Waqf in Malaysia: The Perpetual Endowment

Waqf (plural awqaf, spelled wakaf in Malay) is an Islamic endowment. You give up ownership of an asset permanently and dedicate it to a charitable or pious purpose. The asset itself, the corpus, is preserved and never sold or distributed. Only the usufruct, meaning the income, produce or use it generates, is spent on the beneficiaries.

Three features define it:

• Perpetuity. A classical waqf is meant to last forever. A rental building endowed as waqf keeps housing its cause generation after generation.
• Irrevocability. Once validly created, you cannot revoke it, sell it back to yourself, or leave it to your heirs. It leaves your estate completely.
• Preservation of corpus. The endowed asset stays intact. If someone endows RM1 million as cash waqf, that RM1 million is invested and kept whole, and the returns fund the purpose.

This is what makes waqf a legacy instrument rather than an ordinary donation. A one-off gift is spent and gone. A waqf keeps giving from the same asset, in your name, long after you are gone. Founders (the waqif) have endowed wells, schools, mosques, libraries and hospitals that still operate centuries later.

For a Malaysian family with real wealth, waqf answers a specific question: how do you commit a defined pool of capital to a cause permanently, outside the reach of faraid distribution, market cycles and future family disputes. The endowment sits under the trusteeship of the state religious authority and runs to your stated intention (your niyyah), which is recorded when the waqf is created.

Waqf is voluntary. It is separate from zakat, which is an obligatory annual levy, and this guide keeps the two clearly apart in a later section.

Malaysian waqf practice starts from two legal categories, then adds forms based on what is endowed.

Waqf am gives the trustee flexibility to apply funds where the need is greatest. Waqf khas gives you control over the destination, which suits founders who want their name attached to a specific institution such as a scholarship or a clinic.

Waqf zurri deserves care. It lets a founder provide for family within an endowment while keeping the corpus intact, and it eventually becomes fully charitable. Some Malaysian states recognise and administer it, others treat it cautiously because family waqf has historically been used to keep property from faraid distribution. Confirm the position with your State Islamic Religious Council before relying on it.

The form of the asset then layers on top: land and buildings (immovable waqf), cash (waqf tunai), shares (waqf saham) and corporate assets. The next section covers the movable forms that most new founders now use.

Land waqf is the classical form. Modern Malaysian practice has opened waqf to money and securities, which is what makes it accessible to a wide range of donors and to companies.

• Cash waqf (waqf tunai). You endow money. The corpus is pooled and invested by the trustee in Shariah-compliant assets such as sukuk, and the returns fund the cause while the principal is preserved. The National Fatwa Committee ruled cash waqf permissible in 2007 (the 77th Muzakarah, held in April 2007), which cleared the way for bank and online channels. Amounts can be small, from RM10, or very large.
• Corporate waqf. A company endows part of its shares or assets so the dividends and profits flow to charitable purposes in perpetuity. The company keeps operating and generating returns, and a portion is permanently ring-fenced for good. Johor Corporation pioneered this model in Malaysia.
• Waqf saham (share waqf). You endow listed or unlisted shares, or you buy units in a share-waqf scheme that are then endowed. Dividends fund the cause while the shares stay invested. The Larkin Sentral offering was the first public issue of waqf shares in the world.

These movable forms suit founders who want to endow without giving up a specific plot of land, and they let a waqf be built up over time through regular contributions rather than a single large gift.

Waqf in Malaysia is a state matter under the Federal Constitution, which is why administration sits with each state and not with a single national regulator.

• State Islamic Religious Council (Majlis Agama Islam Negeri, MAIN or SIRC). Under each state's Islamic enactment, the SIRC is the sole trustee of all waqf property in that state. Any waqf you create vests in the SIRC as trustee. There are 14 of them, one for each of the 13 states and one for the Federal Territories (MAIWP). This single-trustee rule is the legal backbone of Malaysian waqf: you do not appoint your own trustee the way you would for a conventional trust.
• JAWHAR (Jabatan Wakaf, Zakat dan Haji). A federal department in the Prime Minister's Department, announced in 2004 to coordinate, plan and develop waqf, zakat and hajj matters nationally. It sets policy direction and supports development of idle waqf land, without displacing the SIRCs as trustees.
• Yayasan Waqaf Malaysia (YWM). A federal foundation established on 23 July 2008 under the Trustees (Incorporation) Act 1952, initiated by JAWHAR, to promote and channel waqf, run national cash-waqf programmes and coordinate projects with the state councils.

