This is part 2 of a series of articles on the law of aviation finance and leasing in Malaysia. Following part 1, which is an overview of the legal framework governing aviation finance and leasing in Malaysia, this article focuses on registration requirements applicable to aircraft and the financiers’ and lessors’ interests in aircraft.

Introduction

Malaysia maintains an owner-based aircraft registry administered by the Civil Aviation Authority of Malaysia (CAAM). The legal owner of an aircraft may register its interests in the aircraft with CAAM.

Upon registration, the Malaysian aircraft register typically records the following particulars:

  1. the nationality and registration marks of the aircraft;
  2. the manufacturer, aircraft designation and serial number;
  3. the name and address of the registered owner;
  4. where applicable, the name of the charterer or hirer under a demise charter or hire arrangement to a qualified person;
  5. the date of registration and expiry of the certificate of registration; and
  6. any additional particulars as may be required by CAAM.

The register does not ordinarily record leases or mortgages. However, CAAM may require these transactional documents to be produced as supporting evidence of ownership or entitlement at the time of registration.

Eligibility and nationality requirements

An aircraft may generally be registered in Malaysia in the name of a “qualified person”, which includes:

  1. the Government of Malaysia;
  2. a Malaysian citizen; or
  3. a body corporate incorporated and having its registered office in Malaysia.

CAAM may allow the registration of an aircraft to a foreign citizen or foreign-incorporated entity who holds a legal or beneficial interest in the aircraft and resides or carries on business in Malaysia. However, in such cases, the aircraft must not be used for commercial air transport or aerial work unless it is leased to a qualified person.

Foreign ownership is not prohibited. An aircraft owned by a foreign owner may be registered in Malaysia, particularly where it is leased (including by way of demise charter) to a qualified Malaysian operator. In such cases, CAAM’s records should reflect the lease relationship between the foreign owner and local operator.

Registration requirements and formalities

To register an aircraft, the applicant must submit the prescribed CAAM application form together with supporting documentation, which broadly includes:

  1. details of the aircraft and its classification under the Civil Aviation Regulations 2016;
  2. evidence of ownership (such as a bill of sale or equivalent instrument);
  3. confirmation of de-registration (for aircraft previously registered abroad);
  4. documentary proof establishing the eligibility status of the owner, charterer, or hirer; and
  5. payment of applicable fees.

Documents must generally be submitted as certified true copies. Where documents are not in Malay or English, certified translations are required. Notarisation or verification may be required depending on the origin of the documents and CAAM’s administrative practice.

Legal effect of aircraft registration

While Malaysian aviation legislation does not expressly define the legal effect of registration, the entry on the Malaysian aircraft register and issuance of a certificate of registration by CAAM are widely regarded as prima facie evidence of ownership in Malaysia.

In practice, this means that while registration itself does not create or transfer title, it serves as the authoritative confirmation that CAAM recognises the registrant as the person entitled to the aircraft. The supporting transactional documents submitted during the registration process, such as bills of sale, lease agreements, demise charter or hire agreements, operate as substantive proof of the underlying proprietary interests. Together, these elements ensure that registration functions as both a public record of ownership and a key evidentiary tool in financing, enforcement and cross-border recognition contexts.

We will elaborate further in part 3 by providing specific examples of the legal effect of registration, particularly in circumstances where registration has a material impact on the enforcement of aircraft interests and remedies of chargors and lessors.

Foreign aircraft registers

Malaysia does not commonly rely on foreign aircraft registries as alternatives to CAAM registration. An aircraft may be registered in another country or state with which Malaysia has a bilateral agreement permitting flight operations over the Malaysian airspace.

From a financing perspective, registration in Malaysia generally facilitates the enforcement of the Malaysian-law-governed security interests. Where an aircraft remains foreign-registered, the operator must obtain a valid air operator certificate from CAAM to conduct commercial operations in Malaysia.

Aircraft mortgage registration

Any mortgage of a Malaysian aircraft may be entered in the Malaysian aircraft register administered by CAAM.

To register a mortgage, the mortgagee must submit:

  1. the prescribed CAAM mortgage application form;
  2. a certified true copy of the mortgage instrument;
  3. certified translations of documents in language other than Malay or English (if applicable); and
  4. payment of the registration fee.

The register records basic aircraft details and confirms the entry of the mortgage by reference to the date, time and register number.

Mortgage registration does not reflect the amount or currency of the underlying debt, and mortgages may be denominated in any currency. Once registered, a mortgage remains effective on the register until it is formally discharged. There is no requirement for periodic renewal.

