Event: Legal Advisers Meet Legal Technology

On 28 October 2017, I will be speaking together with two other wonderful panelists on how Artificial Intelligence (AI) will disrupt the legal industry in Malaysia. We’ll be speaking about the current issues facing the legal industry,  and how technologies can help improve how we work.

If you’re interested in attending, please contact the organiser at hello@mwlec.com to RSVP. Registration is free.

Hope to see you there.

What founders should know about employer’s obligations

As a founder, there will be a point in your startup journey that you have to hire somebody to help you grow your business. In this post, I hope to share some ideas about your statutory obligations that you should be aware of as an employer.

Monthly Tax Deduction (MTD/ PCB) to Lembaga Hasil Dalam Negeri (LHDN)

Under Malaysian tax laws, the employer must deduct a portion of the employee’s income as monthly tax deduction to  LHDN if the employee earns above RM2,851 nett (ie less EPF/SOCSO contributions) per month. As such, if your full time employee currently earns a monthly  net income exceeding RM2,851, as an employer, you must deduct and remit a portion of the salary (according to the scale that LHDN provides) to LHDN. You can find a copy of the scale of MTD here.

Employees Provident Fund (EPF)

EPF manages the compulsory savings plan and retirement planning for private sector workers in Malaysia.

As an employer, you are liable to pay EPF contributions for any person engaged to work in a “contract of service” (ie full time staff) compared to a “contract for service” (ie freelancers). To illustrate, a freelancer is someone that you engage on an “independent contract” basis, such as a web developer, social media / PR consultant, trade mark agent etc.

This obligation to pay EPF contribution covers:

  • part time, temporary and probationary employees
  • directors who receive wages/salaries from company

Under current EPF laws, the contributions required are as follows:

If employee earns RM5,000 and below:

  • 8% as employee’s contribution
  • 13% as employer’s contribution

If employee earns above RM5,000:

  • 8% as employee’s contribution
  • 12% as employer’s contribution

Social Security Organization (SOCSO)

SOCSO or also known as PERKESO (Pertubuhan Keselamatan Sosial) is a Malaysian government agency that was established to provide social security protections to Malaysian employees under the Employees’ Social Security Act, 1969.

Both employer and employee are required to make monthly contributions to Social Security Organisation (SOCSO) for full time positions. Please see the rate of contributions at Perkeso’s website here

Updates on the legality of cryptocurrency in Malaysia

On 19 September 2017, the Governor of Bank Negara Malaysia (BNM) announced at the Global Symposium on Development Financial Institutions that there will be a a guideline on cryptocurrency to be issued by year end.

It appears that the BNM is particularly concerned about the transparency and the players involved in the cryptocurrency scheme. The detailed news report can be read here.

Two weeks after that, Securities Commission (SC) issued a statement on Initial Coin Offering (ICO). In summary, the SC gave a stern warning to investors to be mindful of the potential risks involved in ICOs scheme. The full statement can be read here.

In restrospect, BNM had earlier announced 3 years ago that Bitcoin is not recognised as legal tender and it does not regulate the operations of Bitcoin. The announcement can be found here.

The potential ban of cryptocurrency by BNM would indirectly mean that ICO would also be deemed to be illegal. This will include the act of buying and selling of other form of cryptocurrency such as Bitcoin and Ethereum altogether.

Potential investors and companies seeking to raise funds through ICOs are advised to be careful when dealing with cryptocurrency given the speculative nature of the schemes.

Many SMEs are still unaware of alternative fundraisings

It might be a cliche to say that cash flow is the lifeblood of any business. As the company grows, the company will require more cash to expand its operations or supply more goods or services to its customers. The latest survey published the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) provides an interesting insights on SMEs awareness on alternative fundraisings in Malaysia. You can get a copy of the report here.  Here’s what I think about the survey. Continue reading “Many SMEs are still unaware of alternative fundraisings”

Why Group Practice is a good news for both lawyers and startups

A change is coming in the way how many small law firms in Malaysia would operate. Last week, a circular by Bar Council was circulated to its members informing that the Small Firm Practice and Future of Law Committee is in the midst of amending the practice rules to allow small law firms to practice and operate as a practice group.  Here’s why it’s a good news for both lawyers and startups. Continue reading “Why Group Practice is a good news for both lawyers and startups”