Business Entity Firm registered under the Registration of Businesses Act 1956

1. Business Entity • Firm registered under the Registration of Businesses Act 1956 • Partnership registered under the Limited Liability Partnership Act 2012 • Company incorporated under the Companies Act 1965 • Corporate body formed under any other written laws of the country • Foreign Company If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

2. Registration of Businesses Act 1956 • Sole - proprietorship • Partnership (conventional partnership) If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

3. Limited Liability Partnership Act 2012 • Partnership If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

4. Companies Act 1965 • Public Company • Private Company If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

5. Companies • Limited by shares • Limited by guarantee If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

6. Other Corporate Body • Co-operative – Co-operative Societies Act 1993 • Society - Societies Act 1966 • Trust • Statutory Body If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

7. Public Company • A company other than a private company If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

8. Private Company • restricts the right to transfer its shares • limits to not more than fifty the number of its members (counting joint holders of shares as one person and not counting any person in the employment of the company or of its subsidiary or any person who while previously in the employment of the company or of its subsidiary was and thereafter has continued to be a member of the company) • prohibits any invitation to the public to subscribe for any shares in or debentures of the company • prohibits any invitation to the public to deposit money with the company for fixed periods or payable at call, whether bearing or not bearing interest If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

9. Exempt Private Company • Private Company – • financial interest is not held directly or indirectly by any corporation • not more than twenty members none of whom is a corporation If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

10. ACCOUNTING (AND OTHER RECORDS) • S.166A(2) CA 1965 • The approved accounting standards shall apply to the accounts of the company or the consolidated accounts of a holding company if, at the time when the accounts or consolidated accounts are made out, the approved accounting standards - • (a)apply in relation to the financial year of the company or the holding company to which the accounts or consolidated accounts relate; and • (b)are relevant to those accounts or consolidated accounts If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

11. Approved Accounting Standards S.166A CA 1965 Compliance with applicable approved accounting standards issued by the Malaysian Accounting Standards Board (MSAB) (Financial Reporting Act, 1997) If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

12. Accounting (and other records) • S.167(1) CA 1965 • Explain the transactions and financial position • True and Fair • Profit and Loss Account • Balance Sheet • Audited If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

13. ACCOUNTS S.4 CA 1965 Accounts means profit and loss accounts and balance sheets and includes notes or statements required by this Act (other than auditors’ reports or directors’ reports) and attached or intended to be read with profit and loss accounts or balance sheet. If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

14. ACCOUNTING REQUIREMENTS Ninth Schedule CA 1965 Statements of Changes in Financial Position (Cash Flow Statement) If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

15. ACCOUNTING REQUIREMENTS • S. 166(A)(6) CA 1965 • Where any conflict or inconsistency arises between the provisions of an applicable approved accounting standard and a provision in the Ninth Schedule in their respective applications to the accounts or consolidated accounts or consolidated accounts of a company, the provisions of the applicable approved accounting standard shall prevail If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

16. RECEIPTS • S.82 ITA 1967 • Issue of Receipts • Gross Takings - Sale of Goods - Exceeds RM150,000 per annum • Gross Takings - Services - Exceeds RM100,000 per annum • Exception – machine is used for recording sales If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

17. Entries S.167(1A) CA.1965 S.82(6) ITA 1967 Recorded within 60 days If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

18. Retention • S.167(2) CA 1965 • S. 82(1) ITA 1967 • Seven years If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

19. ANNUAL COMPLIANCE • Inland Revenue Board – Income Tax Return • Companies Commission of Malaysia – Annual Return If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

20. Regulatory Requirements - General • Registered Business Entity • Local Authority Licence • Signboard Licence • Fire Department Approval • Approval for Renovation • Department of Environment Approval • Notification to Labour Office • Registration with SOCSO • Registration with EPF • Registration as an Employer (E) and Employees for Tax Purposes • Registration with the Inland Revenue Board If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

21. Regulatory Requirements – Specific to Industries • Manufacturing Licence • Sales Tax / Service Tax Licence • Licensed Manufacturing Warehouse Licence • Department of Occupational Safety and Health Requirements • Registration with Pembangunan Sumber Manusia Bhd (Human Resources Development Bhd) • Fire Certificate for Designated Premises If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

22. Regulatory Requirements – Specific to Industries • Ministry of Health Requirements • Control Items’ Licences • Chemistry Department Requirements • Importers / Exporters Code • Export / Import Licence • Printing Press Licence • Halal Certification If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