Mutawalli (nazir). The manager who runs a specific waqf day to day is the mutawalli. The SIRC can act as mutawalli itself or appoint one, which is how bodies like Waqaf An-Nur Corporation manage endowments on the ground while legal title stays with the council.

The practical takeaway for a founder: you create the waqf, but you deal with your State Islamic Religious Council (or a body it authorises) as the party that holds and administers it. Where you live and where the asset sits determines which council governs your endowment.

A valid waqf needs a competent founder, a clear intention, a defined asset and a lawful purpose, then it is registered with the trustee.

The elements Shariah requires:

• Waqif (founder): an owner of sound mind who freely owns the asset being endowed.
• Mawquf (asset): a specific, identifiable, lawfully owned asset. For property, clean title matters.
• Mawquf alaih (beneficiary or purpose): a lawful charitable or pious purpose, general (am) or specific (khas).
• Sighah (declaration): a clear declaration of intent to endow, ideally in writing.

The practical steps in Malaysia:

1. Decide the form and purpose. Cash, shares, or property; general or specific; and the exact cause you want to fund.
2. Approach your State Islamic Religious Council or a channel it authorises (a participating Islamic bank, the myWakaf platform, or a mutawalli like a corporate waqf body). Cash waqf can be done online in minutes.
3. Execute the endowment. For cash and shares this is a contribution or transfer. For land, title is transferred to the SIRC as trustee and the waqf is gazetted, which takes legal and land-office work.
4. Record your intention. Specify whether it is am or khas, and any conditions, so the trustee applies the benefit correctly.

You can create a waqf two ways in time. A lifetime waqf takes effect immediately and the asset leaves your estate at once. A testamentary waqf (waqf through wasiyyah) takes effect on death and is carved out of your will, which brings in the one-third limit covered later.

For a large property endowment, involve a lawyer and the land office early. Idle or disputed title is the most common reason a well-meant property waqf stalls.

Cash waqf is now the easiest way in. You contribute money, the trustee pools and invests it in Shariah-compliant assets, the principal is preserved, and the returns fund approved projects. Since the 2007 fatwa, banks and state councils have built digital channels for it.

Common channels in 2026:

• Participating Islamic banks. Several banks collect cash waqf on behalf of state councils, through branches, internet banking and their apps, typically settled by FPX or DuitNow.
• myWakaf platform. A shared online platform run through the Association of Islamic Banking and Financial Institutions Malaysia (AIBIM), where you pick a specific project and contribute (covered in the next section).
• State council portals. Each SIRC runs its own waqf collection, for example Perbadanan Wakaf Selangor, Wakaf Pulau Pinang and the councils in Johor, Perak and the Federal Territories, usually with an online payment page.
• Employer and salary deductions. Some employers offer waqf deductions from payroll into a state fund.

Most channels let you set a recurring monthly amount, which is how a modest cash waqf compounds into a meaningful endowment over years. Keep your receipts: cash waqf to a state council or a body it establishes can qualify for a tax deduction, covered in the tax section. Always confirm the collecting body is the SIRC itself or an authorised channel before you contribute.

myWakaf is the clearest example of the banking sector channelling cash waqf at scale. It grew out of Bank Negara Malaysia's Financial Sector Blueprint, which called on Islamic banks to collaborate and standardise a shared waqf fund, coordinated through AIBIM.

What it is:

• A single platform where the public contributes cash waqf to specific, listed projects.
• A collaboration between Islamic banks and the state religious councils, which remain the trustees. The banks collect and channel; the councils hold and apply.
• Ten participating Islamic banks: Affin Islamic, Bank Islam, Bank Muamalat, Bank Rakyat, Bank Simpanan Nasional, CIMB Islamic, Hong Leong Islamic, Maybank Islamic, MBSB Bank and RHB Islamic.

Projects are grouped into pillars, broadly:

• Education: facilities, scholarships and research.
• Health: medical equipment, treatment support and healthcare infrastructure.
• Economic empowerment and investment: helping small entrepreneurs and building income-producing assets.
• Community: general welfare and shared-prosperity projects.

The platform shows each project's collection target and progress, so you see exactly what your contribution funds. This project-level transparency is the main draw for donors who want their cash waqf tied to a defined outcome rather than a general pool.

