The Malaysian Companies Act 2016 (Act A777)<\/a> has recently been amended by a new regulation (Act A1701). This regulation modifies certain articles of the former, particularly those affecting beneficial owners<\/strong> (\u00abBeneficial Owners (BO)\u00bb) of companies or the concept of these companies, through the incorporation of new articles: 60A, 60B, 60C, 60D, and 60E in the first case; and 573A in the second. It requires companies not only to take the initiative to identify their beneficial owners but also to maintain an updated register of them and report this to the Malaysian Companies Commission (SSM).<\/p>\n The incorporation of this new regulation into Malaysian law is similar, mutatis mutandis, to that previously carried out by Spain through the enactment of Law 10\/2010 of April 25, on the prevention of money laundering and the financing of terrorism, amended by Royal Decree-Law 7\/2021 of April 27, in accordance with the provisions of Directive 2015\/849 (AMLD4) \u2013 now repealed by Directive 2024\/1640 (AMLD6) \u2013 and Directive 2018\/843 (AMLD5) of the European Union (EU), in order to reflect the most recent developments in this area globally.<\/p>\n The objective of this Malaysian corporate reform is practically the same as the Spanish one, as it aims to complete the definition of beneficial owners (BOs) or ultimate beneficial owners (UBOs), establish the responsibilities related to the transmission of this information, and ultimately create a register of beneficial ownership. All of this aligns with what is provided in the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act (Act A2001), enacted to comply with the recommendations (specifically, number 24) of the Financial Action Task Force (FATF).<\/p>\n The new article 60A, when defining a beneficial owner of a company, expands its content by including not only the individual who \u00abultimately owns or controls a company\u00bb but also those who \u00abexercise effective control\u00bb over it. Although the new Act A1701 does not establish the criteria that clarify what is meant by \u00abeffective control,\u00bb the \u00abGuidelines for the Reporting Framework for Beneficial Ownership Companies\u00bb (Revised Guidelines), published by the Malaysian Companies Commission, do. They state that \u00abeffective control\u00bb exists when a person, even holding less than 20% of the shares or voting rights of the company, exerts significant influence or control over the directors or management.<\/p>\n It is important to note in this context that the concept of \u00abbeneficial owner\u00bb is limited to \u00abnatural persons.\u00bb But what happens when the \u00abbeneficial owner\u00bb is not a natural person but a legal entity? Could it be understood in this case, according to Spanish regulations (Article 4.2. b bis of the aforementioned Royal Decree), that the \u00abbeneficial owner\u00bb is the director? But if the director is also a legal entity, who ultimately is the true \u00abbeneficial owner\u00bb? In this regard, the previously mentioned Spanish regulations state: \u00abWhen the director is a legal entity, it shall be understood that control is exercised by the natural person appointed by the director,\u00bb who would thus become the \u00abbeneficial owner.\u00bb Would this be applicable to Malaysian regulations?<\/p>\n In this respect, it should be clarified that although these \u201cGuidelines\u201d clearly confirm in rules 8, 23, and 27 that \u201ca beneficial owner is a natural person who ultimately owns or controls a company,\u201d in rule 43 they clarify that when a company has no beneficial owner, or when one cannot be identified, it must provide the details of the natural person holding the position of executive manager and consequently responsible for managing the company. Although this solution may not be exactly the same as that provided in Spanish regulations, it is quite similar to what it offers and is equally valid.<\/p>\n Once this information is obtained and registered by the company within 60 days from the appointment of its corporate secretary, it must be communicated to the SSM through the Electronic Beneficial Ownership System (e-BOS System), which can be accessed via the SSM4U Portal<\/a>. Additionally, it must be kept by the company for a period of seven years from the date the person in question ceases to be a beneficial owner, as is done under Spanish regulations, with the only difference being that in the Spanish case, this period is ten years instead of seven.<\/p>\n These obligations affect all types of companies, whether Malaysian or foreign, as provided by the new article 573A, which specifies in its subsection (a) that any reference in the new Act to \u00abcompany\u00bb should be interpreted to include \u00abforeign company\u00bb as well. This concept, according to the Companies Act A777, encompasses all companies that, incorporated or registered in a foreign country, wish to do business in Malaysia, in which case they must register with the SSM, after which they can operate under the format of a branch, dependent in all respects on the parent company.<\/p>\n Non-compliance with the aforementioned obligations would result in a fine of 50,000 ringgit, which, in the event that the information provided is false or misleading, could reach up to 3,000,000 ringgit.<\/p>\n Antonio Vi\u00f1al The scope and content of the amendment to the malaysian companies act 2016 The Malaysian Companies Act 2016 (Act A777) has recently been amended by a new regulation (Act A1701). This regulation modifies certain articles of the former, particularly those affecting beneficial owners (\u00abBeneficial Owners (BO)\u00bb) of companies or the concept of these companies, through […]<\/p>\n","protected":false},"author":1,"featured_media":2371,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[104],"tags":[693,1678,1893],"class_list":["post-2374","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-malaysia","tag-business-project","tag-company-regulations","tag-socie-en"],"_links":{"self":[{"href":"https:\/\/spain-asean-dispatch.com\/index.php\/wp-json\/wp\/v2\/posts\/2374","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/spain-asean-dispatch.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/spain-asean-dispatch.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/spain-asean-dispatch.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/spain-asean-dispatch.com\/index.php\/wp-json\/wp\/v2\/comments?post=2374"}],"version-history":[{"count":1,"href":"https:\/\/spain-asean-dispatch.com\/index.php\/wp-json\/wp\/v2\/posts\/2374\/revisions"}],"predecessor-version":[{"id":2375,"href":"https:\/\/spain-asean-dispatch.com\/index.php\/wp-json\/wp\/v2\/posts\/2374\/revisions\/2375"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/spain-asean-dispatch.com\/index.php\/wp-json\/wp\/v2\/media\/2371"}],"wp:attachment":[{"href":"https:\/\/spain-asean-dispatch.com\/index.php\/wp-json\/wp\/v2\/media?parent=2374"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/spain-asean-dispatch.com\/index.php\/wp-json\/wp\/v2\/categories?post=2374"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/spain-asean-dispatch.com\/index.php\/wp-json\/wp\/v2\/tags?post=2374"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}The corporate definition of beneficial owners and ultimate beneficial owners<\/h2>\n
The communication to the Registry of information on beneficial owners and ultimate beneficial owners<\/h2>\n
The companies affected by these obligations<\/h2>\n
The penalties for non-compliance with these obligations<\/h2>\n
\nLawyer
\nAVCO Legal<\/a>
\nmadrid@avco.legal<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"