Perfection and priority of security interests

Registration of a mortgage with CAAM serves primarily as a public notice of the existence of the mortgage. Additional perfection steps are typically required, including:

  1. stamping of transaction documents for payment of stamp duty purposes;
  2. registration of company charges with the Companies Commission of Malaysia or the Labuan Financial Services Authority, where applicable;
  3. registration of international interests with the International Registry, if the transaction falls within the scope of the Cape Town Convention; and
  4. acknowledgement of an irrevocable deregistration and export request authorisation (IDERA) by CAAM.

Priority between registered mortgages follows a time-based system. Earlier registrations generally take precedence over later ones, subject to the nature of the security and any agreed contractual variations.

The Malaysian aircraft register does not separately record security interests over engines or other removable equipment. While parties may contractually extend a mortgage to cover such items, the absence of public registration means that bona fide third-party purchasers may acquire competing rights once equipment such as engines or other removable equipment are removed from the aircraft. Robust contractual protections and applicable international registrations are therefore essential.

Statutory liens and priority claims

Malaysia has made declarations under Article 39 of the Cape Town Convention. As a result, certain non-consensual rights may take priority over registered mortgages without registration, including:

  1. employee wage liens arising after default;
  2. government claims for unpaid taxes or charges related to aircraft use;
  3. repairers’ liens for services performed on the aircraft while in possession; and
  4. rights of the Malaysian authorities or public service providers to detain aircraft for unpaid amounts.

Transfer of ownership

Transfers of aircraft ownership are typically effected by a bill of sale. To record a change of ownership, the new owner must submit fresh registration documentation to CAAM, together with a change of ownership notice and authority from the existing owner.

Upon transfer:

  1. the existing certificate of registration automatically expires;
  2. CAAM must be notified within 28 days; and
  3. the aircraft may not be operated until a new certificate of registration is issued.

It is important to note that outstanding mortgages and IDERAs should be discharged prior to the registration of transfer.

Deregistration and deregistration power of attorney

Applications for deregistration may only be made by the registered owner or a person authorised by the registered owner. In aviation finance transactions, financiers and mortgagees typically require the owner to execute an IDERA in their favour and file it with CAAM at closing.

The documents generally required for deregistration include:

  1. the prescribed CAAM application form for deregistration of aircraft;
  2. evidence that each person with a legal or beneficial interest in the aircraft has been satisfied or has consented;
  3. the certificate of registration;
  4. the certificate of airworthiness; and
  5. evidence that the aircraft is free from liens, including discharge of any registered mortgage, where applicable.

There is no prescribed statutory time period within which an application must be made.

With the executed IDERA, the consent of the lessee is not required for deregistration. The registered owner may deregister the aircraft directly.

Where documentation is complete, deregistration is typically effected within three to five working days. The deregistration fee depends on the aircraft’s weight and generally ranges from RM50 to RM300. In cases where there is no cooperation from the lessee, the timeline may extend, but deregistration is generally achievable within two to four weeks, depending on the circumstances.

A deregistration power of attorney is valid and enforceable in Malaysia even if it is governed by foreign law, provided that the requirements of the Powers of Attorney Act 1949 are satisfied. Under the Malaysian law, a power of attorney expressed to be irrevocable and granted for consideration is treated as irrevocable, and the lessee is not able to revoke the power of attorney without the concurrence of the owner.

The power of attorney remains effective notwithstanding the bankruptcy or insolvency of the lessee. The Malaysian governmental authorities generally recognise and give effect to IDERAs or equivalent deregistration powers, enabling secured parties to procure the aircraft deregistration and export without the operator or airline successfully preventing deregistration through unilateral action.

Conclusion

Malaysia’s owner-registry model, administered by CAAM and complemented by a mortgage register, delivers a predictable, finance-friendly framework for documenting and protecting aircraft security interests.

While registration is evidentiary, its combination with properly stamped transaction documents, IDERAs, company charge filings and International Registry entries provides a robust architecture for priority, enforcement and cross-border recognition. For aircraft financiers and lessors, early attention to eligibility, document formalities and engine or parts coverage helps avoid priority gaps and expedites transfer and deregistration when needed.

This article is authored by our Partner, Mr Cheah Soo Chuan, Senior Associate, Mr Khor Wei Wen, and Associate, Ms Sharon Teo. The information in this article is intended only to provide general information and does not constitute any legal opinion or professional advice.