Who Can Be a Director in Malaysia? Eligibility, Residency and Disqualification

By Axecta Management Services, Kuala Lumpur · Last verified: 29 October 2026

The short checklist

Before anyone is named as a director of a Malaysian company, check five things against the Companies Act 2016.pdf):

1. The person is a natural person (not a company) aged at least 18 (section 196(2)).
2. The company will have the minimum number of directors: one for a private company, two for a public company (section 196(1)).
3. The minimum number of directors ordinarily reside in Malaysia (section 196(4)).
4. The person is not disqualified under section 198 or by a Court order under section 199.
5. The person has consented in writing and declared they are not disqualified (section 201).

The rest of this guide explains each point, what the grey areas are, and how to handle a foreign-owned company.

Minimum number, age and capacity

How many directors

Section 196(1) sets the floor: one director for a private company and two for a public company. Most Sdn Bhd companies are private, so a single-director company is lawful. The Act does not set a maximum number in section 196; any limit would come from the company’s constitution.

Age and natural persons

Section 196(2) says a director shall be a natural person who is at least 18 years of age. A company cannot be a director of another company in Malaysia, although a corporate shareholder can nominate an individual to sit on the board. See nominee directors for how section 217 applies to such appointments.

Alternate and substitute directors

Section 196(4)(b) says the minimum number of directors shall not include an alternate or substitute director. An alternate cannot be used to satisfy the minimum or the residency requirement.

The Malaysian residency requirement

Section 196(4)(a) provides that the minimum number of directors shall ordinarily reside in Malaysia by having a principal place of residence in Malaysia. Reading it with section 196(1), a private company needs at least one such director, and a public company needs two. The Act does not state a minimum number of days per year in the section, so “ordinarily reside” and “principal place of residence” are matters of fact. If you are unsure about a particular person, take advice.

Does the director have to be Malaysian?

Section 196 sets a residence test rather than a citizenship test. A foreign national who has a principal place of residence in Malaysia can be the resident director. Immigration and work-pass rules are separate and sit outside the Companies Act; confirm what applies to the individual with the relevant immigration authority.

Foreign-owned companies

A foreign shareholder can usually appoint themselves as one director, provided at least one other director (or themselves) meets the residency test. Many foreign-owned companies appoint a Malaysian resident director for this reason. The role carries the full duties in directors’ duties and the exposure described in director personal liability, so choose someone who will take it seriously and understand the commercial arrangements. Banks also ask about directors and signatories; see bank account opening for foreign-owned Sdn Bhd.

Who is disqualified: section 198

Section 198(1) says a person shall not hold office as a director, or be concerned in or take part in the management of a company, directly or indirectly, if the person:

• is an undischarged bankrupt;
• has been convicted of an offence relating to the promotion, formation or management of a corporation;
• has been convicted of an offence involving bribery, fraud or dishonesty;
• has been convicted of an offence under sections 213, 217, 218, 228 and 539; or
• has been disqualified by the Court under section 199.

Section 198(2) says the first four circumstances apply whether the bankruptcy or conviction occurred in or outside Malaysia. So an overseas fraud conviction counts.

Getting back in

• A person disqualified as an undischarged bankrupt may be appointed or hold office with the leave of the Official Receiver, or of the Court on application after notice has been served on the Official Receiver (section 198(3)).
• A person disqualified for the convictions or a Court order may be reappointed with the leave of the Court (section 198(4)).
• Anyone applying to Court must give the Registrar at least 14 days’ notice (section 198(5)).
• Under section 198(6), leave of the Court is no longer required after five years from the conviction, or from release from prison if imprisoned, for the conviction-based and Court-order grounds.

Penalty

Section 198(7).pdf) makes contravention an offence: imprisonment up to five years, or a fine up to RM1 million, or both.

Court disqualification: section 199

On the Registrar’s application, the Court may disqualify a person for up to five years from the date of the order if, within the last five years, they were a director of two or more companies that went into liquidation because of insolvency due to their conduct, or because of a contravention of directors’ duties, or habitual contravention of the Act. The Registrar or Official Receiver must give at least 14 days’ notice of the intention to apply. Under section 200 the Registrar can remove the name of a person disqualified under section 198 or 199 from the register.

Eligibility comparison

Step-by-step: vetting and appointing a director

1. Confirm identity and age from the passport or identity card.
2. Ask for a written declaration on bankruptcy, convictions and Court orders. Section 201 requires the written consent and a declaration of non-disqualification before appointment.
3. Check bankruptcy status. The Malaysian Department of Insolvency’s e-Insolvency portal lists an individual bankruptcy status search among its services; fees and steps are on the portal.
4. Check other directorships. SSM sells a “Personal Involvement in Companies” search by identity number on its company information page; the register must show other directorships of public companies and their subsidiaries.
5. Confirm residence if the person is meant to be the resident director.
6. Pass the resolution and give notice to SSM using the section 58 notification (see SSM’s updating company information page). See appointing and removing directors.

Validity of acts despite a defect

Section 204.pdf) says the acts of a director, manager or secretary remain valid notwithstanding any defect discovered after appointment or in their qualification. This protects outsiders who dealt with the company in good faith. It does not shield the person: appointing or acting while disqualified is still an offence under section 198(7), and the Registrar can remove the name.

Illustrative scenario

A UK entrepreneur sets up a Sdn Bhd with 100% foreign ownership and no Malaysian residence. She names herself as the only director. That would not satisfy section 196(4). She appoints a Malaysian-resident director (who must pass the section 198 checks and consent under section 201) alongside herself. The resident director attends board meetings, reviews the accounts, and signs the same declarations. The arrangement works because both directors know their roles and the resident director is a real participant, not a name on a form.

Common mistakes

• Naming a non-resident as the only director of a private company.
• Appointing a person without recording their written consent and declaration.
• Counting an alternate director toward the minimum.
• Skipping the bankruptcy check on a new director, then discovering the issue at the bank.
• Letting a disqualified person keep acting as a “consultant” who in practice runs the company, which section 198(1) also catches through “concerned with or takes part in the management”.
• Forgetting to file the change with SSM within 14 days.

How Axecta helps

Axecta’s incorporation team checks eligibility, prepares consents and declarations, and files the director particulars when a company is incorporated. If your company needs a locally resident director, we can discuss the options and the duties involved. See also how to register a Sdn Bhd and documents needed to register a company.

Next steps

1. Decide how many directors you need and who will be the resident director.
2. Collect IDs, addresses and signed consents with declarations.
3. Run the bankruptcy check.
4. Agree who will keep the register of directors and file changes.
5. Brief each director on their duties before they sign.

Frequently asked questions