — can only go so far. What is needed is a cultural realignment: a rediscovery of integrity as the soul of governance.

Public officers must be reminded that their authority is borrowed, not owned. Like trustees of an estate, their duty is to administer for the benefit of the people, not themselves. The estate, in this case, is the public trust. To misuse it is akin to an administrator distributing assets to those outside the rightful beneficiaries — a moral and legal breach.

For citizens, too, reform begins in awareness. The people must understand that justice systems are not foreign relics to be endured, but living mechanisms that require participation, vigilance, and demand for fairness. Silence and submission — virtues under absolute rule — become vices in a democracy.

Towards a Reconciliation of Law and Culture

The reconciliation of inherited legal systems with local traditions is one of the great unfinished projects of post-colonial governance. True justice cannot exist as an imported institution; it must become a lived value.

For Malaysia, this means embracing the form of British-derived law while restoring the moral essence of our own traditions — compassion, righteousness, balance, and the sense that authority must serve, not rule.

When these values are infused back into the legal culture, the law ceases to be a foreign imposition. It becomes a mirror reflecting the nation’s soul.

Conclusion

The legacy of colonial law is both a gift and a challenge. It gave us structure, but not spirit. It established institutions, but not necessarily integrity. The task of our generation is not to dismantle it, but to enliven it — to ensure that justice is not merely administered, but believed in.

The maxim nemo dat quod non habet reminds us that no one — not even a government officer — can give away what is not his. Authority belongs to the people; trust belongs to the office; and justice belongs to the truth.

To betray any of these is to incur a debt that no time or excuse can erase.

Written by:

Chwa Ling Kiat chwalingkiat@azmilaw.com

Corporate Communications
Azmi & Associates
10 February 2026

Introduction: When Seeing Is No Longer Believing

Rapid advances in Artificial Intelligence (“AI”) technology have transformed how digital content is created and consumed. While AI has enabled innovation and efficiency, it has also introduced serious risks of exploitation, misappropriation, and deception. One of the most disruptive developments is synthetic media, which is a content generated or manipulated by AI to convincingly imitate real people. As synthetic media becomes increasingly indistinguishable from reality, modern legal systems are being forced to reassess traditional legal assumptions surrounding consent, truth, and ownership.

Understanding Synthetic Media and Deepfakes

Synthetic media refers to digital content created by AI rather than by direct human touch. Common examples include deepfake videos, virtual humans, and augmented reality visuals. A deepfake is a specific form of synthetic media, first popularised in 2017 through online face-swap videos. Since then, deepfake technology has evolved rapidly, enabling the creation of highly realistic audio and video that can depict individuals saying or doing things that never occurred.

How Deepfakes Work: The Technology Behind the Deception

At its core, deepfake technology uses AI to learn patterns from real human faces and voices and then reproduce them. Although the results may appear futuristic or fictional, the process relies on established machine-learning techniques. The primary system used is Deep Learning, particularly Generative Adversarial Networks (“GANs”). A GAN consists of two competing AI systems: a generator, which creates fake images or videos, and a discriminator, which attempts to distinguish fake content from real content. Through repeated competition, the generator improves until the fake content becomes highly realistic.

In addition to GANs, many deepfakes use autoencoding techniques, involving an encoder and a decoder. The encoder breaks facial images into core features such as eye shape and mouth movement, while the decoder reconstructs a face using those features. By combining one person’s facial identity with another person’s movements, AI produces convincing face-swap videos where the motion is real, but the identity is fabricated. This technical sophistication explains why deepfakes pose significant legal challenges.

The Legal Response: Three Emerging Pillars

As of 2026, legislatures worldwide have begun responding to synthetic media by restructuring regulation around three key legal pillars which are safeguarding intellectual property, the protection of personal dignity and preservation of democratic integrity.

Pillar I: Intellectual Property and Digital Personality Rights

Traditionally, intellectual property law offers limited protection over a person’s voice or likeness, as these were not historically considered “copyrightable”. Nevertheless, deepfake technology has exposed the inadequacy of this approach.

As a response, the United States (US) has taken significant legislative steps. For instance, Tennessee enacted the Ensuring Likeness, Voice, and Image Security or ELVIS Act 2024, expanding the right of publicity to protect an individual’s voice and likeness from unauthorised AI replication.

At the federal level, the Nurture Originals, Foster Art, and Keep Entertainment Safe or the NO FAKES Act 2024 further strengthens protection against unauthorised AI-generated recreations.

These laws were catalysed by the viral 2023 release of “Heart on My Sleeve”, which is a song falsely attributed to Drake and The Weeknd as the tune ended up being created using AI by a TikTok user Ghostwriter977. Before being exposed as fake and removed from the platform, the track spread rapidly across the TikTok and Spotify acquiring hundreds of thousands of listens as well which heavily highlighted how AI could commercially exploit an artist’s identity, voice and likeness without consent, prompting urgent legislative reform.

Another high-profile example occurred in October 2023, whereby AI-generated version of Tom Hanks was used in advertisements for a dental plan that he never appeared in or otherwise endorsed. Therefore, the NO FAKES Act is created to address these non-consensual digital replications and to hold individuals or companies liable for the production of unauthorised digital replication of individuals. Together, these developments signal a legal shift toward recognising digital personality as a protectable proprietary interest.

