Q：
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What is a branch office of a foreign company?
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A：
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Foreign investors may opt to set up a branch office to expand their business in Malaysia on a short-term basis save for wholesale or retail trade businesses which must be operated through a locally incorporated company. A branch office does not exist as a separate legal entity. It is a branch of their foreign parent company abroad. Therefore, the parent company will be responsible for any liabilities resulting from the branch’s operations. The branch office is obliged to perform the same business operations as its parent company. Any management decisions undertaken by the branch office must necessitate the approval of their parent company.
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Q：
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What are the basic requirements for setting up a branch office in Malaysia?
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A：
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The branch office must use the same company name as that of its parent company, participate in the same business activities, have one registered office in Malaysia, and engage at least one Malaysian resident agent as its representative. This authorised agent is personally liable for all penalties imposed on the foreign business that contravene the Companies Act 2016.
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Q：
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How much is the official registration fee for setting up a branch office in Malaysia?
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A：
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The official registration fee for a branch office is determined by the amount of share capital of its parent company, ranging from RM5,000 to RM70,000:
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Share Capital (RM)
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Registration
Fee (RM)
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Not more than RM1 million
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5,000
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Exceeds RM1 million but not
exceeding RM10 million
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20,000
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Exceeds RM10 million but not
exceeding RM50 million
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40,000
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Exceeds RM50 million but not
exceeding RM100 million
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60,000
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Exceeds RM100 million
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70,000
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The share capital of the foreign company must first be converted to the Malaysian currency using the current exchange rate in determining the registration fee.
For a foreign company without share capital, a flat rate of RM70,000 shall be paid to Companies Commission of Malaysia.
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Q：
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What are the benefits of setting up a branch office in Malaysia
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A：
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There are several advantages to establishing a Malaysian branch office, including:
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Easy to set up due to fewer registration requirements.
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Easier control of management by the parent company as the management decision remains in the hands of the parent company.
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Double taxation avoidance as Malaysia has numerous double tax treaties with other countries.
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Q：
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What are the annual obligations of a Malaysian branch office?
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A：
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A Malaysian branch office must ensure the timely submission of the followings to the local authorities:
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Annual return
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Annual tax return
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Audited financial statements of the branch office and of its parent company
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Notification on any changes in particulars that are related to the branch office and its parent company, such as name, constitution, directors, registered office, share capital etc.
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FAQ
