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2025 marks a pivotal year for Malaysian startups as they navigate an evolving regulatory landscape. Tax overhauls, stricter data protection, and emerging regtech mean compliance is now strategic, not just a checkbox asset. Here are the top compliance trends for Malaysian startups in 2025 that can help founders stay ahead of requirements and create resilient, compliant businesses.
1. Expanded Sales & Services Tax (SST) Coverage
Starting July 1, 2025, Malaysia will expand the Sales and Services Tax (SST) to include more goods (e.g., luxury items such as imported fruits, salmon, and premium fabrics) and services (including financial, property leasing, professional consulting, and private healthcare). Startups in fintech, edtech, healthtech, and B2B SaaS must:
- Assess which offerings now fall under SST.
- Upgrade ERP/invoicing systems to apply the correct tax rates.
- Understand transitional rules (e.g., invoicing before July 1, delivery after).
What should you do?
Conduct a comprehensive SST impact review and ensure systems are updated before the compliance deadline.
2. Stricter Data Protection under PDPA Amendment 2024
On June 1, 2025, the enhanced PDPA took effect, introducing:
- Mandatory Data Protection Officers (DPOs) for businesses handling extensive/sensitive personal data.
- A 72-hour breach notification to authorities and a 7-day notice to affected individuals.
- New data subjects’ rights, such as portability
Startups leveraging personal data (e.g., fintech, healthtech, e-commerce) must:
- Appoint a qualified Data Protection Officer (DPO) and publicise their contact details.
- Implement breach detection and notification processes.
- Enable data portability capabilities.
Key takeaways: Treat data compliance as a trust builder; it’s essential for maintaining customer confidence and fostering investor relations.
3. Rise of RegTech & Automated Compliance Solutions
The Malaysian RegTech industry is projected to surge with ~18.8% CAGR from 2024 to 2029. Meanwhile, global startups are automating policy, evidence gathering, and workflows.
Why it matters for Malaysian startups:
- Streamlines SST filings, breach reporting, and audit trails.
- Reduces reliance on manual spreadsheets.
- Enhances accuracy and scalability in compliance.
Examples: Tools offering ML-based document parsing, anomaly detection, policy enforcement, and integration with cloud infrastructure.
4. Third-Party / Vendor Risk Management
Startups frequently integrate third-party services, such as API providers, cloud tools, and payment gateways. Regulatory focus is increasingly shifting toward vendor risk standards.
Malaysian startups should:
- Implement vendor risk assessments (certifications, data security, compliance standards).
- Maintain due diligence records for audits.
- Include contractual safeguards, breach clauses, and right-to-audit provisions.
This enhances preparedness for potential third-party breaches and builds trust with enterprise clients.
5. Enhanced Cybersecurity & AI-Driven Monitoring
Malaysia’s Digital Ministry and CyberSecurity Malaysia are ramping up digital transformation, with a particular emphasis on cybersecurity infrastructure. Meanwhile, research supports the use of AI and blockchain frameworks for enhanced security compliance.
Startups need layered defences:
- Automated AI/baseline threat detection.
- Immutable logs via blockchain.
- Smart contracts to enforce policy.
- Secure data lifecycle controls aligning with PDPA.
This not only meets regulations, but it also attracts partnerships and investor interest.
6. ESG & Sustainability Reporting in Financial Compliance
The Securities Commission and MASB are encouraging ESG and sustainability disclosures in core financial reporting. For Malaysian startups, especially in the cleantech or B2B sectors:
- Begin aligning with frameworks like GRI or SASB.
- Integrate non-financial KPIs (e.g. energy usage, diversity metrics).
- Audit ESG data to attract investors increasingly focused on impact.
7. Telecom & Online Safety Regulations
Amendments to the Communications and Multimedia Act (CMA) reinforce obligations on content platforms, noise limits, and privacy. With upcoming licensing rules for platforms exceeding 8 million users, any startup building communication or social apps must prepare:
- Licensing compliance is required if the user base grows.
- Content monitoring capabilities.
- Strong data retention and privacy controls.
8. Talent & Digital Literacy in Compliance Roles
Compliance needs specialised talent. Malaysia is investing in upskilling for AI, cybersecurity and ESG compliance. Startups must:
- Hire or train DPOs.
- Integrate compliance roles into engineering, legal, finance and operations.
- Invest in staff training to foster a culture of compliance.
Talent development is crucial for sustainable compliance operations.
9. Transparency & Investor-Driven Standards
Global investors now expect robust compliance protocols. Malaysian startups aiming for Series A/B+ rounds should showcase:
- Automated tax filings and audit-readiness.
- RegTech-enabled dashboards (evidence, control metrics).
- Data breach history logs, vendor compliance records.
Compliance is a trust signal. It can unlock investment and enterprise partnerships.
10. Legal Tokenisation & Blockchain Compliance
Blockchain is gaining traction in Malaysia, especially for supply chain solutions. Emerging frameworks include integrating smart contracts with regulatory compliance logs.
Startups exploring blockchain should:
- Leverage smart contracts for audit trails and access controls.
- Align token use with PDPA, SST and financial compliance.
This fosters innovation while retaining regulatory alignment.
Conclusion
In 2025, compliance in the Malaysian startup landscape is dynamic and presents numerous opportunities. The Malaysian startup compliance trends 2025 include:
- SST expansion,
- PDPA enforcement,
- RegTech adoption,
- Vendor risk vigilance,
- Cyber readiness,
- ESG reporting,
- Telecom regulation,
- Talent investment,
- Investor-grade transparency,
- Blockchain compliance frameworks.
By proactively embracing these trends, startups not only meet their legal obligations but also unlock trust, scale sustainably, and stand out in both regional and global ecosystems.
Quick Checklist for Malaysian Startups:
| Area | Action |
| SST expansion | Conduct a review, update invoicing systems before 1 July 2025 |
| PDPA amendment | Appoint DPO, set breach and portability workflows |
| RegTech | Deploy automated platforms for compliance evidence and reporting |
| Vendor risk | Launch vendor assessment and maintain due diligence |
| Cybersecurity | Implement AI monitoring, blockchain audit trails |
| ESG reporting | Map ESG metrics, align with GRI/SASB,and audit data |
| Telecom/apps | Prepare for licensing, monitoring, and privacy in comms apps |
| Talent/Training | Hire/train DPO, compliance engineers across departments |
| Investor readiness | Build dashboards, logs, vendor and breach history |
| Blockchain compliance | Use smart contracts for traceability and immutable logs |
Need Help Staying Compliant in 2025?
Altomate is your trusted partner for navigating Malaysia’s complex compliance landscape. Whether it’s SST implementation, PDPA advisory, RegTech solutions, or corporate secretarial support, we help startups stay ahead of the curve while staying focused on growth.
- Incorporation
- Digital Company Secretary
- Payroll & Tax Filing
- MBRS & XBRL Services
- Regulatory Compliance Guidance
Book a free consultation today and get expert guidance tailored to your startup’s needs.