Pillar II: Personal Dignity and Non-Consensual Deepfakes

The protection of personal dignity is the most strictly regulated area, particularly concerning non-consensual intimate deepfakes. In the US, the Tools to Address Known Exploitation by Immobilizing Technological Deepfakes on Websites and Networks Act or TAKE IT DOWN Act 2025 has been enacted to criminalise the distribution of non-consensual intimate deepfakes and requires online platforms to remove such content within 48 hours of a valid request.

This reformation was also driven by the real-world harm. In October 2023, a male student from Aledo High School, Texas had taken “innocent” photos of 14-year-old female students and used AI to create sexually explicit versions of them which then circulated on Snapchat. At the time, Texas law contained loopholes that failed to cover manipulated images, and schools lacked authority over off-campus conduct. Victims and their families were left without meaningful legal recourse, prompting national advocacy that culminated in the TAKE IT DOWN Act 2025.

Similarly, in Jane Doe v ClothOff (2025), a minor in New Jersey sued over an AI platform known as “ClothOff” that converted her fully clothed social media images into hyperrealistic porn content. The case became a landmark federal lawsuit highlighting the necessity of platform liability and rapid content removal mechanisms under the new legislation.

New Zealand offers a notable example of legislative reform as well. Under the Harmful Digital Communications Act 2015 (“HDCA”), posting an “intimate visual recording” without consent is a criminal offence punishable by fines or imprisonment. However, the original law struggled to address AI-generated imagery, as deepfakes were not considered “real” recordings.

To address this loophole, New Zealand introduced the Deepfake Digital Harm and Exploitation Bill, amending the Crimes Act 1961 and the HDCA to explicitly include synthetic or altered imagery. This reform ensures that AI-generated intimate deepfakes are treated as real for criminal law purposes.

This also alerted the New Zealand government as the Netsafe New Zealand, an approved agency under HDCA, which reported 68% spike in “digital extortion” in New Zealand cases linked to AI deepfake threats with victims as young as nine years old. These statistics underscore the urgency of strengthening legal protections against synthetic media harms.

Pillar III: Democratic Integrity and Transparency Obligations

Apart from that, synthetic media poses systemic risks to democratic integrity, particularly the risk of AI-powered misinformation and political manipulation. To address this, jurisdictions are increasingly mandating transparency.

The European Union Artificial Intelligence Act (EU AI Act) imposes strict disclosure obligations under Article 50, requiring AI-generated or AI-modified content, including deepfakes, to be clearly labelled. Where deepfakes are used in real-time contexts, disclaimers must appear from the first second of display.

Norway, as a member of the European Economic Area (EEA), has aligned its national framework through the proposed Norwegian AI Act 2026. Adopting a risk-based approach, with the statutory appointment of the Norwegian Communications Authority (Nkom) as the primary supervisory body and emphasising transparency and preventative governance.

Conclusion: Law in the Age of Synthetic Reality

In conclusion, synthetic media has fundamentally challenged existing legal frameworks. As AI blurs the line between reality and fabrication, the law is increasingly repositioning itself to protect human dignity, democratic trust, and personal identity. While regulatory approaches differ across jurisdictions, a common trend is evident considering that AI is no longer treated as a neutral tool but as a technology requiring active legal governance.

Written by:

Ahmad Hafiz Zubir hafiz.zubir@azmilaw.com
Nik Afifah Hana Nik Husni afifahhana.husni@azmilaw.com

Corporate Communications
Azmi & Associates
6 February 2026

Introduction

In recent years, the global economy has shifted decisively towards digital platforms and Cloud-based technologies. Businesses and governments alike are increasingly relying on data-driven systems to support operations, innovation, and services. With heavy streams of information being uploaded to the Cloud, the demand for digital infrastructure has likewise surged particularly for data centres capable of storing, managing, and processing large volumes of information.

Amidst this paradigm shift, Malaysia has leveraged its strategic location and abundant natural resources to establish itself as a rising hub in the global data landscape, coupled with competitive operating costs and supportive government policies to pique investors’ interest.

Yet, the rapid expansion of Malaysia’s data centre sector presents a complex interplay of legal obligations and ethical responsibilities, which investors and operators alike must navigate throughout the project’s lifespan in order to mitigate risks and meet international safety and accountability standards.

Key Legal Requirements for Data Infrastructures

1. Development Phase

Regulatory and Licensing Framework

At this early stage, Malaysia has yet to introduce a single, comprehensive statute specifically governing the development and operation of data centres. Instead, such projects are regulated through a combination of existing laws that collectively shape approval and compliance processes relating to land acquisition, zoning and construction approvals, and also procurement of critical utilities such as water and electricity. To provide guidance to prospective investors, the Ministry of Housing and Local Government issued a planning guideline in October 2024 (“KPKT Planning Guideline”),¹ serving as a practical playbook outlining the relevant agencies and processes involved in establishing a data centre, as follows:

In short, prospective investors must navigate a highly regulated planning environment by selecting suitable industrial or commercial land that meets key requirements, including sufficient power capacity, a reliable water supply, and dual-fibre connectivity, all of which are foundational considerations for securing development approvals. Sites must also be located within designated industrial or commercial zones and positioned away from environmentally sensitive areas, flood-prone zones, peatlands, and national security perimeters, while observing adequate buffer zones, building setbacks, and open-space provisions.

