Malaysia became a pioneer among ASEAN countries to have laws governing crowdfunding, as the nation’s Parliament passed a Bill to legalise the alternative funding practice.
The Parliament, had on Wednesday, passed the amendments in the Capital Markets and Services Bill 2015 to regulate crowdfunding activities.
The Bill, which was passed after two rounds of debates by Senators will protect the interest of crowdfunding investors and companies, local media The Star reported.
Any fraud committed in crowdfunding activities would fall under Section 179 of the Capital Markets and Services Act, which carries a jail term of not more than 10 years and a minimum fine of MYR1 million.
Deputy Finance Minister Ahmad Maslan said six local companies registered with the Securities Commission, have been approved to carry out equity crowdfunding activities.
“We encourage the use of equity crowdfunding and hope that more people will use it. The purpose of today’s passing of the Bill is to regulate and protect the interest of investors and companies,” Ahmad Maslan said at the Parliament lobby.
Under the Bill, private companies with a paid-up capital of not more than MYR 5 million and with a strong business plan can now fund their ventures through crowdfunding.
The amount of capital collected through crowdfunding is limited to MYR 5 million, while small and medium enterprises can crowdfund an amount of up to MYR 3 million in a year.
For investors, the maximum investment amount is limited to MYR 5,000 for each company and MYR50,000 a year for the total amount of crowdfunding investment.