Other BriefingsNew Guidelines for Beneficial Ownership Reporting in Malaysia
The Companies Commission of Malaysia (CCM) implemented new guidelines for beneficial ownership (BO) reporting on April 1, 2024. All entities must submit to the CCM information on their beneficial owner through the Electronic Beneficial Ownership System (“e-BOS”), a new electronic filing platform.
The guidelines also introduce a new definition of beneficial ownership, and no entity is exempted from BO reporting (previously, businesses that had met one or more exemption criteria could be exempted from identifying BO).
As of July 1, 2024, businesses that do not comply with the new guidelines will be taken as non-compliance.
Revision of the beneficial ownership definition
The new guidelines introduce a new definition of beneficial owner — ‘a natural person who ultimately controls or owns a company through interest in shares and effective interest and includes an individual who exercises ultimate effective control over the company’.
Further, any individual holding less than 20 percent shares or voting rights but exercises significant control or influence in the company is deemed the beneficial owner.
Removal of exemptions
Under the revised BO guidelines, no entity is exempted from the beneficial ownership reporting obligations, this includes state-owned enterprises, and publicly listed companies.
If an entity is unable to identify a BO, they must provide information of someone who is senior management and who holds key responsibilities within the company and has the authority to influence its operations.
Notification through the e-BOS System
The e-BOS System is the new online portal through which businesses can input their BO information. Newly incorporated private companies now have 60 days from the appointment of their corporate secretary to submit the BO information to the CCM.
Whenever there are changes to the BO information, this must be updated in the e-BOS System. Moreover, BO information must also be submitted alongside a company’s annual returns.
Verification of BO information
It is the responsibility of the business to verify the authenticity and accuracy of the BO information. Failure to comply with these duties will be deemed an offence. The amendments are aimed at enhancing transparency to enforcement agencies in their efforts to combat crimes such as money laundering, tax evasion, and terrorism financing, among others.
Important to stay compliant
To ensure compliance with the updated beneficial ownership reporting guidelines in Malaysia, businesses should prioritize familiarizing themselves with the new requirements and leveraging e-BOS for accurate and timely submissions. It is crucial to identify and verify BO information diligently, given the removal of exemptions and the potential penalties for non-compliance. Engaging with qualified local advisors can further aid in navigating these regulations and maintaining adherence, ultimately contributing to greater corporate transparency and mitigating risks associated with financial crimes.
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