Understanding the Equity Crowdfunding in Malaysia

Posted by We Corporate on January 17th, 2022

Equity crowdfunding (ECF) emerged as an alternative for Small and Medium Enterprises as well as start-ups (Issuer) to raise funds by selling securities to the public by using online portal-based platform (ECF Platform). Individuals who invest in the company are called equity-holder (Investor).

Ever since the introduction of regulatory framework of ECF by Securities Commission in 2015, the number of funds raised through ECF platform has increased each year and so do issuers who have successfully reached the fundraising target. However, the funds raised declined in 2018. 

Is equity crowdfunding legal in Malaysia?

In Malaysia, the Securities Commission of Malaysia (SC) is the regulatory body regulating ECF related activities. Companies with the intention to obtain fundraising through equity crowdfunding can only do so with platforms licensed by the SC. These platforms are called Recognised Market Operators.

Examples of Recognised Market Operators (RMO)

1. Ata Plus Sdn Bhd
2. Crowdo Malaysia Sdn Bhd
3. Ethis Ventures Sdn Bhd
4. Eureeca SEA Sdn Bhd
5. FBM Crowdtech Sdn Bhd
6. Fundnel Technologies Sdn Bhd
7. MyStartr Sdn Bhd
8. Pitch Platforms Sdn Bhd
9. iPivot Sdn. Bhd.
10. Leet Capital (1337 Ventures)

Who can raise money via equity crowdfunding?

Only Malaysia incorporated private companies and limited liability partnerships (excluding exempt private companies) will be allowed. Companies hosted on the RMO are called the Issuer.

How much can an issuer raise through equity crowdfunding?

An Issuer can raise up to RM10m via equity crowdfunding. This however does not include the company’s own contribution or fundings obtained through private placement exercise.

Learn more about Equity Crowdfunding in Malaysia at this WeCorporate blog.