Author name: Edwin Lee

Note: Barring any further amendments to the law, this article should be read in the context of the Bill being passed in its current form as at the time of writing as of 11 July 2024. The Personal Data Protection (Amendment) Act 2024 (“PDPA Amendments in 2024“) is currently at the 1st reading stage in the Malaysian Parliament. It will proceed through further readings and must be approved by both Houses of Parliament before being presented for Royal Assent by His Majesty The Yang di-Pertuan Agong. Therefore, it may take some time before the Bill legally comes into force. Malaysia’s Personal Data Protection Act (PDPA) 2010 (“PDPA”) is set to undergo significant updates aimed at aligning with international standards and strengthening the protection of personal data. Here is an overview of the key proposed changes, comparisons with the current provisions, and our insights on these proposed amendments: Terminology Update Current Position: The term “data user” is used throughout the PDPA. Proposed PDPA Amendments in 2024: The term “data user” will be replaced with the term “data controller”. This proposed amendment aligns Malaysia’s data protection terminology with global standards, such as those used in the General Data Protection Regulation (GDPR), ensuring consistency and facilitating international data protection compliance. New Definitions Current Position: The PDPA currently does not explicitly define “biometric data” or “personal data breach.” Proposed PDPA Amendments in 2024: These amendments aim to provide better clarity in the PDPA, ensuring specific categories of sensitive data and incidents are clearly identified and adequately protected. Enhanced Responsibilities of Data Processors Current Position: Data processors are not explicitly required to comply with the security principle. Proposed PDPA Amendments in 2024: Data processors, who process data on behalf of data controllers, must now comply with the security principle under the PDPA. This amendment requires data processors to implement appropriate technical and organizational measures to protect personal data, thereby ensuring accountability and enhancing overall data protection practices. Increased Penalties Current Position: Penalties for non-compliance include fines up to RM300,000 and imprisonment up to two years. Proposed PDPA Amendments in 2024: The fines for breaches are increased to RM1,000,000, and the maximum imprisonment term is extended to three years. These heightened penalties underscore the seriousness of compliance and aim to deter violations by imposing more severe consequences. Data Protection Officers (DPOs) Current Position: There is no mandatory requirement for the appointment of DPOs. Proposed PDPA Amendments in 2024: Data controllers and processors must appoint one or more DPOs responsible for ensuring compliance with the PDPA. This requirement aligns with international best practices, ensuring that organizations have dedicated personnel to manage and safeguard personal data effectively. Data Breach Notification Current Position: There is no explicit requirement for data breach notifications. Proposed PDPA Amendments in 2024: Data controllers must notify the Personal Data Protection Commissioner of any data breaches as soon as practicable. If the breach causes or is likely to cause significant harm to the data subject, data controllers must notify the affected data subjects promptly. Failure to comply can result in fines up to RM250,000 or imprisonment for up to two years. The form and manner of notification will be further determined by the Personal Data Protection Commissioner. Introducing mandatory data breach notifications ensures timely awareness and response to data breaches. This requirement aligns with international best practices, enhancing transparency and accountability in data protection. Rights to Data Portability Current Position: The PDPA does not currently provide a right to data portability. Proposed PDPA Amendments in 2024: Data subjects can request their personal data to be transferred to another data controller, subject to technical feasibility and compatibility of the data format. This right enhances data subject control over their personal data and facilitates smoother transitions between service providers. Cross-Border Data Transfers Current Position: Section 129 of the PDPA prohibits the transfer of personal data to a place outside Malaysia unless such place is specified by the Minister by notification in the Gazette. No such whitelist has been issued and gazetted thus far. Proposed PDPA Amendments in 2024: Data controllers can transfer personal data to countries that provide adequate protection equivalent to the PDPA. The requirement for the Minister to specify places for data transfers is removed. The amendment shifts the authority from the Minister to the data controller, allowing the data controller to decide on data transfers based on adequacy standards. This change aims to streamline cross-border data flows while ensuring that data transferred internationally is adequately protected. Miscellaneous Amendments Various amendments are proposed to enhance clarity and consistency within the PDPA. These include updates to definitions, procedural changes, and adjustments to ensure the Act remains coherent. Conclusion These Proposed PDPA Amendments in 2024 represent a significant step forward in strengthening Malaysia’s data protection framework. By aligning with international standards and addressing emerging data protection challenges, the amendments aim to provide robust safeguards for personal data and enhance trust in the digital ecosystem. Immediate Action Required Given the significant amendments, it is high time for companies and organizations in Malaysia to look into PDPA compliance seriously. Companies and organizations that already have a PDPA compliance framework will need to update and revise their framework, while those who do not yet have one will need to start implementing these practices within their organization.

