Guidelines for new entities to be established to conduct Islamic financial business

The article is submitted by Christopher Lee, Partner heading the Banking & Finance Practice Group of Wong & Partners*, Kuala Lumpur. For any queries, please contact Christopher Lee at christopher.lee@wongpartners.com.

As part of its on-going efforts to promote and develop Malaysia as an International Islamic Finance Centre (the MIFC), Bank Negara Malaysia announced on 14 September 2006 a set of guidelines to permit the establishment of new entities to carry on banking and takaful business in international currencies as well as permit the establishment of international currency business units by existing Islamic banking and takaful companies. The new entities permitted are International Islamic Banks and International Takaful Operators. These new entities will enjoy certain tax incentives.