The Cross-Border Insolvency Act 2026 [Act 877] (“the Act”) came into operation on 28 August 2026, pursuant to P.U. (B) 311/2026. The procedural framework followed shortly after, with the new Order 88A of the Rules of Court 2012 coming into operation on 3 September 2026.
 
The Act adopts the principles of the UNCITRAL Model Law on Cross-Border Insolvency (1997) (“the Model Law”) with modifications for Malaysia. It establishes a framework for, among others, the recognition of foreign insolvency proceedings in Malaysia, access to Malaysian courts by foreign representatives and creditors, relief in aid of foreign proceedings, and cooperation between Malaysian and foreign courts and insolvency representatives.
 
Our earlier article highlighting the key features of the legislation, when it was a Parliamentary Bill, may be accessed here.
 
Since the publication of our earlier article, several legislative measures have been introduced to bring the new cross-border insolvency regime into operation.
 
Commencement of the Act
 
Under P.U. (B) 311/2026, the Minister in the Prime Minister’s Department (Law and Institutional Reform) appointed 28 August 2026 as the date on which the Act came into operation.
 
Malaysia therefore moves from having no dedicated Model Law-based statutory regime to an express framework for the recognition and coordination of cross-border corporate insolvency proceedings.
 
English Text as the Authoritative Text
 
By P.U. (B) 312/2026, the English-language text of the Act and any subsidiary legislation made under it has been prescribed as the authoritative text.
 
This is particularly significant for a regime designed for proceedings involving foreign courts, foreign representatives, insolvency practitioners, creditors and advisers across multiple jurisdictions.
 
Threshold for Claims of Creditors in Malaysia
 
The Cross-Border Insolvency (Prescription of Threshold) Order 2026 [P.U. (A) 299/2026] (“the Threshold Order”) also came into operation on 28 August 2026.
 
Pursuant to Section 21(3) of the Act, the Minister has prescribed an amount not exceeding RM200,000 as the threshold for the claims of creditors in Malaysia.
 
The threshold is relevant where the relief sought under Section 21 of the Act involve the transfer of a debtor's property outside Malaysia. As highlighted in our earlier article, such a transfer is subject to safeguards for creditors in Malaysia, including the requirement for certification or a guarantee that claims falling within the prescribed threshold have been satisfied from the property to be transferred.
 
Accordingly, the Threshold Order gives practical effect to an important safeguard afforded to Malaysian creditors while permitting the cross-border administration of assets under the new regime.
 
Companies Act 2016 Exemption
 
A further consequential measure was introduced through the Companies (Exemption) Order 2026 [P.U. (A) 305/2026] (“the Exemption Order”), which also came into operation on 28 August 2026. The Exemption Order addresses the interaction between the new cross-border insolvency regime under the Act and the existing provisions of the Companies Act 2016 (“CA 2016”) governing the liquidation of foreign companies.
 
Prior to the commencement of the Act, Section 578 of the CA 2016 provided a framework for the liquidation of foreign companies in Malaysia.
 
In particular, Section 578(3)(b) confers on a foreign liquidator the powers and functions of a liquidator in Malaysia until a liquidator for Malaysia is appointed by the Court. Section 578(4)(c)(ii) operates as a ring-fencing provision by requiring debts and liabilities incurred in Malaysia to be paid before the net amount realised from the foreign company’s property in Malaysia may be paid to the foreign liquidator.
 
The commencement of the Act therefore gave rise to a potential overlap between these provisions and the new statutory framework for the recognition of foreign proceedings and the granting of relief to foreign representatives.
 
To address this, the Exemption Order exempts a liquidator of a foreign company who: 

from the application of section 578(3)(b) and section 578(4)(c)(ii) of the CA 2016.
 
The result is that foreign insolvency proceedings falling within the new regime may be dealt with through the recognition and relief framework under the Act, including its safeguards for Malaysian creditors.
 
New Order 88A of the Rules of Court 2012
 
The final procedural piece was introduced through the Rules of Court (Amendment) Rules 2026 [P.U. (A) 313/2026], which came into operation on 3 September 2026. The amendments insert a new Order 88A into the Rules of Court 2012 and provide the procedural roadmap for applications under the Act.
 
Order 88A prescribes the procedure for the principal applications under the Act: 

Order 88A also imposes notification and publication requirements at both stages of the process. Unless the Court otherwise directs, notification of a recognition application must be given to specified interested parties within 14 days of filing. Notice must also be published on the Malaysia Department of Insolvency website within that period. Persons affected by the relief sought may apply for leave to intervene.
 
Order 88A therefore provides foreign representatives with a clear procedural route for obtaining recognition and relief before the Malaysian courts, while preserving safeguards for affected creditors and other interested parties.
 
Comments
 
With the commencement of the Act and the introduction of the accompanying subsidiary legislation and procedural rules, Malaysia's Model Law-based cross-border insolvency regime is now fully operational.
 
The new framework is a significant development in Malaysia's restructuring and insolvency landscape. Foreign representatives now have a statutory route to seek recognition and relief in Malaysia, Malaysian creditors benefit from express safeguards, and the courts have clear powers to facilitate cooperation and coordination in insolvencies spanning multiple jurisdictions.
 
Attention will now turn to the first recognition applications under the Act and the development of Malaysia’s cross-border insolvency jurisprudence.
 
Article written by Sharon Chong (Partner) and Charmaine Lionel (Associate) of the Restructuring and Insolvency Practice of Skrine.