For a Malaysian family the initiative is a low-friction entry point: you can start a cash waqf for a few ringgit, direct it to a named cause, and receive documentation for tax purposes. For larger commitments, families more often deal directly with a state council or a corporate waqf mutawalli, where a specific endowment can be structured around a named institution.

Two Johor examples show how far waqf has moved beyond mosque land into corporate finance.

Waqaf An-Nur Corporation (WANCorp). Johor Corporation (JCorp) pioneered corporate waqf in Malaysia. From 2006 it endowed a block of shares in its listed and unlisted companies (including Kulim, KPJ Healthcare and Johor Land) and appointed WANCorp as the mutawalli to manage the endowment, with legal trusteeship under the Johor Islamic Religious Council. The endowed shares, valued at around RM200 million to RM250 million when the model was formalised, grew in value over the following decade as the underlying companies performed, and WANCorp's total waqf assets were reported at around RM786 million by the end of 2015. The dividends fund a chain of more than 20 Waqaf An-Nur clinics and dialysis centres that give subsidised treatment to low-income patients of all backgrounds. The company keeps operating and generating returns; a permanent slice is ring-fenced for charity.

Larkin Sentral. In 2017, Larkin Sentral Property Berhad, a subsidiary of Waqaf An-Nur Corporation, made a public offering of waqf shares, up to 850 million ordinary shares at RM0.10 each, to be endowed to WANCorp. It was the first public offering of waqf shares in the world, and it was approved as Shariah-compliant by the Securities Commission's Shariah Advisory Council. The proceeds went to upgrade the Larkin Sentral transport terminal in Johor Bahru and to help low-income single mothers afford shop-lot rentals at the hub, so the endowment produces both public infrastructure and livelihoods.

The lesson for founders with business assets: waqf can hold equity. A company or an individual can endow shares so the enterprise carries on while its dividends fund a cause forever. This is the corporate and share-waqf structure that makes waqf relevant to entrepreneurs and family businesses, and it is why the model sits close to family-office and succession planning.

These three are often confused. They serve different roles, and only one is obligatory.

Zakat is a duty. It is calculated on qualifying wealth (savings, gold, business assets, and so on) above the nisab threshold, at a set rate, and paid each year to the eight categories of recipients defined in the Quran. It is collected and distributed by state zakat authorities. Our haji and zakat guide covers the calculation and payment in full.

Sadaqah is voluntary charity given from goodwill. The money or goods are handed over and used up. There is no requirement to preserve any capital.

Waqf is voluntary like sadaqah, and it works differently in structure. You keep an asset intact permanently and give away only its yield. Scholars describe waqf as sadaqah jariyah, a continuing charity that keeps rewarding the founder because it keeps producing benefit.

For planning purposes: pay your zakat because it is owed, give sadaqah when you wish to help immediately, and use waqf when you want to lock a defined asset into a cause forever. They are complementary, and a family often does all three.

Islamic estate planning in Malaysia uses four tools. Waqf is the permanent-endowment piece.

Waqf interacts with these rules through when you create it:

• Lifetime waqf. The asset leaves your estate immediately, so it is not part of faraid and not counted in the one-third will limit. This is the cleanest way to endow a large sum, because it settles the transfer while you are alive.
• Testamentary waqf (through wasiyyah). If you direct a waqf to be created from your estate on death, it is a bequest. It falls inside the one-third ceiling on wills, and it must respect the rule that a bequest cannot be made in favour of a faraid heir without the consent of the others.

So a founder who wants certainty endows during life; a founder who wants to keep assets available until death carves the waqf out of the one-third by will. Many families combine both. Our wills and estate guide and our warisan guide cover faraid, wasiyyah and hibah in depth. Coordinate any large waqf with your overall plan so the endowment, the will and the faraid shares add up correctly.

Realistic figures for how a waqf plays out. Investment returns are illustrative and not guaranteed; a cash-waqf fund invests in Shariah-compliant assets whose yields move.

Reading the scholarship example. A RM1 million lifetime cash waqf leaves your estate now, so it is outside faraid and the one-third cap. Invested at around 4%, it throws off roughly RM40,000 a year in perpetuity. Over 25 years that is about RM1 million of scholarships paid out while the original RM1 million stays whole and keeps working. A single gift of RM1 million would be spent once. The same sum held as waqf keeps giving.

Reading the will example. With a RM6 million estate, the wasiyyah ceiling is one-third, about RM2 million. You could direct part of that to a testamentary waqf and leave the rest of the one-third to non-heirs, while the remaining two-thirds passes by faraid. To endow more than the one-third, do it as a lifetime waqf instead.

