Regulating Beneficial Ownership: Lessons for Malaysia from the United Kingdom Framework

This research examines the legal frameworks governing beneficial ownership in Malaysia and the United Kingdom (UK) against the backdrop of growing global concern over opaque corporate structures and their misuse in financial crimes. Malaysia’s Companies (Amendment) Act 2024 introduces significant reforms aimed at enhancing beneficial ownership regulations. However, challenges persist, including limited enforcement, reliance on self-reporting, and the absence of reported enforcement actions, raising doubts about its effectiveness. By contrast, the UK has developed a more mature regime anchored in the Companies Act 2006 and strengthened by the Economic Crime Acts 2022 and 2023, with its public register of Persons with Significant Control (PSC) serving as a model for transparency and accountability. The study assesses how Malaysia’s reforms align with international best practices and examines its regulatory and enforcement mechanisms relative to the UK system. A qualitative methodology is employed, combining doctrinal legal analysis of key statutes, such as the Companies Act 2016 and the UK’s Companies Act 2006, with semi-structured interviews conducted with relevant stakeholders. Findings indicate that Malaysia’s framework remains weakened by the lack of independent verification, consistent enforcement, and public accessibility, thereby undermining deterrence against financial crimes. In contrast, the UK regime, despite its limitations, demonstrates stronger institutional coordination and accountability. The study recommends enhanced verification processes, inter-agency cooperation, and greater public access to registers to strengthen Malaysia’s compliance with FATF Recommendation 24 and enhance transparency.