Islamic Financing

Our Services

At CY Wong Ng & Partners, we offer comprehensive legal support for clients navigating the complexities of Islamic financing in Malaysia. Islamic finance distinguishes itself from conventional finance by its stringent adherence to Shariah principles, derived from Islamic law (Shariah), prioritising fairness, transparency, and ethical conduct. Islamic finance prohibits practices such as interest (riba) and investments in activities deemed contrary to Islamic values. Key principles governing Islamic finance include: 

  • Prohibition of Riba (Interest)
    • Islamic finance vehemently opposes charging or paying interest, emphasising equity participation and profit-sharing arrangements to generate revenue.
  • Risk Sharing
    • In Islamic finance, asset-backed arrangements underpin transactions, necessitating risk-sharing among parties to ensure rewards are commensurate with risk.
  • Prohibition of Haram Activities
    • Islamic finance eschews investment in sectors deemed haram (prohibited) under Islamic law, including alcohol, gambling, and pork-related products.
  • Ethical Investments
    • Embracing ethical investment principles, Islamic finance channels funds into ventures that contribute positively to society while aligning with Shariah principles.

Our firm has extensive experience preparing Islamic financing instruments under various Shariah principles on behalf of Islamic financial institutions. We are active participants in Malaysia’s Islamic finance industry development. Regulators and financial institutions regularly seek our advice, and we work closely with Shariah scholars and advisors to devise practical, legal, and Shariah-compliant structures to facilitate various funding objectives. 

CY Wong Ng & Partners provides legal expertise across various instruments of Islamic financing, including: 

  • Murabaha (Cost-Plus Finance)
    • This is a prevalent mode of financing wherein the bank purchases an asset and sells it to the customer at a pre-agreed profit margin, often payable in instalments.
  • Mudarabah (Profit Sharing)
    • This partnership model involves one party providing capital and the other contributing expertise and management skills, with profits shared according to pre-determined ratios.
  • Musharakah (Joint Venture)
    • Musharakah, like Mudarabah, entails joint ventures in which partners contribute capital and participate in management, sharing both profits and risks.
  • Ijarah (Leasing)
    • In this arrangement, the lessor retains ownership while leasing out assets for a rental fee.
  • Sukuk (Islamic Bonds)
    • Sukuk serves as the Islamic equivalent of bonds, structuring future cash flows as asset-backed securities compliant with Shariah principles.

At CY Wong Ng & Partners, we understand the nuances of Islamic finance and offer tailored legal solutions to navigate this dynamic landscape. Our experienced team has assisted clients with various Islamic financing transactions, from structuring complex Sukuk issuances to facilitating Musharakah joint ventures. Whether you are looking to invest in Sukuk, participate in a Musharakah venture, or simply understand your options in Islamic finance, we can provide tailored solutions to meet your specific needs. 

Schedule a consultation with us today to explore how we can assist you in achieving your financial objectives while adhering to Shariah principles and ethical standards. 

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