Stamp Duty on Share Transfers: What Business Owners Need to Know Before Restructuring

When business owners restructure shareholding, bring in new partners or transfer shares to family members, stamp duty on the share transfer document is one obligation that often gets missed until the last minute.

For shares in companies incorporated in Malaysia that are not listed on Bursa Malaysia, the stamp duty is calculated based on whichever is higher between the transfer price or the value of the shares on the date of transfer. The rate is RM10 for every RM1,000 or part thereof.

The value used is not simply the price two parties agree on. For ordinary shares, the calculation uses the Net Tangible Asset (NTA) method, which takes total assets, minus intangible assets, minus total liabilities, then divides by the number of issued shares to arrive at the NTA per share. The duty is then based on either this NTA figure or the actual consideration paid, whichever is higher.

Different situations attract different treatment. If the company has just been incorporated and has no track record yet, the consideration paid is used as the basis.

The buyer or transferee is responsible for paying the duty. The instrument used is the Form of Transfer of Securities under the Companies Act 2016.

If you are planning a share restructuring exercise, understanding how stamp duty is computed early helps avoid surprises at the time of execution. Our CFO advisory team helps businesses navigate these obligations without disruption. WhatsApp us at 010-246 2151.