Financial Crime World

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Malaysia Introduces New Guidelines for Beneficial Ownership Disclosure

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Kuala Lumpur, May 30 - In a significant move to increase transparency in corporate ownership, the Companies Commission of Malaysia (CCM) has published revised guidelines for beneficial ownership disclosure. The new framework came into effect on April 1 and aims to help companies understand and comply with the reporting requirements set forth by the Companies (Amendment) Act 2024.

Defining Beneficial Ownership

According to the guidelines, a beneficial owner is now defined as a natural person who ultimately owns or controls a company through interest in shares and effective control. This includes an individual who exercises ultimate control over the company.

Requirements for Companies

Under the new framework, companies are required to maintain a separate register of beneficial owners at their registered office. The register must be kept up-to-date and reflect any changes to the beneficial ownership information.

  • The register must include the following details:
    • Name and identification number of the beneficial owner
    • Address of the beneficial owner
    • Percentage of shares held by the beneficial owner
    • Nature of the beneficial owner’s interest (e.g. shareholding, loan, etc.)
  • Companies must also notify the CCM of any changes to the register within 14 days.

Obligations for Beneficial Owners

Beneficial owners themselves are also obligated to notify the companies they own or have a controlling interest in, including any updates to their status as beneficial owners. This includes:

  • Notifying the company of their appointment as a beneficial owner
  • Providing updated information if there are any changes to their status as a beneficial owner

Impact and Benefits

The revised guidelines supersede earlier versions issued by the CCM on March 1, 2020, and December 17, 2020. The new framework is expected to enhance transparency and accountability in Malaysia’s corporate sector, while also helping to combat money laundering and other financial crimes.

By introducing these new guidelines, the CCM aims to create a more transparent and responsible business environment, ultimately benefiting investors, stakeholders, and the Malaysian economy as a whole.