Representative and Regional Office Setting Up in Malaysia- The Definition
Foreign companies who wish to explore Malaysia for opportunities of investment and/or to perform co-ordination activities for their Head Office, it is encourage to know more about how to set up Representative Office and Regional Office Setting Up in Malaysia. The major difference between Representative/Regional Office from the Malaysia Private Limited Company Sdn Bhd is no commercial (sales) transaction is allowed for the Representative/ Regional office.
The type of office (Representative/Regional) to be set up depends on the nature of business, geographical serving within and around Malaysia.
Representative and Regional office setting up in Malaysia would allow all foreign-based companies to have a presence in Malaysia together with their expatriates to explore business opportunities in Malaysia for those who are new to Malaysia. In short, it gives you an opportunity for a “window of two to five years” to see if Malaysia is the right place for your stay and start business! The approval for duration of establishment of the Representative/Regional office of two to five years depending on the merit of each case.No tax will be imposed onto Representative/Regional Office.
Representative and Regional Office Setting up in Malaysia- The Criteria To Join
It is for a foreign company of minimum two-years (2) establishment in the manufacturing and services sector is entitled to apply for 2 to 5 years’ approval to set up a Representative and Regional office in Malaysia to perform permissible activities for its Head Office. The Representative and Regional Office do not undertake any commercial activities but only represents its Head Office to undertake designated functions and permissible activities by MIDA . The operation cost of Representative or Regional Office is completely funded from sources outside Malaysia by their Head Office.
The Representative and Regional Office setting up in Malaysia is not required to be incorporated under the Malaysia Companies Act 2016. The office’s approval can be accompanied by their expatriate post and the number of expatriates allowed depends on the functions and activities of the Representative and Regional Office in Malaysia. The approved expatriates together with their family will be given a 2-years work permit.
Permissible activities for Representative and Regional Office Setting Up in Malaysia is as follows:
- Gathering and analysis of important information or undertaking feasibility studies on investment and business opportunities in Malaysia and the region;
- Planning or coordination of business activities;
- Identifying sources of raw materials, components or other industrial products;
- Undertake research & product development;
- Act as a coordination center for the corporation’s affiliates, subsidiaries and agents in the region; and
- Other activities which will not result directly in actual commercial transactions
The Representative/Regional Office operational proposed expenditure must be at least RM300,000 per annum.
The activities are not allowed under Representative/Regional Office is as follows:
- Be engaged in any trading, business or any form of commercial activity
- Lease warehousing facilities
- Sign business contracts on behalf of foreign corporations or provide service for a fee
- Participate in daily management of any of its subsidiaries, affiliates or branches in Malaysia.
Once you found good and sustainable opportunities in Malaysia, you take further step to upgrade by incorporating a local Malaysia Private Limited (Sdn Bhd) company or labuan company to perform your commercial activities.
What is the difference between Representative and Regional Office?
A Representative Office is approved to collect relevant information on investment opportunities in Malaysia especially in the manufacturing and services’ sector, enhance bilateral trade relations, promote the export of Malaysian goods and services and carry out research and development (R & D).
A Regional Office is approved to serve as the coordination center and designated activities for the company’s affiliates, subsidiaries and agents in South-East Asia and the Asia Pacific regions.
Why apply for Representative/Regional Office Setting Up in Malaysia’s approval:-
- Fast and easy-apply simply using your profiles and documentations of your company in your country!
- Fast approval within 60 -75 days! You can apply while you are staying in your home country
- Save cost – without the need to be immediate set up a Malaysian Private Limited Company (Sdn Bhd) to explore opportunities in Malaysia
- You will be entitled to do survey and fact finding on opportunities by having the “window of three years” to see if Malaysia is the right place for your investment before you invest a single penny!
- You and your dependents (spouse and children of under age 21) will be entitled to three years’ Expatriate Work visa
- Your spouse owning the dependent visa can be legally employed by any company in Malaysia
- After approval of the office, simple procedure to follow to get started and visa endorsement
- Easy to comply with the local authorities for the rules and regulations for the office’s approval
Not every establishment is eligible for Representative/Regional’s approval, it depends on the the business profile, business activities, nature and plan as well expatriates’ profile. To evaluate the eligibility, please fill in the following RE-RO Form:
Feel free to contact us at +603-2181 2882. We ‘simplify your investment” in Malaysia!