Boss Boleh | Opening a Private Clinic as a Sdn Bhd: Shareholding Rules for Doctor-Owners Under the Private Healthcare Facilities and Services Act

A private clinic Sdn Bhd does not require a doctor to own any particular percentage of the company. The Private Healthcare Facilities and Services Act 1998 (PHFSA) sets no shareholding rule at all for a private medical clinic. What it controls is the clinic’s certificate of registration: for a private medical clinic, that certificate may only be issued to a registered medical practitioner [PHFSA, Section 7(1)]. So the company can own the business, but a registered doctor must hold the clinic’s registration.

This surprises a lot of first-time clinic owners. Many assume healthcare businesses must be majority doctor-owned, or that the law requires a doctor on the company’s board. For a private medical clinic, neither rule is in the Act, and the Ministry of Health’s own FAQ confirms that when a medical clinic is run through a company, the certificate holder does not have to sit on the board. Understanding this early saves you from over-engineering your shareholding structure before you even register the company.

🔔 TL;DR

The PHFSA sets no minimum or maximum shareholding percentage for doctors in a private clinic Sdn Bhd.
A private medical clinic’s certificate of registration may only be issued to a registered medical practitioner, meaning a doctor registered under the Medical Act 1971 who holds a valid practising certificate [PHFSA, Sections 2 and 7(1)].
For a medical clinic run through a company, the Ministry of Health does not require the certificate holder to be a director.
Foreign shareholding is a separate policy question: stand-alone specialist clinics have been open to 100% foreign equity since 1 June 2012, but general practice clinics were not part of that opening.
The clinic must be registered with the Director General of Health before it operates [PHFSA, Section 4(1)], and directors still carry their own duties under the Companies Act 2016.

📌 Why does a clinic need to be a Sdn Bhd at all?

A sole proprietorship is not a separate legal entity, so it cannot hold assets, loans or equipment financing arrangements in its own name, and it exposes the owner’s personal assets to business liabilities. A Sdn Bhd (private limited company) is a separate legal entity. It can own equipment, enter financing agreements, and take on partners or investors, while generally shielding the individual doctor’s personal assets from company debts.

This is also why equipment financing is one of the biggest practical reasons doctors incorporate. Dental chairs, imaging equipment and laser devices are expensive. Lenders and financing partners typically require a registered company, not a sole proprietor, before extending financing. If you are planning a clinic with real equipment investment, the Sdn Bhd structure usually comes before the financing conversation, not after.

📌 What does the Private Healthcare Facilities and Services Act actually require of the shareholders?

Nothing. The PHFSA has no rule on how much equity a doctor must hold, how many doctor-shareholders a clinic needs, or who else may hold shares. Its rule for a private medical clinic is about the registration, not the company: the certificate of registration to establish, maintain, operate or provide a private medical clinic may only be issued to a registered medical practitioner [PHFSA, Section 7(1)].

A “registered medical practitioner” here means a doctor registered under the Medical Act 1971 who holds a valid practising certificate [PHFSA, Section 2]. In practice, the structure looks like this:

The Sdn Bhd owns and runs the business: the equipment, the staff contracts, the financing and the bank account.
A registered doctor holds the clinic’s certificate of registration from the Ministry of Health.
The shareholders can be that doctor, other doctors, or non-doctors. The PHFSA does not say.

Don’t confuse this with the rule for hospitals and other licensed facilities. For those, a company can hold the licence only if at least one of its directors is a registered medical practitioner [PHFSA, Section 6(1)(c)]. A private medical clinic is registered, not licensed, so that board rule does not apply to it.

📌 Can non-doctors or foreign investors own the clinic company?

Non-doctors, yes, as far as the PHFSA goes. The Act has no shareholding provisions at all, so a doctor can bring in a business partner, a family investor, or outside capital for a multi-clinic expansion, as long as a registered doctor holds each clinic’s certificate of registration.

Foreign investors are a separate question that the PHFSA does not answer. Under Malaysia’s services sector liberalisation, stand-alone specialist medical clinics were opened to 100% foreign equity from 1 June 2012. General practice clinics were not on that list. If you plan to bring in foreign shareholders, especially for a GP clinic, confirm the Ministry of Health’s current position before you allot any shares.

📌 What qualifications does the doctor holding the registration need?

There are no special qualifications required just to hold shares in a clinic Sdn Bhd. Anyone, doctor or not, can be a shareholder without triggering any medical qualification check.

The requirement bites at the registration. The certificate holder must be a registered medical practitioner, which the PHFSA defines as a doctor registered under the Medical Act 1971 who holds a valid practising certificate [PHFSA, Section 2]. Under the Medical Act 1971, the annual practising certificate is issued to a fully registered doctor who applies for it and shows evidence of professional indemnity cover [Medical Act 1971, Section 20]. The clinic also needs a person in charge with the qualifications set by regulation.

📌 What else does the clinic need to operate legally, beyond the shareholding structure?

