|
Q：
|
What is a Representative Office (“RO”)?
|
|
A：
|
An RO is a temporary setup established by a foreign company to perform non-commercial, liaison, or market research activities in Malaysia. It allows foreign businesses to explore opportunities without engaging in direct sales or revenue-generating activities.
|
|
Q：
|
What are the permitted activities of the RO?
|
|
A：
|
-
Conduct market research and feasibility studies
-
Coordinate business activities of the parent company within the region
-
Identify potential sources of raw materials or components or investment opportunities
-
Perform research & product development
-
Act as a regional coordination center
-
Other activities not involving direct commercial transactions
|
|
Q：
|
What activities are not allowed under the RO?
|
|
A：
|
(1) Engage in trading, import/export, or any commercial activity
(2) Operate warehouses, storing goods, or handling shipment or delivery arrangements
(3) Entering into contracts, issuing invoices, or providing services in return for payment
(4) Participate in the day-to-day operations of subsidiaries, branches or affiliates in Malaysia
|
|
Q：
|
How long is the RO approval valid for?
|
|
A：
|
The approval for an RO is typically granted for a period of two (2) years.
It may be renewed upon Malaysian Investment Development Authority (MIDA)’s discretion, subject to a review of the RO’s activities and compliance records.
|
|
Q：
|
What are the tax obligations for an RO?
|
|
A：
|
An RO is not subject to corporate income tax, as it is not permitted to conduct any income-generating activities in Malaysia.
However, the RO is required to comply with the following statutory obligations:
-
Employees Provident Fund (EPF) and Social Security Organisation (SOCSO) contributions for local employees
-
Personal income tax obligations for the expatriate representative, based on the salary received in Malaysia.
|
FAQ