According to the KPKT Planning Guideline, projects are further expected to ensure sustainable resource use, including efficient power and water systems, and, from 2026 onwards, compliance with the GBI Data Centre Tool 2.0 to meet national environmental standards.²

2. Operations

The need for compliance extends well beyond development and initial set-up of a data centre. Investors must continuously stay informed and ensure ongoing alignment with regulatory requirements and industry best practices, particularly in relation to personal data protection and cybersecurity obligations.

Personal Data Protection & Data Governance

Investors should be mindful of the EU’s General Data Protection Regulation (“GDPR”), which applies extraterritorially to any organisation processing the personal data of EU residents. Non-compliance can result in severe penalties, including heavy fines for privacy or cybersecurity breaches. For example, in 2024, ClearView AI was fined nearly EUR 100 million (USD 116.62 million) for scraping over 30 billion facial images without consent, violating GDPR transparency and data minimisation requirements.³ These global rules highlight the importance of assessing data protection and cybersecurity risks in any data centre investment.

In Malaysia, a similarly stringent approach is reflected through the Personal Data Protection Act 2010, the core regulatory framework for personal data protection and data governance in local data centres. Operators must implement suitable technical and organisational measures to protect personal data from loss, misuse, unauthorised access, and alteration. This includes ensuring lawful processing, obtaining necessary consents, maintaining accurate data, and limiting retention to legitimate purposes.⁴ Data centres serving regulated sectors (e.g., banking and finance) are also subject to additional governance frameworks such as Bank Negara Malaysia’s Risk Management in Technology⁵ standards, which prescribe stringent controls over data confidentiality, resiliency, and outsourcing. Operators remain responsible for ensuring their data handling practices meet statutory transparency, security, and accountability requirements.

For investors, evaluating an operator’s ability to meet these obligations is critical, as lapses can materially affect asset value, operational continuity, and overall investment risk.

Cybersecurity

As repositories of sensitive information, data centres are attractive targets for cyberattacks. In Malaysia, cybersecurity obligations are anchored in the Computer Crimes Act 1997, the Communications and Multimedia Act 1998, and sector-specific regulatory standards.

Operators must implement comprehensive safeguards to protect systems and data from cyber threats, including intrusion detection, network segmentation, access controls, continuous monitoring, and incident response mechanisms. Compliance with recognised frameworks such as ISO/IEC 27001 is widely expected, particularly for data centres serving regulated industries. Collectively, these obligations ensure that facilities maintain high levels of operational security and cyber resilience.

Tax Incentives

Malaysia’s Digital Ecosystem Acceleration Scheme (“DESAC”) offers data centre investors attractive incentives, including a reduced corporate tax rate of 10–15% or investment tax allowances ranging from 30–100% of qualifying capital expenditure for a period of five (5) to ten (10) years.⁶

To qualify, companies must meet criteria related to capital investment, hiring local high-skilled talent, adopting Industry 4.0 technologies, implementing green initiatives, developing vendors, and demonstrating strong sustainability performance.⁷

For investors, securing DESAC eligibility should therefore be a priority, as these incentives can materially enhance a project’s financial viability by reducing upfront costs, improving returns on investment, and supporting long-term operational sustainability. As such, DESAC eligibility is a key consideration when selecting sites, structuring investments, and assessing overall project feasibility.

Ethical Dimensions

1. Anti-Bribery & Corruption

Anti-bribery and corruption requirements for data centre investors and operators in Malaysia are primarily governed by the Malaysian Anti-Corruption Commission Act 2009, including the corporate liability provision under Section 17A.

Organisations must therefore implement adequate procedures to prevent corrupt practices in all dealings, particularly in land acquisition, licensing, procurement, and engagement with public authorities. This includes adopting policies on gifts, hospitality, conflicts of interest and third-party management, as well as conducting due diligence on contractors and partners.

Companies are also expected to maintain transparent procurement processes, proper financial controls, and staff training programmes, as non-compliance may result in severe penalties, including substantial fines and potential liability for directors and senior management.

2. Anti-Modern Slavery (“AMS”) Laws

Data centre construction projects carry heightened risks of labour exploitation, particularly where migrant workers are recruited through unethical brokers, employed with improper permits, or subjected to harmful practices such as passport retention, underpayment, or wage withholding. These conditions may amount to forced labour and would be classified as “modern slavery” under international legislation and domestic legislation with extraterritorial reach such as the Modern Slavery Act 2015 enacted by the Parliament of the United Kingdom.⁸

While Malaysia has ratified the International Labour Organisation’s Forced Labour Convention, 1930 (No. 29) (ILO Convention 29)⁹ and recognises a general right against slavery and forced labour under its Federal Constitution,¹⁰ protections against modern slavery are dispersed across multiple laws, rather than being consolidated into a single, comprehensive statute. These include the Anti-Trafficking in Persons and Anti-Smuggling of Migrants Act 2007, Employment Act 1955, and the Passports Act 1966, much like the current legislative framework for establishing data centres.

For foreign investors that are subjected to stricter home legislation and Environmental Social Governance (ESG) obligations, this can present a challenge in meeting higher labour standards than those required locally. Such elevated expectations often translate to increased financial burdens on local stakeholders, who are expected to implement due diligence and AMS enforcement mechanisms across supply chains.