23. PROCEDURES FOR THE INCORPORATION OF COMPANIES LIMITED BY SHARES Search of Name and Reservation of Name Lodgment of documents for incorporation Submit Form 13A to CCM Upon approval of proposed name, the name is automatically reserved for three months from the date of approval Submit to CCM:- Memorandum and Articles of Association Subscription for Shares and Signatures are to be hand written. First Directors and Secretary have to be named in the Memorandum and Articles of Association. Form 6: Declaration of Compliance – To be signed by the first secretary named in the Articles of Association. Form 48A: Statutory Declaration by a person before appointment as a director or by a promoter before incorporation of company -–To be signed by each director or promoter separately in the presence of a Commissioner for Oaths. A copy should be lodged with the Official Receiver. Form 48F : Declaration by a person named in the Memorandum and Articles of Association as first secretary. Original Form 13A with the approval stamp. If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

24. INFORMATION FOR INCORPORATION 1. Proposed Name Please provide at least three names to expedite search of name and choice. Also if it is similar to an existing name, please obtain consent letter / letter of no objection. Please provide name and I/C of 2 proposers 2. Principal Activity Normal duration of search is 3 working days. Upon approval of name we will require the following details. (This may also be done before the name is approved). 1. Name of at least two subscribers – copies of Identification (I/C) to be provided. 2. Proposed authorised and paid up capital. 3. Name of first directors (including at least two directors resident in Malaysia) – Copies of identification (I/C) to be provided. 4. Main objects clause. 5. Proposed Secretary – copies of I/C to be provided (Must be resident in Malaysia) 6. Vocation of Directors, Shareholders and Secretary. 7. Any special instruction (example – address different from I/C, dating of documents) Normal duration for incorporation is 10 working days. (Online registration would normally take 3 working days.) The above estimated duration does not include preparation and waiting time for signatures. If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

25. Regulatory Requirements - General • a ) Local Authority Licence • Purpose : All premises to be used for business purposes must be licenced, depending on the suitability of the premise for the trade by the local authority. • b) Signboard Licence • Purpose : Every person who wishes to display a signboard in public requires a signboard licence from the local authority. c) Fire Department Approval • Purpose : To ensure that there are fire safety equipment and procedures appropriate to the trade and premises. This will be to support the application for the local authority licence. d) Approval for Renovation • Purpose : Any renovation or extension of premises must be approved by the local authority before it can be done. This approval is to ensure that conditions of the premise is suitable for occupation. e) Department of Environment Approval • Purpose : This approval is only applicable to the manufacturing sector. It is to ensure that methods of production and wastage generated do not pollute the environment including noise control. • f) Notification to Labour Office • g) Registration with SOCSO • h) Registration with EPF • i) Registration as Employer (E) and Employees for tax purposes • j) Registration with the Inland Revenue Board If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

26. Regulatory Requirements – Specific to Industries a) Manufacturing Licence • Purpose : Manufacturing companies in Malaysia having shareholders’ funds of at least RM2.5 million and / or engaging more than 75 full-time employees are required to apply to MIDA for a manufacturing licence. This is to regulate the manufacturing sector in Malaysia. • b) Sales Tax and Service Tax Licence • Purpose : Licensing under the respective Sales and Service Tax legislation for the collection of sales and service tax for specified businesses. • c) Controlled Items • Purpose : Certain items are controlled with regard to their price, usage and storage eg. Rice, sugar, flour, etc. • d) Employment of Expatriate Personnel (Work Permits) • Purpose : It is the Government’s policy that Malaysians are eventually trained and employed at all level of employment. Companies are encouraged to train more Malaysians so that organisation will reflect the multi-racial composition of the country. Notwithstanding this, foreign companies are allowed to bring in expatriate personnel in areas where there is a shortage of trained Malaysians to do the job. • Guideline : A company with a paid-up capital of US$2 million and above will normally be allowed five expatriate posts. Additional expatriate posts will be given when necessary, upon request. • A company with a paid-up capital of less than US$2 million will be considered as follows : • For executive positions which require professional qualifications and practical experience, expatriates may be employed up to a maximum period of 10 years, subject to the condition that Malaysians are trained to eventually take over those positions. • For non-executive positions which require technical skills and experience, expatriates may be employed up to a maximum period of five years, subject to the condition that Malaysians are trained to eventually take over those positions. • (The approval will be given on the merits of each case.) • A company with a paid-up capital of RM500,000 can be considered for one key post and other time posts and each case will be considered on its merits. If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