In general, the directors of a company have the power and authority to make decisions pertaining to the business of the company. However, it is essential to note that certain transactions require approval from the company’s shareholders, as stipulated by the Companies Act 2016 (“Act”). An instance of this is when the company engages in substantial property transactions with its directors, substantial shareholders, or persons connected with them. This requirement is defined in Section 228 of the Act. Rationale for Section 228 Section 228 is designed to prevent potential abuses, such as self-dealing and asset-stripping, by directors and controlling shareholders. This often occurs through transactions involving acquisition of assets for the company or sale of the company’s assets at non-market rates or on less favourable terms than the company would have received from a bona fide third party. Such actions can be detrimental to the interests of shareholders, given that they are unfairly structured to shift wealth from the company to the interested individuals involved. To address these risks, Section 228 introduces specific procedures that must be observed and complied with by a company when a transaction falls within its scope. Essentially, this section requires shareholders’ approval to be obtained for transactions involving related parties as defined by its provisions. Transactions entered into by a company in contravention of Section 228 shall be void. Identifying Transactions Falling under Section 228 To fall under the umbrella of Section 228, there are 3 elements that must be present: Element 1: Type of arrangements or transactions The type of arrangements or transactions falling under Section 228 contains in two limbs – Section 228(1)(a) and (b). Such arrangements or transactions can take any of the following forms between the company and a related party: “Non-cash asset” means any property or interest in property other than cash. Furthermore, it is clear from Section 228(1)(a) and (b) that the acquisition or disposal of shares or non-cash assets shall be made with the company (Kam Thai Eng Linda & Anor v Tan Sri Dato’ Kam Woon Wah & Ors [2020] 1 LNS 2124). Element 2: Categories of Related Parties                                  Section 228 applies where transactions made by the company are with any of the following related parties: (a) a director (as defined in Section 210 of the Act) of the company or its holding company; or (b) a substantial shareholder (as defined in Section 136 of the Act); or (c) a person connected with the director or substantial shareholder. A “person connected with a director” is defined in Section 197 and includes: This same definition also applies to persons connected with a substantial shareholder. Element 3: Requisite Value Section 228 only applies where the transactions meet the requisite value threshold stated under this section. For public listed companies and their subsidiaries, requisite value shall mean the value as defined in the listing requirements of the stock exchange where shareholders’ approval at a general meeting is required. On the other hand, for private or unlisted public companies, it depends on the value of non-cash assets involved in the transaction. The table below summarises when the prior approval of shareholders is required to be obtained to comply with Section 228: Threshold Value Shareholders’ Prior Approval  Less than RM50,000   No More than RM50,000 and less than 10% of the company’s net assets No More than RM50,000 and more than 10% of the company’s net assets Yes More than RM250,000   Yes The value of the company’s net assets is determined based on the accounts prepared in accordance with Section 245 of the Act for the last financial year preceding the transaction. In cases where no accounts have been prepared prior to the transaction, the value is determined based on the company’s called-up share capital. Exempted Transactions There are exceptions to Section 228. Section 229 identifies various transactions that do not qualify as related party transactions. These exceptions include: For transactions falling within these exceptions, the approval of shareholders is not a prerequisite. When all 3 elements mentioned above are satisfied, the approval of the company’s shareholders in a general meeting must be obtained before the said arrangement or transaction can be carried into effect and valid in law, unless the transaction comes under one of the exceptions provided under Section 229 (Omega Securities Sdn Bhd v. Yeo Lee Hoe [2003] 1 CLJ 276). How is prior approval obtained? If a transaction or arrangement falls within the ambit of Section 228, it must be approved through a resolution passed by the shareholders at a general meeting. The resolution required is an ordinary resolution, and Section 228(1)(A) or (B) specifies that the approval must occur at a general meeting. This means that a member’s resolution in writing is not an option for the purpose of compliance with Section 228. As for the reading of Section 228(1)(A) and (B), the High Court in Kam Thai Eng Linda held that Section 228 only requires shareholders’ prior approval before an arrangement or transaction is ‘carried into effect’, rather than before the transaction is “entered into,” which can be made subject to the shareholders’ approval. The implication is that shareholders are required to provide their approval before the transaction is executed or implemented. However, it is possible for initial negotiations or discussions about the transaction to occur or for the parties to enter into the arrangement before seeking shareholders’ approval, as long as approval is obtained for the company to formally proceed with the transaction and become legally bound by the terms of the arrangement. If the transaction or arrangement benefits a director or substantial shareholder of the company’s holding company, or a person connected with such a director or substantial shareholder, it also necessitates prior approval through a resolution of the holding company (Section 228(2)(b)). In cases where the company involved in the acquisition or disposal is an unlisted subsidiary of a publicly listed company, approval for the same transaction or arrangement is required from the shareholders of the unlisted subsidiary at a

Electronic signatures and digital signatures are often used interchangeably to refer to tools for signing digital documents. Traditionally, signing involved physical documents or objects, such as paper signatures or fingerprints, to indicate that the signer had read, understood, and agreed to the document’s content. Today, technology allows for digital signing by affixing a name, mark, or drawing to a softcopy document, known as an electronic signature or digital signature. Although both terms serve similar purposes, they differ significantly in terms of framework, security, and admissibility. Electronic Signature In Malaysia, electronic signatures are governed by the Electronic Commerce Act (ECA). The ECA defines an electronic signature as any letter, character, number, sound, or any other symbol, or any combination thereof, created in an electronic form and adopted by a person as a signature. Essentially, any individual affixing their “name” to a PDF would be considered an electronic signature. The main purpose of the ECA is to recognize electronic messages in commercial transactions. For an electronic signature to be admissible, it must fulfill the following requirements under the ECA: An electronic signature is considered reliable if: If these requirements in Section 9 of the ECA are satisfied, the electronic signature meets legal standards. However, Section 10 of the ECA specifies that certain documents requiring a seal, such as Powers of Attorney, Wills, Trust documents, and Negotiable instruments (like Bank Cheques), are not admissible with an electronic signature unless affixed by a digital signature under the Digital Signature Act 1997. Digital Signature A digital signature provides a higher level of security compared to an electronic signature. While electronic signatures can be easily faked (e.g., person A signing as person B through impersonation), digital signatures offer enhanced profiling of the signer’s identity. The Digital Signature Act (DSA) 1997 defines a digital signature as the transformation (created using the private key corresponding to the signer’s public key) of a message using an asymmetric cryptosystem. This allows a person with the initial message and the signer’s public key to determine if the message has been altered since the transformation. For a digital signature to be legally binding under Section 62 of the DSA, it must meet the following criteria: In Malaysia, recognized digital signature options certified by licensed certification authorities include: Documents signed with digital signatures from these certified authorities have legal binding effects. However, digital signatures from foreign platforms do not hold the same legal validity due to the lack of appropriate certification by Malaysian authorities. Summary In summary, Malaysian law differentiates between electronic signatures and digital signatures. When a seal is required on a document, Section 10 of the ECA mandates that a digital signature is the minimum requirement. Parties should carefully consider the balance between the convenience of electronic signatures and the legal risks associated with potential challenges to their validity. For documents traditionally requiring a seal, using digital signatures or physical signatures might be more prudent to ensure compliance with statutory requirements and legal security.

