Is crowdfunding legal in Malaysia? How is it safe?


作者:Tom Phan

Is crowdfunding legal in Malaysia? First of all, the answer is YES.

In Malaysia, there are few types of crowdfunding that are regulated by The Securities Commission Malaysia (SC): Equity crowdfunding and Peer-to-peer financing. In addition, there are also crowdfunding platforms that offer reward-based crowdfunding in Malaysia. 

These platforms allow individuals or businesses to raise funds for a project, or venture in exchange for non-financial rewards, such as products or services. 

Platforms that are actively involved in Malaysia are MYFEEL (reward-based), MyStartr, PitchIN (Equity) and more.

Benefits of crowdfunding

One of the primary benefits of crowdfunding platforms is that they provide businesses and individuals with access to capital, which they may not be able to obtain through traditional funding sources, like banks or venture capital firms.

It leads to early access to a product, exclusive experiences, or other benefits. This can be a valuable way for creators to build a community around their project and generate excitement and support.

Using a crowdfunding platform like MYFEEL, project creators can reach a larger audience and generate buzz around their project. 

However, Crowdfunding is just like any investment or financial transaction, carrying some level of risk. While the level of risk can vary depending on the type of crowdfunding and the specific project or venture being supported.

Research before you launch

To ensure that you are in compliance with all relevant regulations and guidelines in Malaysia, it is important to do your research and consult before launching a crowdfunding campaign.

In addition, crowdfunding platforms often have their own mechanisms in place to protect investors.

To elaborate, such as escrow accounts to hold funds until a project is fully funded, and dispute resolution processes to address any issues that may arise between project creators and backers.

That being said, backers should carefully research the project and the creator before making a contribution, to ensure that they are comfortable with the level of risk involved.

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