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Corporate Service - Malaysia

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Q&A on Setting up of a Representative Office/Regional Office in Malaysia

Answer
Q:
Which sectors are eligible to apply for the Representative Office/Regional Office?
A:
  1. Manufacturing sector;
  2. Service sub-sectors endorsed by Malaysian Investment Development Authority (MIDA) and other services sub-sectors considered on a case-by-case basis; or
  3. Government sector and foreign organisation.

Q:
What activities are allowed for Representative Offices/Regional    Offices in Malaysia?
A:
  1. Gathering and analysing relevant information or conducting feasibility studies on investment and business prospects in Malaysia and the surrounding region.
  2. Planning or coordinating business activities.
  3. Identifying sources of raw materials, components or other industrial products;
  4. Conducting product and research development;
  5. Serving as coordination centre for the corporation’s affiliates, subsidiaries and agents in the region;
  6. Engaging in other activities that do not lead directly to actual commercial transactions.

Q:
What is the duration allowed for the Representative Office/Regional Office and is it renewable?
A:
A company can set up a Representative Office/Regional Office for at least 2 years, with possibility to be extended based on additional operating expenditure commitments and the specifics of each case.

If a foreign company wants to extend its Representative Office/Regional Office, the extension application must be submitted to MIDA at least 3 months before the expiration date. Approval for the extension will depend on meeting the required conditions.

Q:
What are the requirements of Representative office/Regional office?
A:
  1. The name of the Representative Office/Regional Office must match the parent’s entity name.
  2. It must operate on commercial premises and engage only in permitted activities.
  3. The minimum operational expenditure for a new Representative Office/Regional Office is RM300,000 per year or the amount proposed by the applicant, whichever is higher.
  4. It must be funded by sources from outside Malaysia.

Q:
Is the Representative Office/Regional Office eligible to apply for the expatriate posts?
A: Yes, the Representative Office/Regional Office can apply for expatriate positions. However, expatriates will only be considered for managerial and technical roles, and they must receive a minimum basic salary of RM5,000 per month. The employment pass for the approved expatriate is valid for one year and must be renewed annually.

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