A collaborative approach is therefore required to balance elevated AMS expectations with practical capacity. This includes contractual obligations outlining each stakeholder’s responsibilities, recognition of third-party certifications to reduce administrative burdens, and capacity-building support. Coupled with fair pricing for subcontractors, these measures help align all participants, from direct contractors to upstream vendors, around responsible labour practices, mitigating legal and reputational risk while strengthening ethical resilience across the data centre construction ecosystem.

Moving Forward: Responsible Growth in a Digital Era

For investors, success in Malaysia’s data centre landscape will hinge on an approach integrating ethical governance, responsible labour practices, and transparency within operations. This means designing facilities that are secure and sustainable, establishing governance structures that anticipate regulatory evolution, and fostering a culture of accountability that extends across all levels.

Beyond immediate compliance considerations, investors and operators must recognise that Malaysia’s regulatory and ethical expectations will continue to evolve in accordance with global standards. As jurisdictions worldwide strengthen safeguards on data protection, cybersecurity, sustainability, and labour rights, the ability to demonstrate proactive risk management and adherence to international best practices will become a key differentiator. By investing early in resilient infrastructure, robust internal controls, and collaborative supply-chain oversight, investors can minimise operational disruptions and position themselves as reliable contributors to Malaysia’s digital transformation.

1. ‘Planning Guideline for Data Centre’ (Department of Town and Country Planning of the Ministry of Housing and Local Government, 2024) <https://mytownnet.planmalaysia.gov.my/ver2/gp/GPP%20Pusat%20Data%20ENG.pdf> accessed 16 November 2025.
2. Green Building Index, ‘GBI Tools’ <https://www.greenbuildingindex.org/gbi-tools/> accessed 16 November 2025.
3. ‘Clearview AI Faces Criminal Complaint in Austria for Suspected Privacy Violations’ (Reuters, 2025) <https://www.reuters.com/sustainability/society-equity/clearview-ai-faces-criminal-complaint-austria-suspected-privacy-violations-2025-10-28/> accessed 16 November 2025.
4. Personal Data Protection Act 2010, ss 5, 6, 7, 10.
5. ‘Risk Management in Technology (RMiT)’ (Bank Negara Malaysia, 2023) <https://www.bnm.gov.my/documents/20124/938039/PD-RMiT-June2023.pdf> accessed 16 Novmber 2025.
6. ‘Guidelines and Procedures for the Application of Digital Ecosystem Acceleration (DESAC) Scheme’ (Malaysian Investment Development Authority, 2022) <https://www.mida.gov.my/wp-content/uploads/2024/12/DESAC-Guideline_MIDA.pdf> accessed 16 November 2025.
7. Ibid.
8. Modern Slavery Act 2015, s 1.
9. International Labour Organization, “C029 – Forced Labour Convention, 1930 (No. 29)” (1930) <https://normlex.ilo.org/dyn/nrmlx_en/f?p=1000:11200:0::no:11200:p11200_country_id:102960> accessed 16 November 2025.
10. Federal Constitution, Art 6.

Written by:

Gavin Chan Zi Jian gavin.chan@azmilaw.com
Arienne Lim Li-Ann ariennelim@azmilaw.com
Pugalanthyi Pillai a/l Vedikaran pugalanthyi@azmilaw.com
Muhammad Amsyar Akif Amran amsyarakif@azmilaw.com

Corporate Communications
Azmi & Associates
4 February 2026

Introduction

Over the past two decades, Malaysia’s biotechnology industry has evolved from a niche sector into an increasingly strategic pillar of the national economy. Recognising the potential of biotechnology to drive economic development, technological advancement, and sustainability, the Malaysian Government has positioned the biotechnology as a key sector within its broader innovation-led growth strategy. This ambition is underpinned by a deliberate legal and regulatory framework designed to enable safe, sustainable, and commercially viable development.

To support this vision, Malaysia has adopted a multi-layered approach encompassing policy guidance, regulatory oversight, funding support, tax incentives, and infrastructure development. This framework seeks to foster innovation while ensuring public health, environmental protection, and compliance with national and international legal standards.

Policy Direction and Institutional Support

The cornerstone of Malaysia’s biotechnology legal framework is the National Biotechnology Policy 2.0 (NBP 2.0), launched in 2022 as a continuation of the original 2005 policy. The NBP 2.0 emphasizes a bio-innovation society aimed at wealth generation and social well-being through three focus areas: agriculture and food security, healthcare and well-being, and the industrial circular economy.

To implement these objectives, the Government established the Malaysian Bioeconomy Development Corporation (Bioeconomy Corporation), formerly known as the Malaysian Biotechnology Corporation. As the lead agency, it provides regulatory guidance, mentorship and funding support. The rebranding from the “Malaysian Biotechnology Corporation” to the “Malaysian Bioeconomy Development Corporation” reflects Malaysia’s strategic shift toward a regulated bioeconomy model that leverages biological resources for national growth.

A Diverse Regulatory and Sectoral Ecosystem

Malaysia’s biotechnology landscape is broad, segmented into four primary subsectors, each operates within its own regulatory framework, governed by specific legal instruments and oversight government agencies:

• Healthcare Biotechnology
  Healthcare biotechnology, including biopharmaceuticals, vaccines, and diagnostic tools, is regulated primarily by the National Pharmaceutical Regulatory Agency (NPRA) under the Ministry of Health (MoH). The NPRA ensures compliance with safety, efficacy, and quality standards through clinical trial approvals, product registration, and post-market surveillance.

