Counsel in Malaysia have called for greater education to be
provided for domestic corporate issuers of sukuk, as
increased emphasis on compliance with sharia law in onshore
debt issuance has generated confusion.
Malaysia’s Prime Minister Najib Razak announced
in his budget speech last month that all onshore
sharia-compliant loans would be given a 20% stamp duty
exemption to reduce issuance costs of SRI sukuk.
But market participants have pointed to inadequate
guidelines for issuers of sukuk who are often
uncertain about whether their business operations remain
shariah-compliant throughout the product's tenure.
"Some issuers are hesitant to venture into sukuk
issuance because of the complexity of having an underlying
Lilian Liew, partner at Zicolaw in Kuala Lumpur
Driven by the country’s desire to entice a
larger pool of Middle East investors, Malaysia has seen a
tightening of shariah compliance in the last few