Shareholding structure is the overall arrangement of how much each shareholder holds, what class of shares they hold, and whether shares are held through one or more layers of holding companies. The initial framework is set at company registration, but it has long-term effects on control, profit distribution and future funding.
What should you consider when designing a shareholding structure?
- Control: the voting thresholds set by law for ordinary and special resolutions (more than 50% and at least 75% of votes cast)
- Share classes: differences between ordinary and preference shares in voting rights and dividends
- Tax and profit distribution: how different structures affect dividends and reinvestment
- Future funding: leaving room to bring in new investors or an employee share scheme
Are there extra restrictions on foreign shareholding?
Most industries in Malaysia allow 100% foreign ownership, but some regulated industries impose foreign equity caps or require a local shareholder. Cross-border investors should clarify the rules for their industry before designing their structure, to reduce the risk of having to restructure later.
Does a shareholding structure need to be put in writing?
Once a company has more than one shareholder, relying on verbal understandings alone is risky. Many companies use a shareholders' agreement to set out contribution, profit-sharing, decision-making and exit terms clearly. A well-designed structure, put in place from the start, often prevents disputes later, for example during cross-border investment or fundraising.
This content is for general reference only and does not constitute legal or tax advice. For your own situation, please book a consultation so that GXY's advisory team can advise on your actual circumstances. Last updated: 20 August 2026.