• Agricultural Biotechnology
  Agricultural biotechnology contributes to food security and agri‑innovation. Regulation in this area is conducted through sectoral agencies including the Department of Agriculture (DOA) under the Ministry of Agriculture and Food Security (MAFS), which administers guidelines related to plant and animal health, pest management, and biotechnology applications. Regulated activities involving Living Modified Organisms (LMOs) are also subject to the Biosafety Act 2007, which mandates risk assessment and approvals for release, import, export, and contained use of LMOs to manage risks to health and the environment.

• Environmental Biotechnology
  Environmental biotechnology, including waste management and bioremediation, intersects with environmental law. The Ministry of Natural Resources and Environmental Sustainability (NRES) oversees policies relevant to environmental protection. Development proposals with significant environmental footprints may trigger an Environmental Impact Assessment (EIA) under the Environmental Quality Act 1974.

• Industrial Biotechnology
  Industrial biotechnology supports bio-based manufacturing, including biofuels, bioplastics, and other sustainable materials biologically derived industrial products. The Ministry of Investment, Trade and Industry (MITI), through the Malaysian Investment Development Authority (MIDA), promotes investment incentives that encourage biotechnology adoption in industrial processes. Legal compliance is required in areas including product standards and environmental regulations.

Certain biotechnology activities in Malaysia may require specific licences, approvals, or notifications depending on the nature of the work involved. For example:

• Environmental Impact Assessment (EIA)
  Large-scale biotechnology projects with potential significant environmental effects must obtain the EIA approval from the Department of Environment (DOE) under the Environmental Quality Act 1974.

• Healthcare Biotechnology Approvals
  Clinical trials, product registration, or manufacturing of healthcare biotechnology products must comply with NPRA requirements, including adherence to Good Manufacturing Practice (GMP) standards prior to market authorisation.

• Biosafety Approvals
  Activities involving LMOs are regulated under the Biosafety Act 2007. Risk assessments demonstrating appropriate biosafety measures are in place to protect human health and the environment are required and formal approvals must be obtained before commencing regulated activities such as release, import, export, or contained use of LMOs.

Intellectual Property Protection and Commercial Value

In the biotechnology sector, intellectual property (IP) is more than a legal right — it is often the core commercial asset of the business. The value of a biotechnology company is frequently anchored in the strength of its innovation, proprietary data, and know-how, all of which are protected through an effective IP strategy. Malaysia’s stable statutory environment provide biotechnology companies with the legal tools to secure proprietary innovations, attract investment, and commercialise technologies responsibly:

• Patents Act 1983 [Act 291] – protects inventions and grants exclusive rights to inventors. Recent 2022 amendments have streamlined processes for microbiological deposits in compliance with the Budapest Treaty.

• Trademarks Act 2019 [Act 815] – safeguards brand identity and goodwill for biotechnology products.

• Industrial Designs Act 1996 [Act 552] – protects the visual design of biotechnological tools and apparatus.

• Copyright Act 1987 [Act 332] – covers original works, including bioinformatics software and proprietary genomic databases.

• Geographical Indications Act 2022 [Act 842] – protects products linked to specific regional qualities, particularly relevant to agricultural biotechnology.

• Trade secrets – protected under common law principles related to confidential information.

Emerging Legal Frontier (2025 to 2026 Updates)

The 2026 legal landscape is increasingly defined by the integration of emerging technologies and global standards:

• National Biotechnology Ethics Guidelines: Launched on 9 September 2025, these guidelines establish 15 core ethical principles, including transparency and social responsibility, to govern frontiers like gene editing and cultured meat.

• Enhanced Medical Device Control: The Medical Device (Prescribed Medical Device) Order 2026, gazetted in January 2026, introduces stricter oversight for aesthetic and cosmetic biotechnology devices (such as laser systems and High-Intensity Focused Ultrasound (HIFU)), with full enforcement beginning on 1 June 2026.

• AI and Data Governance: In line with the Personal Data Protection (Amendment) Act 2024, biotechnology companies are navigating stricter genomic data privacy requirements and the voluntary National Guidelines on AI Governance & Ethics as the government moves toward statutory AI regulation.

Funding, Incentives, and Commercialisation Support

Access to financing is a persistent challenge for biotechnology companies, as traditional financial institutions and private investors (including venture capital and angel investors) often regard early-stage biotechnology ventures as high risk, particularly where intangible assets such as IP form the primary collateral. The Government has implemented specific legal and policy measures to address some of the gaps.

Legal and Incentive Framework for Biotechnology Development

• BioNexus Status
  Awarded by the Bioeconomy Corporation, this status grants eligible biotechnology companies fiscal incentives, including income tax exemptions on non-IP income and investment tax allowances, which are governed by the BioNexus Bill of Guarantees (BOGs). The BoGs represent a formal recognition and commitment by the Malaysian Government to foster long-term growth by ensuring a stable and supportive environment for biotechnology companies, protect the interests of investors and mitigate political and regulatory risks particularly for international investors. Approvals for these benefits remain valid for the duration of the BioNexus Status, provided the company continues to comply with the terms and conditions outlined in the BioNexus 3.1 Framework.

