The Securities Commission Malaysia (SC) has published the first edition of the ‘Practical Guide on Venture Capital and Private Equity in Malaysia’.

This guide aims to equip prospective venture capital (VC) and private equity (PE) fund managers, service providers, and investors with in-depth practical knowledge to navigate Malaysia’s policy landscape for VC and PE operations.

In his opening remarks at the launch, SC Chairman Dato’ Seri Dr. Awang Adek Hussin emphasised the importance of corporate innovation for companies to remain competitive and relevant.

He announced the launch of the guide, which will help readers understand the operation of VC and PE fund management in Malaysia.

Establishing strong foundations is important for the success of corporate innovation programmes and fostering sustained engagement with the startup community, Dr. Awang Adek highlighted.

The SC’s efforts in promoting corporate innovation align with the broader strategy to develop a comprehensive market-based financing spectrum for corporates and SMEs, supporting the objectives of the KL20 Action Plan.

Key contents of the guide include information on local capital market regulations, foreign exchange policy, tax matters, fund structuring considerations, and other areas critical to fund operations.

This initiative is part of the SC’s broader efforts to enhance the private market sector under the Capital Market Masterplan 3, aiming to strengthen professional fund managers and foster a vibrant investor base for startups and high-growth micro, small, and medium enterprises (MSMEs).

The guide provides detailed information on registration requirements for VC and PE firms, including financial requirements, personnel criteria, and reporting obligations.

It also outlines the exemptions and activities that do not require registration, such as corporate venturing units and government programs.

The SC conducted a Corporate Innovation Survey to gauge the state of innovation among Malaysian corporates.

The respondents of this survey represent approximately 36% of the FBM 100 Index’s market capitalisation, or RM482 billion.

Among the key observations, 70% of the respondents believe their company is reasonably well-prepared for innovation.

The issuance of the guide supports the national KL20 agenda to establish Malaysia as a leading startup ecosystem globally by providing practical guidance for fund managers and investors looking to establish or expand their presence in Malaysia.

The VC and PE industries in Malaysia have shown steady growth, with total fund commitments reaching RM17.85 billion in 2023, up from RM16.08 billion in 2022.

Investments in these sectors accounted for RM5.9 billion of total funds raised in Malaysia’s capital markets between 2017 and 2023.

This guide, a collaborative effort with key stakeholders including Bank Negara Malaysia, Labuan Financial Services Authority, Malaysian Venture Capital and Private Equity Association, and EY Tax Consultants, will be available for free on the SC’s website here.

Dato’ Seri Dr. Awang Adek Hussin, who has made several invaluable contributions to the Malaysian capital market, will be retiring effective 15 June 2024.

He will be succeeded by Dato’ Mohammad Faiz Azmi, former Executive Chairman of PwC Malaysia and an SC Board Member since August 2023.