To Act As Holding Company Companies in Malaysia

A holding company is a company that owns other companies' outstanding stock. A holding company usually does not produce goods or services itself; rather, its purpose is to own shares of other companies to form a corporate group. Holding companies allow the reduction of risk for the owners of the companies and provide a way to consolidate the companies.

In Malaysia, a holding company can be either a public company or a private company. A public company must have a minimum paid-up capital of RM2.5 million, while a private company must have a minimum paid-up capital of RM500,000.

A holding company in Malaysia must comply with the Companies Act 1965 and the Companies Commission of Malaysia (CCM) Guidelines on Establishment of Holding Companies. The Guidelines state that a holding company must have at least three subsidiary companies, with at least two of the subsidiaries being located in Malaysia.

The shares of the subsidiary companies must be held by the holding company directly, and the holding company must have control over the management and affairs of the subsidiary companies. The Guidelines also state that the holding company must prepare consolidated financial statements.

The purpose of a holding company is to provide a centralised management for a group of companies, and to allow the companies to pool