SC Issues Guide For VC’s And PE Fund Managers On Local Policies

The Securities Commission Malaysia has issued the first edition of the ‘Practical Guide on Venture Capital and Private Equity in Malaysia’ which is expected to equip prospective venture capital (VC) and private equity (PE) fund managers, service providers and investors with in-depth practical knowledge to navigate the Malaysian policy landscape governing VC and PE operations.

SC said the VC and PE are important components of the alternative financing ecosystem in the Malaysian capital market. They play an essential role in nurturing promising startups and high growth enterprises, which are key to catalyse innovation, opportunities for local talent and contribute to the growth of the Malaysian economy.

Key contents of the Guide include information on local capital market regulations pertaining to the VC and PE industries, foreign exchange policy, tax matters, fund structuring considerations and other areas critical to fund operations. The issuance of the Guide is part of the SC’s efforts to fostering a more dynamic private market sector under the Capital Market Masterplan 3. It will enhance the role of professional fund managers and cultivate a more vibrant investor base capable of
channelling investments into startups and high growth micro, small and medium enterprises (MSMEs).

This initiative actually aligns with the regulator’s broader efforts to deepen market-based financing avenues for MSMEs and mid-tier companies (MTCs). The Guide also supports the national KL20 agenda to establish Malaysia as a leading startup ecosystem globally by providing practical guidance for prospective fund managers and investors seeking to establish or expand their presence in Malaysia.

In 2023, the total fund commitments for VC and PE totalled RM17.85 billion, up from RM16.08 billion in 2022. VC and PE investments accounted for RM5.9 billion of total funds raised in Malaysia’s capital markets between 2017 and 2023.

This Guide is part of SC’s collaboration with Bank Negara Malaysia, Labuan Financial Services Authority, Malaysian Venture Capital and Private Equity Association and EY Tax Consultants.

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