Nominee director services

A1: No, a nominee director does not manage or participate in the operations of your company

A nominee director is not a signatory on the company’s bank accounts and does not play a significant role in the company’s business activities. The nominee director will only serve as a director to meet local statutory requirements (for example, the company must appoint a local resident director). Your company operators will be fully responsible for daily business activities and managing the company’s bank accounts

A2: Company directors must comply with the legal obligations under the Malaysian Companies Act and will be held accountable. Non-compliance with statutory requirements is illegal and can lead to fines or legal action

A4: The deposit is not the same as our service fee or any other charges. During the period we provide nominee director services, your deposit is held temporarily by us. We will refund the deposit to you immediately after the termination of our nominee director services

We understand that some companies in the market do not charge a deposit; however, it is important to note that they often outsource their nominee director services, which can pose long-term risks (such as the nominee director discontinuing services or disappearing)

We require a deposit because all directors (including nominee directors) have significant responsibilities. If the foreign client cannot be contacted, the nominee director may need to cover the company’s liquidation costs. Our nominee director services are provided by reputable and trustworthy professionals

Choosing a local nominee director in Malaysia largely depends on your business needs. Mismanagement can lead to the following consequences:

1. All directors must sign company documents, even minor changes; however, if the nominee director does not appear for signing
2. A nominee director with a poor credit rating could affect the company’s operations
3. A nominee director with an unverified background may lead to non-compliance with government regulations, resulting in fines of up to RM 2,000 or more
4. Disputes over company authority and shares

A6:

This is because the responsibilities of the nominee director are greater when your company is registered for GST or employs local and foreign employees, thus requiring a higher deposit amount

– For GST-registered businesses, taxes must be paid within one month after the end of the tax period (monthly or quarterly). Failure to pay or delayed payments may result in fines
– Employers who do not pay, underpay, or delay payment of Employees’ Provident Fund (EPF) contributions may face more severe penalties
– Employers must fulfill responsibilities under income tax laws, such as monthly withholding tax, employer-related tax reporting (e.g., Form E), and tax clearance for foreign employees. Non-compliance may lead to stricter penalties

# Companies with an expected annual turnover exceeding RM500,000 and/or intending to voluntarily or mandatorily register for GST need to pay a higher deposit. Companies anticipating revenues over RM500,000 must apply for GST registration

A7: Yes, you can terminate the nominee director services at any time

Provide us with details of another local resident director, and you can terminate our nominee director services at any time. We will handle the necessary paperwork and submit it to the authorities, and your deposit will be refunded

A8:

A power of attorney is a legal document that grants a designated person the authority to act on behalf of the company. The document specifies the terms of the appointment and allows the lawyer to act on behalf of the company without the need for a director

In most cases, an executive director (foreign national) can represent the company and issue a power of attorney. If a nominal director is required to issue the power of attorney, the reasons need to be understood, and an authorization plan should be developed. Generally, a nominal director should not be involved in the company’s operations

After issuing the power of attorney, the director still has responsibilities. Therefore, the nominal director needs to conduct some checks before issuing the power of attorney. For verification purposes, the following information about the lawyer is required:

•  Copy of the lawyer’s passport, proof of foreign residence address, and ID copy (if available)
• Lawyer’s contact phone number and email
• Personal bank reference letter/recent 2-month bank statement
• Reference letter from the lawyer’s current employer
• Purpose of issuing the power of attorney
• Reason for needing the power of attorney from the nominal director instead of the company’s executive director

A9: Since a nominal director does not participate in your business operations, if your business needs to apply for a license, our nominal director must withdraw when you are ready to apply for that license

Most license applications need to be signed and submitted by local key executives/directors, so you need someone (a Malaysian citizen, Malaysian permanent resident, or work permit holder) to act for your company and apply for the license. Most businesses do not need a specific business license or permit, but some do because they are regulated and approved by specific agencies, including private schools, travel agencies, alcohol distributors, lenders, banks, childcare centers, etc

A10: For foreign nationals hiring our nominal director services to establish a company in Malaysia, Reign Global Services may require the following additional information (if needed) to set up a Malaysian company:

– Personal bank reference letters/recent 2-month bank statements for directors, shareholders, and beneficiaries
– For self-employed individuals, provide information about the director’s, shareholder’s, and beneficiary’s current business/company (e.g., company website, brochures, registration certificate, company profile, bank statements, and latest financial statements)
– If directors, shareholders, and beneficiaries are employed, provide information about their current employment (confirmation letter or proof from current employer or employment contract, and latest personal income tax assessment)
– Estimated annual turnover for the Malaysian company. Provide estimated details of income from Malaysia and overseas
– Whether the business operations will be conducted in Malaysia. If not, whether a Malaysian bank account is needed
– Purpose of setting up the company in Malaysia (e.g., business operations/investment holding/other purposes)
– Whether you will hire local employees in Malaysia after the company is established

If the client has an agent handling the process, the additional required information is as follows:

– Contact details of the agent (name, phone number, email, etc.)
– Copy of the agent’s passport, proof of foreign residence, and ID copy (if available)
– Copy of the agent’s registration documents, including company registration certificate, employment verification, or equivalent documents, if any
– Copy of the power of attorney authorizing the agent to act on behalf of the client

Before accepting the appointment as your nominal director in Malaysia, we require the above documents and information as part of our due diligence verification. This will facilitate a smoother process for opening a bank account