Representative / Regional Office
A Representative Office / Regional Office is an office established in Malaysia by a foreign company / organisation to perform permissible activities for its head office / principal.
a) Government and Trade Association
- Duration is based on the contractual agreement or other equivalent document or maximum of five (5) years and renewed based on the merits of each case.
b) Company
- Minimum of two (2) years and extended period may be considered subject to additional commitment on operating expenditure and based on the merits of each case.
c) Others (including non-profit organizations not relating to trade)
- Minimum of two (2) years depending on the merits of each case.
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How long does the application takes?The full registration usually completes within 1 - 3 days upon complete information submitted to Companies Comission of Malaysia ("CCM").
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I am a foreigner. Can I incorporate a Sdn Bhd in Malaysia?Yes, you certainly can. Every Company, however, must have at least one director who resides in Malaysia. That individual may be you or someone who lives in Malaysia. If you are the company's only director and are not a Malaysian citizen, we may ask for your Malaysia residential information. Contact us and we will provide you with a one-time free consultation.
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What are the responsibilities of a director?As per Section 213 of the Companies Act 2016, directors must always exercise their powers for a legitimate purpose and in good faith in the best interests of the business, and exercise reasonable care, skill, and diligence. Despite the fact that the Companies Act 2016 gives directors broad management powers, there are laws in place to protect the company's interests from the directors' wrongdoings.
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What is the tax rate of a company?The standard corporate tax rate on the chargeable income is 24%. The corporate tax rate for small and medium-sized businesses (i.e. those with paid-up capital of less than RM2.5 million and annual sales of less than RM50 million) is 17% on the first RM600,000, and 24% on the rest.
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Do I need to register a Company with Companies Commission of Malaysia (CCM)?The Representative Office/Regional Office is not required to be incorporated under the Companies Act 2016. The setting up of a Representative/Regional Office requires the approval by the Government of Malaysia.
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What are the Permissible Activities for Representative Office / Regional Office?- Gathering and analysis of important information or undertaking feasibility studies on investment and business opportunities in Malaysia and the region; - Planning or coordination of business activities; - Identifying sources of raw materials, components or other industrial products; - Undertake research & product development; - Act as a coordination centre for the corporation's affiliates, subsidiaries and agents in the region; and - Other activities which will not result directly in actual commercial transactions.
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What are the Non-Permissible Activities for Representative Office / Regional Office?- Engaged in any trading (including import and export), business or any form of commercial activity; - Lease warehousing facilities; any shipment / transshipment or storage of goods shall be handled by a local agent or distributor; - Sign business contracts on behalf of the foreign corporation or provide services for a fee; - Participate in the daily management of any of its subsidiaries, affiliates or branches in Malaysia.
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What is the Procedure for Application?An application (excluding banking, financial and tourism services) should be submitted in three (3) copies to Malaysian Industrial Development Authority (Manufacturing Services Division) ["MIDA"] The following documents should be submitted together with the application: (i) Certified true copy of passport containing particulars of the expatriate; (ii) Curriculum Vitae of the expatriate to be employed; and (iii) Certified Academic Qualification of the expatriate.
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Is Representative Office / Regional Office eligible to apply for expatriate post?A Representative Office / Regional Office is eligible to apply for expatriate post. The expatriates will only be considered for managerial and technical posts and the number of posts allowed depending on the functions and activities of the Representative Office / Regional Office. The proposed expatriate must be currently employed by the applicant company or its subsidiary or within the group. An expatriate working with the Representative Office / Regional Office is taxed based on the portion of their chargeable income attributed to the number of days that they are in the country. Employment pass for the approved expatriate is valid for one (1) year and requires renewal on annual basis.
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