The legal spine. Waqf falls under state Islamic law, so each state's enactment governs it, and the State Islamic Religious Council is the sole trustee. You cannot appoint a private trustee for a waqf the way you can for a conventional trust. This gives waqf strong permanence, because the corpus sits with a public religious authority, and it means you rely on that authority's governance and administration.

Irrevocability. A validly created waqf cannot be undone. Plan the purpose carefully, because you cannot later redirect the corpus to your family or to a different cause. Where circumstances change, Shariah allows limited mechanisms such as istibdal (substituting the waqf asset for another of equal or greater value), but this needs the trustee's approval and is not a back door to recover your capital.

Tax. Cash waqf given to a State Islamic Religious Council, or to a body it establishes, can qualify for an income tax deduction under section 44 of the Income Tax Act 1967 (subsection 44(11D)), following changes gazetted from 2020 that extended relief to cash waqf and cash endowments to approved recipients. The deduction is subject to the combined cap of 10% of aggregate income that also covers other approved gifts, so very large one-year contributions are not fully deductible in a single year. Keep official receipts from the collecting body. Rules and approved-recipient lists change, so confirm the current position with LHDN and see our tax guide before relying on a deduction.

A conventional-trust comparison. A private trust or a foundation lets you name your own trustees and retain more control and flexibility, including revocability in some structures. A waqf gives that up in exchange for permanence and religious merit. Families with complex succession often run both: a trust or family-office structure for the assets they want managed flexibly, and a waqf for the slice they want committed to a cause forever.

Malaysia holds a large stock of waqf land, and much of it sits idle, which is where a lot of policy energy now goes.

JAWHAR's figures put gazetted waqf land at roughly 30,000 hectares, with an estimated value around RM4 billion, and a significant share undeveloped. Estimates vary by year and by how land is counted, but the pattern is consistent: many endowed plots produce little income because they lack capital, clear title, or a viable development plan. Idle land generates no benefit for its beneficiaries, which defeats the point of the endowment.

This gap is why the newer waqf forms matter:

• Cash waqf can fund the development of existing waqf land, so a pooled cash endowment builds on donated land that would otherwise stay empty.
• Waqf-linked sukuk and capital-market structures raise financing against waqf assets to develop them, with the returns preserving the corpus and funding the cause. Malaysia has issued Shariah-compliant, socially responsible structures along these lines.
• Corporate and share waqf bring professional management and income-producing assets into the waqf pool from the start, avoiding the idle-land problem entirely.

For a high-net-worth founder, the development gap is both a caution and an opening. The caution: endowing raw land without a funded plan can leave your waqf dormant. The opening: a founder who pairs land or capital with a credible development structure, working with the state council and a competent mutawalli, can build a productive endowment that visibly serves its purpose. If you are considering a property waqf, ask the SIRC how it will be developed and managed before you commit the asset.

Waqf is powerful because it is permanent. That same permanence is the main risk, so plan it with care.

• Irrevocability is total. You cannot recover the corpus or redirect it to family later. Endow only what you are certain you want committed forever, and settle your family's needs first through faraid, hibah and your will.
• Governance depends on the trustee. The SIRC or its appointed mutawalli manages your endowment. Ask how a specific fund is invested, how income is applied, and what reporting you receive. Choose a channel with clear project-level accounting.
• Idle-asset risk. An endowed asset that is not developed or invested produces no benefit. For property, confirm a development and management plan. For cash, confirm the investment approach and that the principal is genuinely preserved.
• Match the form to the goal. Use waqf khas to tie the benefit to a named cause, waqf am for flexible general good. Consider waqf zurri only after confirming your state administers it, because family waqf is treated cautiously in some states.
• Get the timing right. Endow during your lifetime to move a large asset cleanly out of your estate and outside the one-third will cap. Use a testamentary waqf when you want the asset available until death, within that cap.
• Coordinate the whole plan. A large waqf changes what is left for faraid heirs and for wasiyyah. Model the full estate so the endowment, the will and the fixed shares reconcile.

For sizeable endowments, involve a syariah-literate estate planner or lawyer and your State Islamic Religious Council early. Waqf sits alongside zakat, sadaqah and your will as one instrument in a coordinated legacy, and it rewards founders who define the purpose precisely and structure the funding so the endowment actually works.