Branch Office Registration in Malaysia
Branch office setup is a form of business operation commonly set up by a foreign company which is only operating in Malaysia on a short term basis and not carrying wholesale nor trade retail businesses. A branch office of a foreign company is required to have at least one (1) person residing in Malaysia to be its authorised agent in Malaysia to accept on its behalf service of process and any documents required to be served on the company. The appointed agent shall be answerable for the acts, matters and things, as are required to be done by the foreign company under the Companies Act and be personally liable for all penalties imposed on the foreign company for any contravention of the Companies Act.
Registration fees payable to SSM shall be as per the payment schedule below:
|WITH SHARE CAPITAL (RM)||FEES (RM)|
|Up to 1,000,000||5,000|
|1,000,001 – 10 Million||20,000|
|10,000,001 – 50 Million||40,000|
|50,000,001 – 100 Million||60,000|
|Exceeding 100 Million||70,000|
1. In determining the registration fees, the nominal share capital either authorised or paid up of the foreign company should first be converted to the Malaysian currency (Ringgit Malaysia) at the prevailing exchange rate.
2. In the event a foreign company does not prescribe any share capital, a flat rate of RM70,000.00 shall be paid to SSM.
Note that most small and midsized foreign companies register subsidiaries in Malaysia rather than setting up a branch office or representative office.
A Malaysia Branch Office is considered a non-resident company for tax purposes. Non-resident companies are not eligible for tax incentives for new start up or resident companies. Besides, withholding tax of 10% + 3% is applicable on payments made to the branch for services performed in Malaysia (as branch is a non-resident for tax purposes). In view of this, most foreign companies prefer to set up a Subsidiary Company rather than a Branch Office.
To explore your other options, see foreign company setup options in Malaysia.
Due to the above reasons and the preference by clients to set up subsidiary companies rather than branch offices, we are no longer providing branch registration services to our clients.