27. Regulatory Requirements – Specific to Industries • e) Licensed Manufacturing Warehouse • Purpose : This is a custom facility to enable businesses that export their products to enjoy purchasing raw materials and components without first having to pay import duty and sales tax. This facility is only available if the company export at least 80% of their output. f) Import and Export Code • Purpose : All companies involved in import and export must obtain a code number from the Customs Department (known as trader’s code). This code is needed when submitting custom declarations for import and export at the custom station. g) Registration with Pembangunan Sumber Manusia Bhd (Human Resources Development Bhd) • Purpose : Section 13 of the Pembangunan Sumber Manusia Bhd Act, 2001 requires an employer to register with Pembangunan Sumber Manusia Bhd. (The threshold varies with each industry.) Registered companies are required to pay a Human Resources Development levy for each employee at a rate of one per centum of wages. • The collection of Human Resources Development Fund (HRD Fund) is to promote, develop and upgrade the skills of employees. • h) Occupational Safety and Health Requirements – • Factory and Machinery Installation Approval and Hazardous Substances Licensing • Purpose : To ensure that machineries installed and hazardous substances used comply with safety regulations. Formation of Occupational Safety and Health Committee • Purpose : The Occupational Safety and Health Act 1994, requires companies that employ 40 or more workers to form an Occupational Safety and Health Committee, in order to promote and develop measures to ensure the safety and health of employees at the place of work and to check the effectiveness of such measures. i) Halal Certification • Purpose : To be recognised as a food outlet eligible for Muslim customers and as a training centre (if necessary) for the Muslim way of serving food and to supply and sell food for consumption by Muslims. If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

28. Reference • Government Malaysia Government www.malaysia.gov.my • Legislation Attorney General’s Chamberswww.federalgazette.agc.gov.my • Finance Treasurywww.treasury.gov.my • Banking Bank Negara Malaysia (Central Bank)www.bnm.gov.my • Investments International Trade and Industry www.miti.gov.my • Malaysian Investment Development Authoritywww.mida.gov.my • Income Tax Lembaga Hasil Dalam Negeri Malaysiawww.hasil.gov.my • Customs Royal Malaysian Customs Departmentwww.customs.gov.my • Statistics Department of Statisticswww.statistics.gov.my • Business Companies Commission of Malaysiawww.ssm.com.my • Securities Securities Commission Malaysiawww.sc.com.my • Stock Exchange Bursa Malaysiawww.bursamalaysia.com • Labour Ministry of Human Resourceswww.mohr.gov.my • Employees Provident Fund Kumpulan Wang Simpanan Pekerjawww.kwsp.gov.my • Employees Social Security Pertubuhan Keselamatan Sosialwww.perkeso.gov.my If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

29. Reference • Occupational Safety and Health Department of Safety and Healthwww.dosh.gov.my • Human Resource Development Pembangunan Sumber Manusia Bhdwww.hrdf.com.my • Immigration Immigration Department of Malaysiawww.imi.gov.my • Education Malaysia Ministry of Higher Educationwww.mohe.gov.my • Ministry of Educationwww.moe.my • Health Ministry of Healthwww.moh.gov.my • Tourism Tourism Malaysiawww.tourism.gov.my • Public Security Police www.rmp.gov.my • Professional Bodies • Lawyers Malaysian Barwww.malaysianbar.org.my • Accountants Malaysian Institute of Accountantswww.mia.org.my • Tax Professionals Chartered Tax Institute of Malaysiawww.ctim.org.my If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

30. Disclaimer • The information provided is for guidance only and is not exhaustive. • SQM and the ASQ group of companies shall not be liable for any loss or damage caused by the usage of or reliance on the information and guidance provided on this presentation and from the SQM and ASQ websites. • Professional advice and assistance must always be obtained before you act on any of the guidance provided. • Please refer to the respective legislation and the regulatory authorities for authoritative guidance. If you need advice, please do not hesitate to contact us. (admin@asq.com.my)

31. For professional advice and assistance on • “Doing Business in Malaysia” • “Getting Started” • you may contact us at : • ASQ Consultants SdnBhd, Company No. 449072K • Suite 15.08, Level 15 City Square Office Tower • 106-108 Jalan Wong Ah Fook • 80000 Johor Bahru, Malaysia • Telephone : +60 7 2225202 • Facsimile : +60 7 2238808 • E-mail : admin@asq.com.my