Financial Leasing Activities Companies in Malaysia

Financial leasing activities in Malaysia are governed by the Financial Services Act 2013 (FSA) and the Islamic Financial Services Act 2013 (IFSA). The FSA provides for the regulation of financial services, while the IFSA provides for the regulation of Islamic financial services.

Both the FSA and the IFSA define financial leasing as a contract where the lessor transfers the ownership of an asset to the lessee for a period of time, and the lessee agrees to make periodic payments to the lessor for the use of the asset.

In Malaysia, financial leasing is a popular financing option for companies, as it allows them to acquire assets without having to bear the full cost of the asset upfront.

Under the FSA, financial leasing companies must be licensed by the Bank Negara Malaysia (BNM), the central bank of Malaysia. In order to obtain a license, financial leasing companies must meet certain eligibility criteria, including having a paid-up capital of at least RM5 million and a minimum net worth of RM10 million.

In addition, financial leasing companies must have in place adequate risk management systems and internal controls, and must appoint a qualified company secretary.

The BNM also imposes certain prudential requirements on financial leasing companies, including requirements on