Stamp Duty for Non Disclosure Agreement in Malaysia: Everything You Need to Know
Non Disclosure Agreements (NDAs) are commonly used by businesses and individuals to protect confidential information. It is a legal contract that prohibits one or more parties from disclosing information to others without permission. However, for an NDA to be legally enforceable in Malaysia, it must be stamped with the appropriate stamp duty.
What is Stamp Duty?
Stamp duty is a tax imposed by the Malaysian government on legal documents such as contracts, agreements, and deeds. It is a form of revenue for the government and is required by law. The amount of stamp duty to be paid depends on the nature of the document and the value of the transaction involved.
Why is Stamp Duty Required for NDAs?
NDAs are considered legal documents and hence require stamp duty in Malaysia. The Stamp Act 1949 states that any agreement or contract that restricts or prevents someone from doing something is subject to stamp duty. NDAs fall under this category as they restrict parties from disclosing confidential information.
How Much Stamp Duty is Required for NDAs?
The stamp duty for NDAs in Malaysia is calculated based on the value of the transaction or the consideration involved. The consideration refers to the monetary value of the exchange between the parties.
For example, if the NDA is a standalone document and the consideration is less than RM100,000, the stamp duty is RM1 for every RM100 or a fraction thereof. For consideration exceeding RM100,000, the stamp duty is RM2 for every RM100 or a fraction thereof.
If the NDA is part of a larger agreement or contract, the stamp duty is calculated based on the total consideration of the entire document.
How to Stamp an NDA?
To stamp an NDA in Malaysia, the document must be presented to the nearest stamp office or authorized stamp vendor. The stamp duty must be paid, and the stamp will be affixed to the document. Once stamped, the NDA is considered legally enforceable in Malaysia.
Stamp duty for NDAs should not be overlooked as it is a legal requirement in Malaysia. Failure to stamp an NDA may render it unenforceable in court. It is important to consult with a lawyer or a legal professional to ensure that your NDA is properly drafted and stamped. This will help to protect your confidential information and prevent unauthorized disclosures.