• The Bio-based Accelerator (BBA) Program: Nurturing the Biotechnology Pipeline
  The BBA program is a high-priority strategic initiative administered by the Bioeconomy Corporation to facilitate the transition of bio-based startups and SMEs into the high-value biotechnology chain. While BioNexus Status serves as the definitive incentive for mature, R&D-driven entities, the BBA addresses critical developmental gaps in technical skills, regulatory compliance, technology adoption, and financial readiness for earlier-stage companies. By infusing science, technology, and automation into operations, the BBA empowers companies in the agriculture, industrial, and healthcare sectors to achieve the operational maturity required to eventually qualify for expanded fiscal incentives and government guarantees under the BioNexus regime. As of January 2026, the program aligns with the MADANI Government’s priorities, specifically exploring digital and AI-enabled solutions to accelerate commercial growth and strengthen Malaysia’s global competitiveness within the circular economy.

• The Malaysian Investment Development Authority (MIDA) Incentives
  MIDA incentivises qualifying biotechnology companies through legally prescribed measures such as Pioneer Status and Investment Tax Allowance, which reduce tax burdens and encourage capital investment in high-growth biotechnology manufacturing and value-added activities. These incentives are embedded within Malaysia’s tax laws, providing a predictable legal framework for investors and industry participants.

IP-Backed Financing

Recognising the growing importance of IP as a commercial asset, under the 13th Malaysia Plan (13MP) (2026 to 2030), the Government emphasis strengthening the innovation ecosystem, including initiatives to promote IP-backed financing by encouraging financial institutions to understand and extend credit against intangible assets such as patents and proprietary data. This policy direction necessarily engages the development of a supporting legal framework that clarifies IP valuation, security interests, enforcement rights, and insolvency treatment, to protect lenders and borrowers alike. While IP-based lending remains nascent in practice, this policy direction reflects concerted efforts to broaden access to financing beyond traditional physical collateral requirement. It enables companies, including biotechnology firms, to unlock value from their intangible assets.

Public-Private Partnerships (PPPs)

The Government actively encourages PPPs between academia, public research institutions, and private industry to enhance R&D capabilities, foster knowledge transfer, and accelerate commercialisation pathways. These collaborations are typically governed by carefully drafted agreements defining IP ownership, licensing rights, confidentiality, funding arrangements, and risk allocation, ensuring that the interests of all parties are clearly defined and legally protected throughout the research and commercialisation lifecycle.

Infrastructure and Ecosystem Support

Infrastructure remains integral to biotechnology enterprise growth. In response, Malaysia has developed biotechnology parks, shared laboratories, incubation facilities, and ecosystem platforms that operate within established legal and regulatory framework to provide physical infrastructure, technical expertise, and business support for startups and scaling firms. These facilities are typically supported by governance structures and contractual arrangements that address issues such as facility access, intellectual property use, compliance obligations and risks management, helping companies bridge the gap between research and commercial markets.

Talent Pool and Talent Development

A skilled workforce is essential to Malaysia’s biotechnology ambitions. In addition to scientists and technical professionals, the sector relies on legal and regulatory experts who can navigate complex areas such as intellectual property, biosafety, clinical approvals, and commercialization agreements. Malaysia already has a growing pool of such professionals in specialised law practices, universities, research institutions and biotechnology companies.

Talent development is supported through degree programmes, scholarships, professional training, and technology transfer initiatives from research institutions to industry. Collaborative partnerships are often formalised through agreements that define roles, IP ownership, confidentiality, and regulatory responsibilities, enabling professionals to apply both scientific and legal expertise in commercial settings. These efforts ensure biotechnology enterprises have the human capital necessary to innovate responsibly, comply with statutory obligations and operate effectively within Malaysia’s robust legal ecosystem, reinforcing the nation’s broader innovation and regulatory framework.

Conclusion

Malaysia’s biotechnology ecosystem reflects a deliberate integration of innovation, commercialisation and legal stewardship. Through policy direction, statutory oversight, licensing regimes, IP protection, targeted funding, tax incentives, and infrastructure development, Malaysia has established a legal and regulatory environment that balances growth with public health, environmental protection, and investor confidence.

For businesses and investors exploring opportunities in Malaysia, understanding this legal and regulatory landscape and ecosystem enablers, is essential to successfully navigating opportunities, managing risks and realising the potential of Malaysia’ dynamic biotechnology sector.

Written by:

Airene Ho Eu Ghee aireneho@azmilaw.com

Corporate Communications
Azmi & Associates
1 February 2026

Introduction

The close of 2025 marked a landmark acquisition by a Malaysian Single Family Office, illustrating the evolving scale and institutional maturity of family offices within the Malaysian investment landscape.

The family office involved in the acquisition is none other than the Valiram Family Office. The Valiram Family Office preserves and manages the wealth of the founder of the Valiram Group, Jethanand Utumal Valliram. The Valiram Group holds substantial wealth and is widely recognised for managing and operating international retail brands such as Victoria’s Secret, Michael Kors, Bath & Body Works, and others.

