Chapter 3: Company Setup & Localization

Before filing with the SC, you need a qualified legal entity. This chapter is about “getting the applicant itself ready.”

3.1 Incorporate a Sdn Bhd (private limited company)

Register via SSM (Companies Commission of Malaysia), online through MyCoID.

Item	Requirement
Company type	Private Limited Company (Sdn Bhd)
Min shareholders	1 (individual or corporate)
Min directors	At least 1 director resident in Malaysia
Company secretary	Must appoint 1 licensed company secretary (within 30 days)
Registered address	Local registered office in Malaysia
Name approval	Name search & reservation first

Note: SSM’s “minimum paid-up capital” is nominal — separate from the SC’s RM 5M shareholders’ funds, which is the real DAX threshold.

3.2 Ownership structure & foreign investment

flowchart TD UBO[Ultimate Beneficial Owner] --> Hold[Controlling shareholder] Hold --> SB[Malaysia Sdn Bhd
DAX applicant] SB --> Ops[Local operations team] SB --> Comp[Compliance & AML functions]

• The SC reviews through to the UBO; ownership must be clear and traceable.
• Foreign shareholding may trigger extra approvals or local-equity requirements — consult local counsel on specific percentages.
• Avoid complex multi-layer offshore structures; they slow the fit-and-proper review significantly.

3.3 Substantive local presence

The SC does not accept “shell company, operated remotely.” You need:

• A real Malaysian office.
• A local core team: at least compliance, AML, and tech operations roles onshore.
• Local banking relationships (see Chapter 7).
• Local data/system deployment or compliant hosting arrangements (see Chapter 6).

3.4 Required appointments

• Auditor: statutory audit + any SC-required special audits.
• Company Secretary: licensed, local.
• Legal counsel: a local firm fluent in CMSA and SC guidelines.
• Tax advisor: income tax, service tax (see Chapter 8).

3.5 Corporate governance documents

Prepare these in advance — the SC application will need them:

• Company Constitution.
• Board authority and org chart.
• Risk-management policy and compliance manual.
• Conflict-of-interest and related-party policies.
• Information security and data protection policy (compliant with PDPA 2010).

Summary / action items

• Incorporate the Sdn Bhd via SSM; appoint local director and company secretary.
• Design and document a clear ownership structure (with UBO traceability).
• Establish a local office and core team.
• Appoint auditor, legal counsel and tax advisor.
• Draft the governance & policy document pack.

➡️ Next: Application Process