Under Section 196(4) of the Companies Act 2016, every private limited company (Sendirian Berhad / Sdn. Bhd.) must have at least one director who ordinarily resides in Malaysia, meaning the individual has a principal place of residence in Malaysia.
In addition, all directors must meet the following criteria:
Must be a natural person who is at least 18 years of age.
Must not be an undischarged bankrupt.
Must not have been convicted (whether within or outside Malaysia) of any offence:
Related to the promotion, formation, or management of a corporation.
Involving fraud or dishonesty punishable with imprisonment of three months or more.
Under Section 213, 217, 218, 228 or 539 of the Companies Act 2016, within the past five years.
A nominee director is a person appointed to fulfil the statutory residency requirement under the Companies Act 2016, particularly for companies where all shareholders or directors are foreigners and do not reside in Malaysia.
It is legally permitted to appoint a nominee director, as long as the individual meets the Companies Act requirements mentioned above.
At C&G, our nominee director service is strictly statutory and non-executive in nature. This means:
The nominee director will not be involved in your company’s daily business operations.
The nominee director will not have any authority over banking matters, financing arrangements, or credit facilities.
The nominee director will not represent the company for applications, licensing, or any commercial transactions.
The nominee director’s role is solely to ensure compliance with the Companies Act’s requirement for a local resident director.
This arrangement safeguards the business independence of the client while ensuring the company remains compliant with Malaysian law.
You may consider engaging a nominee director if:
You are a foreign individual or investor who wishes to incorporate a Sdn. Bhd. in Malaysia but do not have a local resident director.
You are setting up a wholly foreign-owned company and require a local director purely to meet statutory requirements.
In summary, a nominee director service provides foreign clients with a legally compliant, safe, and practical solution to meet Malaysia’s local residency requirement, while keeping full control of the company’s operations, banking, and decision-making in the hands of the actual business owners.
Malaysia
