What is INTEREST SCHEME?

There are numerous interest scheme being offered to public to participate for the past few years. It heats up when investors are looking to various instruments to grow their money after the 2008 global financial crisis. But, before we participate in those scheme, are we really fully understand what is Interest Scheme?


Interest Scheme is a way of doing business in Malaysia. Interest Scheme involves the pooling of financial contribution from the public in exchange for an interest in a particular scheme. Such interest includes the usage of the facilities and services provided under the scheme or profit or returns, depending on the nature of the scheme.

Rules and Regulations
Promoter of an interest scheme must register the scheme with SSM before it can be offered to the public. The sale of interest is governed by the provision of Division 5 of Part IV of the Companies Act. The promoter of an interest scheme is also required to comply with the Policy Guidelines and Requirements issued by SSM from time to time.

'Interest' is defined under section 84 of the Companies Act as:
A right to participate or interest in any:
  • profits, assets or realization of a business;
  • common enterprise with expectation of profits, rent or interest;
  • time sharing scheme; and
  • investment contract.
How to identify an Interest Scheme?
  • You will be required to make payment to participate in the scheme
  • You are not a shareholder of the company
  • You are not involved in the day-to-day management of the scheme
  • You have interest in the business or the scheme offered
AND any one of the following criteria:
  • You have interest in the profit, asset and realization of a business or a scheme in Malaysia or elsewhere
  • You are promised that you will procure returns from the payment you made
  • You acquire the rights/interest in a property which includes the right to use the facilities on the property for a period of more than 12 months
  • You have the right to occupy any property for 2 or more times during the tenure of the time-sharing scheme

There are various types of Interest Scheme which offers:
  1. membership subscriptions of more than 12 months by Gold Clubs, Recreational Clubs and Fitness Clubs
  2. participate in time-sharing scheme
  3. invest in plantation and aquaculture scheme for commercial purposes (etc. Sharefarming)
  4. invest in Breeding of Livestock for commercial purposes (etc. swiftlets, catfish)
  5. invest in business whereby the investors are not involved in day-to-day management
  6. purchase burial plots, urns and columbaria by Memorial Park
  7. purchase undivided interest in greebelt land where by purchasers are let to expect profit from the sale of the appreciated value of the land (Land Banking Scheme)

Source: Suruhanjaya Syarikat Malaysia (SSM)

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