Malaysia: Proposed mandatory beneficial ownership reporting requirements under the New Companies (Amendment) Bill 2023

In brief

Previously, the Companies Commission of Malaysia (CCM) issued a consultative document on 28 July 2020, inviting comments from the public on the Companies (Amendment) Bill 2020 ("2020 CA Bill"), which purported to enhance provisions in the Companies Act 2016 ("CA 2016") relating to the beneficial ownership reporting framework in Malaysia, in tandem with best international practices. However, the 2020 CA Bill was not tabled in Parliament.

Notwithstanding this, on 10 October 2023, a new Companies (Amendment) Bill 2023 ("2023 CA Bill") was tabled for its first reading at the Malaysian Parliament. The 2023 CA Bill purports to further augment corporate transparency and accountability, and as such, introduces, among other things, new legal requirements in the CA 2016 for Malaysian companies to collate and report beneficial ownership information to the CCM. In this article, we explore the mandatory BO reporting requirements proposed under the 2023 CA Bill and their potential implications on the wealth management industry.

In more detail

These are some of the notable amendments proposed under the 2023 CA Bill, which further amplify the obligation for Malaysian companies to identify and disclose their beneficial owners (BO) to the CCM:

  • The expansion of the criteria of a BO. Under the proposed amendments in the 2023 CA Bill, the definition of BO is expanded to include situations of ownership of both shares and company, and not just ownership of shares only:
    • In relation to shares, the BO is the ultimate owner of the shares. It does not include a nominee of any description.
    • In relation to a company, the BO is a natural person who ultimately owns or controls a company and includes a person who exercises ultimate effective control over a company.

In this regard, the proposed amendments empower the CCM to issue additional guidelines for the purpose of identifying a BO of a company.

  • Mandatory requirement to maintain a Register of Beneficial Owners. The proposed new Section 60B of the 2023 CA Bill imposes a new requirement for a company to keep and maintain a Register of Beneficial Owners ("BO Register") at the registered office of the company. In addition, the company is also required to notify the CCM of any changes in the BO information in the BO Register within 14 days from such change. The company, and every officer who contravenes this section, commits an offence and shall, on conviction, be liable to a fine not exceeding RM 20,000 and, in the case of a continuing offence, to a further fine not exceeding RM 500 for each day during which the offence continues after conviction.
  • Mandatory requirement for a company to obtain BO information. The 2023 CA Bill mandates each company to send a notice in writing to any of the following persons below to inform the company of whether such person is a BO of the company:
  1. Member of the company
  2. Any person whom the company knows or has reasonable grounds to believe is a BO of the company
  3. Any member or any person whom the company knows or has reasonable grounds to believe knows the identity of a person who is a BO of the company.

In other words, each company is required to send a notice to any person to seek further confirmation on the identity of the BO of the company.

Any person who receives such notice from a company and provides a statement which they know to be false or recklessly makes any false statement, commits an offence.

  • Access to BO information. The proposed new Section 60B of the 2023 CA Bill has given the Minister of Domestic Trade and Cost of Living ("Minister") wide powers to prescribe any person or class of persons, including law enforcement agencies and competent authorities, to access (a) the BO Register of a company that is kept at the company's registered office; or (b) BO information that is lodged with the CCM. In addition, the Minister may also prescribe the manner, terms and conditions for accessing the BO Register or BO information.
  • Self-disclosure obligation by a BO of a company. The proposed new Section 60D of the 2023 CA Bill imposes a duty on the BO of any company to notify the company of when they become a BO of the company, and they shall notify the company if there are any changes to their information in the BO Register. Failure to comply with this duty is an offence.


Although Malaysian companies are currently subject to limited BO reporting requirements under the existing Section 56 of the CA 2016 and the Guidelines for the Reporting Framework for Beneficial Ownership of Legal Persons ("BO Guidelines"), issued by the CCM, the new 2023 CA Bill, if passed into law, will mandate Malaysian companies to submit the information on their BOs to the CCM. In addition, it is not yet clear whether the BO information would be accessible to enforcement agencies or the public. Under the 2020 CA Bill, it was initially proposed that the BO information would be made available to the Royal Malaysian Police, the Malaysian Anti-Corruption Commission, the Royal Malaysian Customs Department, the Central Bank of Malaysia and the Securities Commission. As such, if the 2023 CA Bill is passed, it remains to be seen as to the manner in which the Minister prescribes the list of authorized persons to access the BO Register and the BO information, and whether such access could be granted to the wider public.

In addition, the 2023 CA Bill imposes an active obligation on any person who has reason to believe that they are a BO to step forward and disclose such information to the Malaysian company. This is in line with Malaysia's efforts to increase transparency over company ownership and control and to eradicate the establishment of opaque structures.

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This client alert was issued by Wong & Partners, a member firm of Baker McKenzie International, a global law firm with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a "partner" means a person who is a partner or equivalent in such a law firm. Similarly, reference to an "office" means an office of any such law firm. This may qualify as "Attorney Advertising" requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome.

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