In the realm of business, intermediaries and brokers play a critical role in connecting buyers and sellers, facilitating transactions, and ensuring smooth negotiations. However, operating as a broker without a formal agreement can lead to misunderstandings, disputes, and potential legal complications. Therefore, it is essential for intermediaries to sign a brokerage agreement to clearly define the terms and conditions of their engagement. This article explores the importance of brokerage agreements, key components to include, and best practices for drafting and executing these agreements. Importance of Brokerage Agreements A brokerage agreement is a legally binding contract between a broker and their client, outlining the scope of services, payment terms, duties, and responsibilities. This agreement is vital for several reasons: Key Components of a Brokerage Agreement When drafting a brokerage agreement, several critical components should be included to ensure it is comprehensive and effective: Best Practices for Drafting and Executing Brokerage Agreements To create an effective brokerage agreement, consider the following best practices: Conclusion For intermediaries and brokers, signing a brokerage agreement is not just a formality but a crucial step in establishing a clear, professional, and legally binding relationship with clients. By defining the terms of engagement, compensation, and responsibilities, a well-crafted brokerage agreement minimizes the risk of disputes and ensures that both parties’ interests are protected. Brokers should invest time and resources into drafting thorough and precise agreements, leveraging legal expertise, and maintaining transparent communication to foster successful and trustworthy business relationships.

We learned that GDPR applies to Malaysian entities if they are either offering goods or services or monitoring the behavior of individuals in the European Union – Article 3 of the GDPR. Although both the PDPA and GDPR aim to protect an individual’s rights over their personal data and focus on a data subject’s “identifiability” or “identification potential” to decide if the data provided constitutes “personal data,” data subjects within the European Union are afforded greater rights. The GDPR is a more comprehensive and stringent data protection law than the PDPA. It gives individuals more control over their personal data and imposes stricter obligations on organizations that process personal data. To keep pace with technological advancements, the Malaysian Personal Data Protection Department (JPDP) is actively considering significant updates to the current PDPA 2010, which is viewed as outdated. Proposed amendments, outlined in the Public Consultation Paper No. 1/2020, represent a transformative shift towards aligning with the European General Data Protection Regulation (GDPR). Notably, one such amendment aims to extend the PDPA’s jurisdiction to cover data users outside Malaysia monitoring Malaysian data, indicating a move towards GDPR-level data protection standards. In this article, we will delve into the distinctions between the PDPA and GDPR. Territorial Scope and Application The GDPR’s application extends beyond commercial interests to encompass various personal data processing activities, including social, educational, and employment contexts. This comprehensive approach contrasts with the PDPA’s focus primarily on commercial transactions, which could leave non-commercial data processing scenarios under-protected. PDPA Aspect GDPR Applicable only in Malaysia.   Focus on personal data in commercial transactions.   Excludes the Federal Government, State Government, and credit reporting businesses. Applications and Territorial Scope Extra-territorial applicability.   Applies to EU member states, with extra-territorial effect, covering data subjects in the EU. Standard of Consent Required The PDPA intertwines consent with data collection purposes but lacks a clear definition of “valid consent,” allowing for “implied consent.” In contrast, the GDPR mandates that consent be “freely given, specific, informed, and unambiguous,” thus providing clearer guidelines for data controllers. PDPA Aspect GDPR Required consent for data processing but not specified in detail.   Must be recorded and maintained. Standard of Consent Required Consent must be actively given.   