The Cross-Border Insolvency Act 2026 improves insolvency case management, legal certainty, and stakeholder protection in Malaysia.
PUTRAJAYA: The enforcement of the Cross-Border Insolvency Act 2026 (Act 877), which came into force on Aug 28, will enhance the efficiency of cross-border insolvency case management.
Minister in the Prime Minister’s Department (Law and Institutional Reform) Datuk Seri Azalina Othman Said and Minister of Domestic Trade and Cost of Living Datuk Armizan Mohd Ali said the Act also improves legal certainty and protects the interests of creditors and stakeholders.
“Act 877 provides a dedicated mechanism for handling insolvency proceedings involving debtors, assets, creditors, or proceedings in more than one jurisdiction.
“This Act is the result of collaboration between Azalina and Armizan, in line with the MADANI Government’s legal reform agenda to ensure that the country’s legal framework remains relevant, progressive, and aligned with economic, social and international trade developments,” the ministers said in a joint statement today.
The statement further noted that Act 877 is based on the Model Law on Cross-Border Insolvency adopted by the United Nations Commission on International Trade Law (UNCITRAL).
“This Model has been adapted to align with Malaysia’s laws, judicial practices, economic conditions, and public interests, to ensure that its implementation takes into account the nation’s needs and interests,” the statement read.
The statement further noted that enforcement of Act 877 will help maximise the value of debtors’ assets and facilitate business rescue efforts.
“These measures are crucial for protecting investments and preserving jobs, particularly in situations involving insolvency proceedings across more than one jurisdiction,” the statement added.
The clearer framework for handling such proceedings will strengthen coordination and cooperation between courts and relevant authorities.
The statement added that the MADANI Government is committed to ensuring that Act 877 is implemented in an orderly, efficient and effective manner to bolster the nation’s economic resilience.
The implementation of the Act is also expected to support Malaysia’s position as an international trade and investment destination with a relevant and progressive legal framework.
