If you are planning to open a business in Malaysia as a foreigner, it is a big advantage to your business to apply a nominee director. In this article we will explain the importance to have a nominee director in Malaysia.
What is Nominee Director ?
Nominee Director is a local individual appointed by the company to act as a local director for the company.
All individual acting as directors, including nominee director for a company have big responsibilities. For example, in case other directors of the company have become unavailable or leave the company / business, the nominee director remaining in the country have to bear all liabilities left by other directors.
What does a Nominee Director Do?
Nominee director is a professionally appointed individual hired by a company usually by foreign shareholders to meet certain compliances in running a business in Malaysia. A nominee director is responsible to provide professional support and compliances, attend board meetings, and act in the interest of the nominator company. A nominee director is also allowed to provide bank signatory, upon agreement with other directors.
Why is it important to have a Nominee Director ?
If you are a foreigner and you are planning to start a business in Malaysia, it is important to have a nominee director for certain issues. First, a 100% foreign owned company are required to apply for WRT License with a minimum paid up capital of RM1,000,000 to start some business categories in Malaysia. If you have a local individual appointed as the nominee director being the major shareholder, this requirements will be exempted. Second, having a nominee director will provide you with a more accurate local market analysis based on his/her expertise, experience and insight by being a resident in Malaysia. Third, there are some businesses that could not be conducted if you are a 100% foreign owned company, such as computer shop, low to medium end restaurant and so on . Having a nominee director will allow you to run these businesses with no exemption. Fourth, in order to register a new company in Malaysia it is required to have a residential address with supporting documents (tenancy agreement / utility bill). If you are a foreigner who does not reside in Malaysia, hiring a nominee director will provide you with a local residential address for your business registration.
Who can be a Nominee Director ?
Any Malaysian over the age of 18 can be appointed as a nominee director for a company.