Preference Shares: A Path Through Malaysia’s Equity Restrictions
- By : Wong Mei Ying
- Category : Linkedin Post, Mergers and Acquisitions, Regulatory
Regulatory equity restrictions don’t always mean “no entry” for investors in Malaysia.
If you’re restricted from holding ordinary shares in certain sectors due to regulatory policy, preference shares may offer a practical alternative.
You may want to consider preference shares if:
1. The sector has no restrictions on preference shares. This is often not stated in guidelines and requires checking with the relevant authorities.
2. You are comfortable receiving only the economic interest (via dividends) without management participation.
3. You want priority over ordinary shareholders for repayment of capital if the company is wound up.
Preference shares alone are not enough. Their effectiveness depends on the structuring, shareholders’ agreements and governance framework that support them.
As a corporate lawyer, I work with investors and companies in Malaysia to navigate equity restrictions by structuring share capital, drafting shareholders’ agreements, and developing exit strategies that balance commercial objectives with regulatory compliance.
This post was first posted on LinkedIn on 21 August 2025.
