Tips To Appoint Nominee Director In Malaysia

  • Post category:Malaysia

The Malaysia Business Act mandates that every company have at least one director whose primary residence is in Malaysia.

Foreigners may want to appoint a local nominee director to act on their behalf in regard to all compliance issues. A Malaysia yearly return must be submitted to The Companies Commission of Malaysia (SSM), and Malaysia corporate tax returns must be filed with Lembaga Hasil Dalam Negeri Malaysia (LHDN).

Many government officials still choose to converse in Malay even though the majority of Malaysians can speak English. When speaking with government representatives, it can be useful to have a nominee director who is bilingual.

For more information about the process, refer to our guide on appointing a nominee director in Malaysia.

Tips To Appoint Nominee Director In Malaysia


Following Companies Act Malaysia

Following the Malaysian Companies Act is essential. The Act lays out the requirements for directorship, eligibility, and responsibilities. Make sure you understand and follow by these regulations to prevent legal problems.

Creating a nominee director agreement

Make a detailed agreement describing the duties, limitations, and payment of the nominee director. This agreement serves as a form of legal protection and a summary of the parties’ expectations.

Understanding the role of a nominee director

Understanding the duties of a nominated director is essential. In Malaysia, a nominee director is typically used to fulfill legal obligations while staying out of operational and decision-making roles.

Choosing a local resident

In Malaysia, candidates for director must be citizens of the country. In order to avoid any legal issues, make sure that the person you select fits this requirement. 

Also, see if the nominee director fits other requirements, such as being 18 years or older, having no criminal records, etc.

Updating the nominee director

Even if a nominee director might not be fully involved in day-to-day operations, keep them updated on important business decisions and developments. Transparency prevents misunderstandings and potential conflicts.

Establish effective communication

Establish a reliable line of communication between your company’s management and the nominee director. By doing this, it is guaranteed that administrative issues, such as document signing and compliance updates, will be handled efficiently.

Regular assessment

Make sure the nominee director arrangement is up to date with all new rules by reviewing it frequently. See if the arrangement also satisfies the changing needs of your business.

Protections and Liabilities

Clearly state the scope of the nominee directors’ liability and protections, such as insurance and indemnification.

Ensure that the nominee for the position of director is aware of any potential financial and legal concerns.

Due Diligence

Conduct a thorough background check on the suggested director before hiring them. Verify their reputation, career background, and any potential conflicts of interest. By doing this, you maintain the integrity of your business operations.

Exit Procedure

The criteria and procedures for removing the nominee director once their services are no longer required should be outlined in an exit strategy.

Choose a respected Nominee Service Provider

If you require a nominee director service, do your research and pick a respected firm with a history of compliance and moral behavior. Check out their background, references, and endorsements.

Reach out to us at Relin Consultants – Leading Global Business Set Up Partners for further assistance with choosing the right nominee director for your business.