Consent must be freely given, specific, informed, and unambiguous. Retention of Data Under the PDPA, data users have flexibility in retaining personal data as long as it remains justifiable. However, the lack of a specific timeframe leaves room for interpretation. Conversely, the GDPR empowers data subjects with the right to request data erasure when data is no longer necessary or consent is withdrawn, imposing stricter obligations on data controllers. Authority Over Personal Data The PDPA grants limited rights to data subjects primarily in restricting processing likely to cause damage or distress and for direct marketing purposes. The GDPR, however, confers broader rights, including data portability, erasure, and the ability to object to data processing. PDPA Aspect GDPR Limited rights.   Right to restrict processing when the processing is likely to cause damage or distress.   Right to prevent processing for the purposes of direct marketing. Authority Over Personal Data Confers data subject greater controls over their personal data.   Right to restrict processing.    Right to object to data processing.   Right to data portability.   Right to erasure. Transborder Transfer of Data The PDPA’s cautious approach to cross-border data transfers, requiring ministerial authorization, aims to enhance data security but creates practical challenges. The GDPR facilitates smoother data flows within the EEA, subject to stringent data protection standards for transfers outside the EEA. PDPA Aspect GDPR Not allowed unless the transfer is authorized by the Minister. Transborder Transfer of Data Free flow of personal data within the EEA (European Economic Area).   Strict restrictions on transfers to third countries without an adequacy decision, safeguards, or exceptions. Accountability and Breach Notification While the PDPA allows for voluntary breach reporting, the lack of a mandatory requirement raises transparency concerns. The GDPR’s robust framework includes mandatory breach reporting within 72 hours, appointing Data Protection Officers, and conducting Data Protection Impact Assessments, ensuring higher transparency and accountability. PDPA Aspect GDPR No specific breach notification requirement. Accountability and Breach Mandatory to report breaches.   Appointment of Data Protection Officer.    Conduct Data Protection Impact Assessment.    Privacy by design.    Requires organizations to report data breaches within 72 hours to relevant authorities. Summary The Personal Data Protection Act (PDPA) in Malaysia and the General Data Protection Regulation (GDPR) in the EU have distinct approaches to data protection. While the PDPA primarily addresses commercial transactions, the GDPR offers a comprehensive framework covering various data processing aspects. These differences emphasize the importance of complying with the specific regulations relevant to your organization to ensure data security and compliance in a global context.

Is electronic signature legally recognised by law? Digital Signature and Electronic signature (E-Sign) may be used interchangeably, to refer a signing tool for signer to sign on a softcopy. Signing is an action to infer that the signer has indeed, read, understand and agreed/approved to the content of a document. Traditionally, signing is done on a physical document or an object when the signer performs stokes on it, this includes fingerprint signing. With the advancement of technology, signing today, can be performed digitally by affixing, name, mark and even drawing to the softcopy which we refer to Electronic Signature or Digital Signature. Although the purpose of both terms meant the same, however, they refer to very different mechanism in terms of framework, security and admissibility. Electronic Signature In Malaysia, Electronic Signature is governed by Electronic Commerce Act (ECA)[1] to refer any letter, character, number, sound or any other symbol or any combination thereof created in an electronic form adopted by a person as a signature. In another word, as long as an individual affixed his “name” on a PDF, that “name” would be regarded as an Electronic Signature. The main purpose of ECA is to recognize electronic messages in commercial transactions. For an Electronic Signature to be admissible, the law requires that where a signature is required, and if the document is in the form of electronic message, an electronic signature must fulfill the following requirements: Subsection 2 also provides that an electronic signature is as reliable as is appropriate if So long as the requirements laid down in Section 9 of the ECA is satisfied, then the requirements of the law on electronic signature is