Malaysia Representative Office Setup

Setting Up Representative Office in Malaysia

What is a representative office?

Representative offices (RO) allow foreign-based companies to establish a presence in Malaysia along with their expatriate employees to explore business opportunities within the country.

The establishment of a Representative Office allows foreign companies the opportunity to assess whether Malaysia is the right place for them to stay and to start their businesses by establishing a company or branch. An establishment of a representative office may be approved for a limited period based on the merits of each case. Representative offices are not subject to taxation.

A representative office is an extension of the foreign company’s headquarters

Activities permitted by the representative office

Gathering important information and conducting feasibility studies concerning investment and business opportunities in Malaysia and the region
Organizing business activities
Including research and product development
Analyzing data and preparing reports
Services related to bookkeeping and payroll
Compilation of bank statement reports monthly
Compiling management financial reports monthly

Activities not permitted by the representative office

A representative office/regional office, however, is not permitted to engage in the following activities:

Engage in any kind of trade (including imports and exports), business, or other commercial activity
Lease warehousing facilities; any shipment/transhipment/storage of goods must be handled by an authorized local representative or distributor
Execute business contracts on behalf of the foreign corporation or perform services for a fee
Participate in the day-to-day operations of any of its subsidiaries, affiliates, or branches in Malaysia

Establishment period:

Expatriate Posts:

Each Representative office/Regional office will receive expatriate posts, and the number will depend on the functions and activities of the office. Only managerial and technical positions are open to expatriates. A work permit will be granted for a minimum of two years and is renewable.

Expatriates employed by a Representative Office are subject to ordinary income taxes. For an expatriate working in a Regional Office, however, taxation is based only on the portion of their taxable income related to the number of days spent in the country.

Procedure for Application:

Documents required to establish a representative office

Please complete the application form with information such as the purpose of the establishment, activities of the proposed office, benefits to Malaysia from the establishment of this office, estimated cash flow and human resources arrangements for the proposed office.
A copy of the certificate of incorporation of the parent company
Business profile of the parent company
Copy of the parent company’s latest annual report and audited financial statements for the past two years
Passport copy
1 recent passport photo
Educational certificates (above high school)
Resume copy
Previous employment testimonials and appointment letters
Tenancy agreement for the business operations address in Malaysia

A document of approximately one to two pages that outlines:

A detailed description of the duties the applicant will be performing
A detailed description of the company’s activities and/or products

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JS Partners was established in 2009 by Managing Director Datin Shivajini Seelan and her team of experts.