The Valiram Family Office is in the process of acquiring a 40% stake in The Exchange TRX retail mall and a 60% stake in an adjacent office tower, for a total consideration of approximately US$266 million, with completion expected in the first half of 2026.

This acquisition is significant not merely because of its size, but because it reflects a broader structural shift in how Malaysian Ultra-High-Net-Worth families manage, preserve, and deploy capital.

A Single Family Office (SFO) is a private and dedicated structure established to manage the wealth, investments, governance, succession, and legacy of a single family. Unlike traditional holding companies or ad-hoc investment vehicles, an SFO centralises investment decision-making, asset holding, risk management, and inter-generational planning within a professionally governed framework tailored exclusively to the family’s objectives.

The scale of this acquisition undertaken by a Malaysian Single Family Office underscores Malaysia’s growing emergence as a viable jurisdiction for the establishment of family offices and the utilisation of related incentives. While Singapore remains the dominant regional hub, Malaysia offers comparative advantages in terms of cost efficiency, regulatory flexibility, cultural familiarity for Malaysian families, and increasingly deliberate policy support.

In this regard, Malaysia has taken an important policy step by introducing a government-led Single Family Office initiative administered by the Securities Commission Malaysia. Under this framework, qualifying Single Family Offices are recognised within a regulated incentive regime, subject to prescribed substance, governance, and investment requirements.

A defining feature of the Malaysian initiative is the requirement that such Single Family Offices be established within Forest City, Johor Bahru, a designated Special Financial Zone. This location-based requirement reflects the government’s broader objective of anchoring family office activity within Malaysia, encouraging real economic substance, professional employment, and long-term capital deployment.

Recent policy developments therefore signal Malaysia’s intent to capture a meaningful share of regional family office assets, positioning the country as a complementary hub alongside Singapore and Hong Kong rather than as a direct competitor. The Valiram Family Office stands as a compelling illustration of this emerging trend.

The Valiram Family Office: A Case Study

A brief examination of the historical origins of the Valiram brand indicates that the Valiram Group was established in Kuala Lumpur in 1935 as a textile trading business, marking over nine decades of commercial presence. Today, the Valiram Group has expanded globally and is recognised as the leading luxury goods retail operator in Southeast Asia. The group is currently led by third-generation family members, Sharan, Ashvin, and Mukesh Valiram, who have significantly expanded the group’s footprint and diversified its investment strategy. This generation was instrumental in bringing international brands such as Tory Burch, Michael Kors, Victoria’s Secret, Swiss Watch brands, and Bath & Body Works into the Valiramportfolio.

The Valiram Group represents a prominent example of a Malaysian family transitioning from a purely operating-business legacy into a structured family office model, as reflected in the establishment and activities of the Valiram Family Office. Through this structure, the family is able to separate operating risk from investment capital, professionalise asset management, and pursue long-term investment strategies beyond the retail sector.

One of the most significant recent strategic moves by the Valiram Family Office was its investment in the Tun Razak Exchange (TRX) precinct in Kuala Lumpur. In late 2025, the family office reportedly agreed to acquire a 40% stake in The Exchange TRX retail mall and a 60% stake in the TRX Campus office tower from Australian developer Lendlease. The transaction, valued at approximately A$400 million (around RM1.1 billion), underscores the family office’s focus on large-scale, long-term commercial real estate assets. The Exchange TRX has rapidly established itself as one of Malaysia’s most prominent retail destinations, featuring over 400 tenants and demonstrating strong performance in its first year of operations. This investment leverages the Valiram Group’s deep expertise in retail while extending its exposure into premium commercial real estate.

Beyond asset selection, the Single Family Office structure provides important structural advantages, particularly in relation to tax efficiency and investment execution. When properly structured, an SFO enables investments to be documented and held through carefully designed vehicles, reducing transactional friction and allowing capital to be deployed efficiently. In addition, returns on investment such as dividends, distributions, or capital gains may be managed in a tax-efficient or tax-neutral manner, subject to applicable laws and incentive frameworks. These features make the SFO particularly suitable for families deploying patient capital into long-term assets such as commercial real estate and hospitality.

In October 2025, the Valiram Family Office further diversified its asset base when a family-controlled subsidiary, Harum Aspirasi, acquired the 519-room Impiana KLCC Hotel for approximately RM315 million from Magma Group Bhd and KLCC Holdings Bhd. This acquisition further signals the family office’s strategic pivot towards income-generating commercial property and hospitality assets, reinforcing its role as a long-term capital allocator rather than a short-term investor.

The professionalisation of such a structure necessarily involves the active participation of legal advisers. Lawyers play a central role in assisting Single Family Offices by designing the legal architecture of the structure, advising on appropriate entities, drafting governance instruments, and aligning investment documentation with regulatory and tax requirements. In the context of large-scale acquisitions such as those undertaken by the Valiram Family Office, legal advisers also serve as risk managers, ensuring compliance, safeguarding control mechanisms, and embedding dispute-avoidance features within the overall structure.

Conclusion

The Valiram Family Office exemplifies how established Malaysian family businesses are increasingly adopting the Single Family Office structure to manage wealth beyond their core operating businesses. Through this model, the family is able to manage diversified assets across retail, commercial real estate, and hospitality; deploy patient capital into long-term, high-value projects; and preserve and grow family wealth within a structured governance framework that supports inter-generational continuity.