fulfilled. However, Section 10 of the ECA specifically provides that for documents which requires a seal to be affixed, such as Power of Attorney, Wills, Trust documents and Negotiable instrument (Bank Cheques), these documents were specifically mentioned under the Schedule of the Act, must not be admissible by Electronic Signature unless it is affixed by a digital signature as provided under the Digital Signature Act 1997. Here, it clearly shows that our legislature distinguished electronic signature from digital signature. Digital Signature On a technical standpoint, Digital Signature, an enhanced version of Electronic Signature, provides a higher threshold of security measures compared to an electronic signature. Unlike an Electronic Signature, where the true identity of the signer can easily be faked, for instance person A signed the signature of person B through impersonation, Digital Signature provides a higher level of profiling towards the identity of a signer. The Malaysian legislation has also provided the definition of Digital Signature in Digital Signature Act 1997[2], which stated as the transformation (created using the private key that corresponds to the signer’s public key) of a message using an asymmetric cryptosystem such that a person having the initial message and the signer’s public key can be accurately determine whether the message has been altered since the transformation was made. The legislation has provided a much more technical definition to Digital Signature compared to Electronic Signature. In a simpler term Digital Signature is a mathematical scheme for verifying the authenticity of digital messages or documents, which includes the signer and sender. However, Section 62 of the DSA provides a set of requirements for a document to be legally binding: In Malaysia, there is only a few recognized Digital Signature options available which is certified and validatied by licensed certification authorities. They are: This would mean, documents signed by other foreign Digital Signing platform do not have the same legally binging effect since they do not have the appropriate license as the Certification Authority. In summary, when Malaysian law mandates the use of a seal on a document, Section 10 of the ECA stipulates that a digital signature is the minimum requirement. Before opting for either an electronic signature or a digital signature, parties should, especially when dealing with documents that traditionally require a seal, carefully consider the balance between: (i) the convenience of electronically signing documents using e-signature tools, and (ii) the legal risks associated with the potential challenges to the validity or compliance with statutory requirements of such e-signatures. If employing digital signatures in such cases proves to be overly complex or logistically challenging, opting for physical signatures on the document may still be a prudent choice. [1] https://lom.agc.gov.my/ilims/upload/portal/akta/LOM/EN/Act%20658.pdf [2] https://lom.agc.gov.my/ilims/upload/portal/akta/LOM/EN/Act%20562.pdf

Creating an effective Terms of Use (ToU) for your mobile application or website is a crucial step in safeguarding your digital business. A well-crafted ToU not only protects your rights but also outlines the obligations and responsibilities of your users, setting the stage for a transparent and secure online environment. Below, we offer expert tips for drafting a robust ToU, complemented by cautionary tales of companies that faced legal challenges due to inadequate terms. Key Tips for Crafting a Strong Terms of Use Lessons from Historical Missteps Conclusion Drafting a comprehensive and enforceable Terms of Use is not just about legal compliance; it’s about building a trustworthy and secure platform for your users. By clearly defining the terms of engagement, protecting privacy, and setting forth rights and responsibilities, you can foster a positive user experience while safeguarding your business against potential legal pitfalls. Learning from the mistakes of others can guide you in avoiding similar missteps, ensuring your ToU stands as a testament to your commitment to fairness, transparency, and legal integrity. About the author: This article was written by Edwin Lee, Corporate Partner – law firm in Kuala Lumpur, Malaysia. The view expressed in this article is intended to provide a general guide to the subject matter and does not constitute professional legal advice. You are advised to seek proper legal advice for your specific situation.