Getting the shareholding and the registration holder right is necessary but not sufficient. A private clinic also needs:

A Certificate of Registration from the Director General of Health before the clinic can operate [PHFSA, Section 4(1)]. Operating an unregistered clinic is an offence: upon conviction, an individual may face a fine of up to RM300,000, imprisonment of up to six years, or both, and a company a fine of up to RM500,000 [PHFSA, Section 5].
Compliance with the Ministry’s standards for premises, staffing and safety. The Ministry reviews your plans and documents before registration and inspects the clinic for compliance after it starts operating.
Ongoing care of the registration itself. The certificate cannot be transferred or assigned without the Director General’s prior written approval [PHFSA, Section 41], and any change in the clinic’s person in charge must be notified to the Director General within 14 days [PHFSA, Section 33].

Building on the shareholding flexibility above, this is where the harder, more operational question sits: regulatory registration is a separate workstream from company incorporation, and it typically takes longer. Doctors planning a clinic launch should treat company incorporation and Ministry registration as two parallel tracks, not one sequential step.

📌 How does this interact with your obligations as a company director?

A related but distinct question is what being a director (doctor or not) actually means under company law, separate from healthcare regulation. Every Sdn Bhd, clinic or otherwise, must appoint at least one qualified company secretary within 30 days of incorporation (Companies Act 2016, Section 236(2)). The company and its directors remain responsible for their own statutory duties, including lodging the Annual Return generally within 30 days of the incorporation anniversary (Section 68) and the financial statements generally within 30 days after circulation to members (Section 259), unless an extension is approved.

These obligations run regardless of who holds the shares or who holds the clinic’s registration. A doctor who is a 100% shareholder but not a director still has company secretarial filings to think about through their appointed directors. A non-doctor majority shareholder does not escape these duties either. The PHFSA and the Companies Act 2016 operate side by side: one governs the clinic’s registration, the other governs the corporate entity itself.

📌 Frequently Asked Questions

Does the doctor holding the clinic’s registration need to own shares?

No. The PHFSA only requires that the certificate of registration for a private medical clinic is issued to a registered medical practitioner [Section 7(1)]. It says nothing about that doctor’s shareholding, and the Ministry of Health does not require the certificate holder of a company-run medical clinic to be a director.

Can two doctors split clinic ownership 50/50?

Yes. The PHFSA has no shareholding percentage rule, so doctors and any other shareholders can split the equity however they agree. The certificate of registration is still issued to a registered medical practitioner, not to the company.

Can a clinic Sdn Bhd have a foreign shareholder with no doctor among the shareholders at all?

The PHFSA does not stop it, because it does not regulate shareholding, as long as a registered medical practitioner holds the clinic’s certificate of registration. Foreign equity is a separate policy question: stand-alone specialist clinics have been open to 100% foreign equity since 1 June 2012, while general practice clinics were not part of that opening, so check the Ministry of Health’s position first.

Does the clinic company need a doctor on its board?

Not for a private medical clinic. The one-doctor-on-the-board rule in Section 6(1)(c) applies to hospitals and other licensed facilities. A private dental clinic is different: according to the Ministry of Health’s FAQ, if a company holds a dental clinic’s certificate, at least 50% of its board must be registered dental practitioners.

Is a Certificate of Registration the same as SSM company registration?

No. SSM (Companies Commission of Malaysia) registration incorporates the Sdn Bhd as a legal entity. The Certificate of Registration from the Director General of Health is a separate approval specifically for operating the clinic.

Does appointing a company secretary have anything to do with PHFSA compliance?

No. A qualified company secretary supports statutory registers, resolutions and SSM filings under the Companies Act 2016. PHFSA compliance (the clinic’s certificate of registration, its person in charge and the Ministry’s standards) is a separate regulatory track.

If the clinic’s shareholding changes later, does the Ministry need to know?

A change of shareholders alone is not something the PHFSA regulates. What the Ministry does control is the registration itself: the certificate cannot be transferred without the Director General’s prior written approval [Section 41], and a change of the clinic’s person in charge must be notified within 14 days [Section 33].

This is genuinely a two-track process, corporate structuring on one side, healthcare regulatory approval on the other, and getting both right from day one avoids rework later. If you are planning a clinic incorporation and want the company structure set up properly before you approach the Ministry of Health or an equipment financing partner, it is worth getting the Sdn Bhd foundation right first.

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Boss Boleh is an online company secretary and incorporation platform built for first-time entrepreneurs, including medical practitioners setting up their first private clinic company. Beyond company secretarial work, it also offers a one-stop compliance solution for entrepreneurs, including accounting, tax planning and tax filing services. We handle Sdn Bhd incorporation in 2 working days, company bank account opening without a branch visit, and the standard corporate resolutions (director changes, share allotments, bank account resolutions) that clinic owners need as their ownership structure evolves. Owners can also keep their own external auditor or tax agent while we manage Annual Return and Beneficial Owner submissions to SSM. With over 1,500 Google reviews at a 4.9-star average, Boss Boleh supports clients in Kuala Lumpur, every other state, and Malaysians living overseas.