As part of Malaysia’s commitment to curb financial crime and align with international standards, the Companies Commission of Malaysia (SSM) has implemented the Companies (Access to the Register and Information Relating to Beneficial Ownership) Regulations 2025, effective 10 January 2025 under Section 60A of the Companies Act 2016. This new framework mandates beneficial ownership (BO) compliance for all entities incorporated or registered under the Act, including foreign companies operating locally.

The reforms aim to close long-standing regulatory gaps and address misuse of corporate vehicles for tax evasion, money laundering, and concealment of assets.

Statutory Definition of Beneficial Owner

A beneficial owner is defined under Section 60A as:

“A natural person who ultimately owns or controls a company and includes a person who exercises ultimate effective control over a company.”

SSM’s Guidelines clarify:

“Ultimately owns or controls”: Direct or indirect ownership of ≥20% of shares or voting rights
“Ultimate effective control”: Authority to influence decision-making or management, regardless of ownership or formal title

Six Criteria for BO Identification

The BO Guidelines set out six pathways to identify a beneficial owner:

Criteria	Description	Applicable to
Criteria A	≥20% direct/indirect ownership of ordinary shares	Companies limited by shares
Criteria B	≥20% direct/indirect holding of voting rights	Companies limited by shares
Criteria C	Right to control management or decisions	Companies limited by shares & guarantee
Criteria D	Power to appoint/remove majority directors	Companies limited by shares & guarantee
Criteria E	Membership agreement controlling majority votes	Companies limited by shares & guarantee
Criteria F	≥20% direct/indirect ownership of ordinary shares	Companies limited by shares

📌 Companies limited by shares: Apply Criteria A–F

📌 Companies limited by guarantee: Apply Criteria C–E

BO Reporting Process via e-BOS

Here’s a concise checklist for BO compliance:

Identify BOs
– Apply Criteria A–F
– Collect full identification details: name, ID/passport, DOB, address, nature of control
Log into MySSM Portal
– Visit: com.my
– Access using company credentials
Launch e-BOS System
– Navigate to Beneficial Ownership module
Complete Submission
– Fill and verify BO particulars
– Attach supporting documents if necessary
Submit and Retain Records
– Obtain and file acknowledgement receipt
Maintain and Update
– Report changes within 14 days of awareness

📌 Submission must be made by a company secretary or authorised individual under the Companies Act 2016

Penalties for Non-Compliance

With the reporting steps in place, it’s equally important to understand the consequences of non-compliance as follows:

Offence	Penalty
Failure to identify or update BO records	Fine of up to RM20,000
Failure to lodge BO information with SSM	Fine of up to RM50,000
Knowingly providing false or misleading BO information	Fine of up to RM100,000, or 10 years’ imprisonment, or both

Implications for Business

This shift from a self-regulated model to direct regulatory oversight means companies must:

Establish internal controls and due diligence procedures
Review ownership chains involving nominee shareholders, trusts, layered SPVs, or foreign entities
Monitor and report indirect ownership and control arrangements

Examples of required action:

✅ A nominee shareholder structure must disclose the natural persons behind the nominees
✅ Trust arrangements must identify the ultimate beneficiaries
✅ Startups with foreign investment must trace BOs behind offshore investors

These changes reinforce Malaysia’s commitment to transparency, safeguard against misuse of corporate vehicles, and ensure alignment with global standards like the Financial Action Task Force (FATF) recommendations.

Conclusion

The Companies (Amendment) Act 2024 and its BO regulations mark a transformative step in Malaysia’s corporate regulatory landscape. By tracing the real individuals behind corporate structures, these reforms enhance investor confidence, fortify anti-corruption efforts, and position Malaysia as a leader in financial transparency

If you’re unsure where to start when it comes to remaining compliant, feel free to reach out to us at D&P and we are here to guide you through the process.

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Beneficial Ownership Reform 2025