Having a new business idea is great but finding a suitable funding source is equally as important, and often challenging. Without the backing of stable investments, a business will not be able to achieve its full potential regardless of how appealing the idea is. This article sets out the funding options that entrepreneurs can consider when starting a business. Bootstrapping Bootstrapping is one of the most common ways to fund a startup as you will be required to run your business using your own funds. This could come from personal savings, credit cards or selling assets such as your car or house to generate cash for the purpose of financing your business. This may seem like an easy way to obtain funds but keep in mind, if your business fails to succeed, you may end up with a substantial amount of debt in hand.   Friends and Family Obtaining funds from friends and family is a classic simple option to kickstart a business. Your friends and family are usually supportive and would be willing to help fund your business unlike investors or banks who requires convincing and lots of consideration. However, the downside of this is that there is a risk of relationships being ruined, therefore you should always take steps to prevent this from happening. For example, setting up clear repayment terms and signing an agreement with them. Incubators and Accelerators This became popular in recent years amongst younger entrepreneurs who are seeking funds to start their businesses. These platforms are part communal workspace and part mentorship development centres, where young businesses can get a great start while partnering with some amazing people. Incubators are like a parent to a child, who nurture the business, provide shelter tools, training and network to a business, while accelerators help to run or take a giant leap. However, they are often focused on tech- heavy businesses, so you might struggle to find one that works for your company, if your business is not in the technology space. Winning Contests There has been an increase in the number of contests recently who can help entrepreneurs in fundraising. In order to win these contests, you have to ensure that you have a comprehensive and unique business plan to convince people that your idea is worth investing in. This is very interesting as not only you would be able to gain funds, you will also get some media coverage if you win these contests. Popular contests in Malaysia includes “Young Entrepreneur X Factor”, “MaGIC University Startup Challenge”, “Dream Factory Startup Contests” etc. Get an angel investor on board There has been a rise in online angel investment networks, as well as local investor groups you can pitch in to in person. Angel investors are usually high net worth individuals who provide industry knowledge, financial backing, as well as industry or business experience to early stage start-ups or entrepreneurs, while expecting to share the company’s financial rewards in return. Some of the popular angel investor platforms in Malaysia are Angel Investment Network, Capital, BizAngel and Cradle Fund. Usually, angel investors do not take more than 10-20% equity when investing in a start- up, allowing enough incentives to the business founders. The downside of this method is that they generally offer less financial backing compared to banks and venture capital funds. Venture Capitalist This is somewhat similar to angel investors where they provide funds based on their trust in your ability to create a successful, profitable venture. Often times, venture capitalists support start-up ventures (for an equity stake) or small companies that wish to expand but do not have access to equities markets, as they would be able to earn a massive return if these companies succeed. Of course, in order to convince them to invest in your idea, you will need a business model that stands out from the rest in the market. Popular venture capitalist companies in Malaysia and South East Asia includes NEXEA, RHL Ventures, 500 Start- ups etc. On the other hand, venture capital funds have a short shelf life in nature as they generally seek to recover their investments, obtain profit and move on to the next potential start- up. Government Grants and Loans While this method doesn’t cut a massive check, there are dozens of grants offered by federal and state governments that you can consider. In Malaysia, the government has implemented various financial schemes and incentives to help local startups and enterpreneurs to kick start their business. The main drawback of this method however is the fierce competition, as well as the box- ticking requirements to qualify for such grants. Personal Loans These loans are generally easier to get than a business loan and is suitable for businesses that don’t need a large amount of capital. The advantages of this option are you can retain full equity, can feasibly obtain a large figure, and that you can build your credit. The downside of this method is that personal loans generally have lower financing limits and higher interest rates. You also risk going into bankruptcy if you are unable to pay everything back, including interest.    Small Business Loans While most banks do offer loans to small businesses, they tend to be more careful when doing so, ensuring that you have a good credit score. In Malaysia, banks usually grant such loans based on your bank statements, credit history, and other relevant financial information. Although these loans have higher financing limits and lower interest rates compared to personal loans, it can be difficult for business to qualify.   Crowdfunding Crowdfunding is a rather new method for businesses to raise funds from individuals that support the projects or companies through small contributions. There are two types of crowdfunding: Reward- Based Crowdfunding and Equity- Based Crowdfunding. Reward- Based Crowdfunding is more similar to consumption rather than investing as the funders may not necessarily obtain back the money invested, instead they will receive certain rewards. Equity Crowdfunding is where people invest in a business