Financial Crime World

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Beneficial Ownership Disclosure in Malaysia: What You Need to Know

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The transitional period for the beneficial ownership reporting framework has come to an end, with all entities required to submit information on their beneficial owners (BOs) to the Suruhanjaya Syarikat Malaysia (SSM) by June 30, 2024. The Companies (Amendment) Act 2024 aims to enhance regulations and align them with international standards such as the Financial Action Task Force (FATF) and the Organisation for Economic Co-Operation and Development (OECD).

Key Changes

  • The definition of a BO has been broadened to include any natural person who exercises ultimate effective control over an entity, even if they have no shareholding interest.
  • No entity is exempt from identifying and reporting their BOs, including public listed and government or state-owned entities.
  • Entities must identify and report the BO information through SSM’s Electronic Beneficial Ownership System (e-BOs) portal.

Impact on Business Owners

Enhanced Transparency

The revised beneficial ownership reporting framework requires business owners to be more transparent about who ultimately owns or controls their companies. This includes identifying and reporting individual(s) from senior management who have the authority to make decisions for the company.

Compliance is Key

Failure to comply with the Act and BO Guideline may result in enforcement actions and hefty penalties.

Steps to Get Ready

  1. Send notices to members and individuals believed to be BOs.
  2. Review and verify responses received, using available information at the entity’s level.
  3. Update BO information into the Register of BO and retain supporting documents for a minimum of seven years after cessation of the BO.
  4. Submit updated information to SSM in a timely manner not later than June 30, 2024.

Conclusion

The onus is on business owners to familiarize themselves with and comply with the enhanced requirements surrounding beneficial ownership reporting. It is essential to put in place a BO policy or internal guidance document as a first line of defence in case anything goes wrong. Authorities and law enforcement agencies may conduct inspections, and any non-compliance with the Act and BO Guideline may result in enforcement actions and hefty penalties.

Contact Us

To ensure compliance with the latest guidelines, contact us now to let us help you navigate through the new landscape of beneficial ownership reporting. We will provide the guidance you need to understand the process and ensure your compliance.