Cases & Deals

The Securities Commission (“SC”) revised and enhanced Guidelines on the Registration of Venture Capital and Private Equity Corporations and Management Corporations issued by the SC on 28 November 2022 (‘Guidelines’) to encourage greater investments in Malaysian businesses.

 

The key changes brought about by the Guidelines are:

(a) it is no longer mandatory for a venture capital corporation (“VCC”) to be registered with the SC unless it is acting or offering to act as an investment manager or co-investment manager of a venture capital or private equity fund;

 

(b) the requirement for responsible person for private equity corporation (“PEC”) or private equity management corporation (“PEMC”) has been reduced from 2 to 1;

 

(c) there is no longer a limit of 50 investors for venture capital and private equity funds;

 

(d) streaming the minimum net assets requirement for VCC, venture capital management corporation (“VCMC”), PE and PEMC to RM100,000.

 

In tandem with the revision to the Guidelines, the SC also revised the Venture Capital Tax Incentives Guidelines on 28 November 2022 to encourage investments into the Malaysian start-up ecosystem. The suite of tax incentives includes:

(a) income tax exemption on all sources of qualifying income other than interest income arising from savings or fixed deposits and profits from Shariah-based deposits for VCC;

 

(b)income tax exemption for VCMC on:

     i. share of profits;

     ii. management fees; and

     iii. performance fee including performance bonus and carried interest.

received from a VCC certified by the SC;

 

(c) income tax deduction on the amount of investments made in—

     i. qualified VCCs, up to RM20 million per annum; or

     ii. qualified venture companies.

 

Yeat Soo Ching and her team provided legal support services and advice to various funds on their investments into Malaysian companies. Recent transactions include investments by:

 

(a) Gobi Dana Impak Ventures L.P into My Care Concierge Sdn Bhd, a company which provides on-demand live-in and day care services to senior citizens, post-hospitalisation care and physiotherapy services;

 

(b) Superseed II Ventures (Malaysia) Sdn Bhd into Speedrent Technology Sdn Bhd, a company operating an online platform to facilitate rental transactions between landlords and tenants;

 

(c) Superseed II Fund, LP into Lapasar Sdn Bhd, a company which operates a B2B online marketplace named Lapasar.com, which allows businesses to purchase products on the online platform; and

 

(d) Samsung Venture Investment Co., Ltd into Health Digital Technologies Sdn Bhd, a company which is involved in provision of technology platform to facilitate telemedicine consultation, medication delivery and other value-added services including but not limited to healthcare management programs, leads generation and healthcare protection.