More broadly, the emergence of Single Family Offices in Malaysia marks a significant evolution in the country’s wealth management landscape. With the introduction of a formal government-led SFO initiative under the Securities Commission Malaysia, and the designation of Forest City, Johor Bahru as a dedicated base for such structures, Malaysia has signalled its commitment to becoming a credible and attractive jurisdiction for family offices.

Supported by policy incentives, professional expertise, and increasing institutional capacity, Malaysia is well-positioned to attract both domestic and international families seeking a stable, cost-efficient, and well-regulated environment for long-term wealth management. The Valiram Family Office illustrates this broader trend, demonstrating how Malaysian families are leveraging structured governance, professional legal support, and institutional-grade investment platforms to safeguard legacy, diversify wealth, and contribute to sustainable economic development.

References:

• Goh, Thean Eu. 2025. Malaysia’s Valiram Family Office Pays A$400 Million for Stake in Local Mall, Office Tower, December 24.

• Chong, Jinn Xiung. 2022. V for Valiram: Meet the Brothers behind Malaysia’s Luxury Retail Empire, February 4.

• Kaur, Sharen. 2025. Valiram Family Expands Prime Real Estate Holdings with RM1.1 Billion TRX Acquisition, December 24.

• Nambiar, Presenna. 2025. Magma, KLCC Holdings Sell Impiana KLCC Hotel for RM315m to Valiram-Backed Buyer, October 10.

Written by:

Mohamad Redzuan Idrus redzuan@azmilaw.com
Dhina Dharshan Ganesan dhinadharshan@azmilaw.com

Corporate Communications
Azmi & Associates
30 January 2026

Introduction

The Inland Revenue Board of Malaysia (“IRB”) has officially launched the Stamp Duty Special Voluntary Disclosure Programme (“SVDP 2026”) pursuant to an announcement made by the Prime Minister on 5 January 2026 in his 2026 New Year Address.¹

Overview of the SVDP 2026

By the powers conferred to the Stamp Duty Collector under subsection 47A(2) of the Stamp Act 1949 (“SA 1949”), all instruments that are executed between 1 January 2023 and 31 December 2025 are eligible under SVDP 2026. Additionally, the following applies:

1. There is no need for taxpayers to submit a formal appeal (permohonan rayuan penalti). Penalties will be remitted (exempted) automatically upon payment of the relevant stamp duty.²
2. While the Notice of Assessment (Notis Taksiran) or Stamp Duty Return Form (Borang Nyata Duti Setem) may still display a penalty amount, it will be automatically waived during the payment process.³

Is Your Document Eligible for SVDP 2026?

The SVDP 2026 covers all instruments executed, such as agreements or documents signed. In order to qualify for SVDP 2026, your instruments must meet two specific criteria:

1. The instrument must be executed (disempurnakan) between 1 January 2023 to 31 December 2025; and⁴
2. Stamping and payment of stamp duty for such instruments must be made within the period from 1 January 2026 to 30 June 2026.⁵

Audit Immunity

In addition to the penalty waiver, SVDP 2026 also ensures that any instrument stamped under the SVDP 2026 will not be audited.⁶

Important Reminders to Note

a) Finality of Deadline: The deadline is fixed on 30 June 2026. If payment is made one day later (e.g., 1 July 2026), you will lose the waiver entirely and be liable for the full penalty.

b) Pre-2023 Documents: These documents are not eligible for the SVDP 2026 and will attract standard penalties under the SA 1949.

c) Fraud: SVDP does not apply to cases involving fraud.⁷

Conclusion

It is advisable to submit your stamping applications and make payment as early as possible to ensure that the Notice of Assessment can be issued and payment can be completed before the cutoff on 30 June 2026.

Should you require guidance on stamp duty or broader tax regulatory compliance matters, please feel free to contact us.

1. YAB Dato’ Seri Anwar bin Ibrahim, “Perhimpunan Bulanan YAB Perdana Menteri Bersama Warga Jabatan Perdana Menteri Bagi Bulan Januari (Amanat Tahun 2026),” Prime Minister’s Office of Malaysia, 5 January 2026, https://www.pmo.gov.my/en/speeches-en/perhimpunan-bulanan-yab-perdana-menteri-bersama-warga-jabatanperdana-menteri-bagi-bulan-januari-amanat-tahun-2026/ <accessed on 30 January 2026>.
2. See paragraph 4.4 of the Garis Panduan Operasi Lembaga Hasil Dalam Negeri Malaysia Layanan Khas Penalti Di Bawah Seksyen 47a Akta Setem 1949 Bagi Program Khas Pengakuan Sukarela Duti Setem 2026 (“SVDP 2026 Operational Guidelines”).
3. See paragraph 4.10 of the SVDP 2026 Operational Guidelines.
4. See paragraphs 4.1 to 4.2 of the SVDP 2026 Operational Guidelines.
5. See paragraph 4.3 of the SVDP 2026 Operational Guidelines.
6. See paragraph 4.8 of the SVDP 2026 Operational Guidelines.
7. See paragraph 4.7 of the SVDP 2026 Operational Guidelines.

Written by:

Megan Yap Sze Chyi megan.yap@azmilaw.com
Sharmaine Yap Ern Xie sharmaine.yap@azmilaw.com

Corporate Communications
Azmi & Associates
30 January 2026