Setting Up Office in MY

Malaysia is one of the few Asian countries that have seen an increase in the number of foreign investors in the last few years. The country hosts several foreign and multinational companies because of the numerous business opportunities it offers. Among the industrial opportunities taken up by foreign investors include; gas, automotive manufacturing, oil, food, luxury products, aerospace, mineral exploration just to mention but a few. Most foreign-owned businesses are located in the capital Kuala Lumpur, particularly in the Klang Valley. It is important to point out that among the world’s major exporters, Malaysia is ranked number 22 and this could be the reason for the increase in the number of foreign investors.

Setting Up an Office In Malaysia Infographic

If you are thinking of setting up a company in Malaysia, there are several things you must know about this country and the business environment as can be seen below:

Types of Companies

Three types of companies are recognized in Malaysia: the Public Liability Company, the Limited Liability Company (LLC) and the general partnership. Just like in other countries, the PLC and the LLC requires a minimum of 2 people and a maximum of 50 shareholders, each having a minimum of two ordinary shares. It is noteworthy to state that partner’s liability to the company is limited to the nominal value of the shares.

A partnership business in Malaysia requires a minimum of 2 shareholders and a maximum of 20. The liability in this type of business is joint, and there is no least amount of capital needed in starting such a company.

Know more about form a company in Malaysia.

Representative or Regional Office

A regional or representative office in Malaysia is regarded as an extension of a foreign company. This type of business structure is loved by most international companies because it is considered to be the easiest when it comes to setting it up. This type of venture allows for the recruitment of both the local Malaysian population into the workforce and a few expatriates.

The Malaysian government gives foreigners who wish to start such a business venture a minimum window period of two years to ascertain whether Malaysia is their preferred country to set up business. To start such a company, you will have to get a permit from the Malaysian Investment Development Authority (MIDA).

How to Set Up a Regional Office in Malaysia

A foreign corporation with a minimum or two years establishment in the manufacturing or service industry is entitled to apply for three years approval by MIDA to set up an office in Malaysia. The office is not allowed to do any commercial or sales activities in the country but to represent its head office and to undertake permissible activities and functions. No tax is imposed on regional offices.

The setting up of the office is not included under the Malaysian Companies Act of 1965. However, the office is allowed to come with a certain number of expatriates, but the number depends on the activities and functions of the office. The foreign workers together with their families are given two years work permits to stay and live in Malaysia.

Setting Up Office In MY

The firm’s head office must have been in existence for a minimum of three years and is required to pay a standard capital of 500,000 ringgits and a proposed annual expenditure of at least 300,000 ringgits per year.

Want to Start business in Singapore
Want to Start business in Singapore

Benefits of Applying for the Approval of Setting Up a Representative Office in Malaysia

The application process is fast and easy. You can apply using profiles and documents of your firm in your home country.

It takes between 60-75 days for the documents to be approved and you can wait for the approval while still living in your home country.

  • You are given a three year window period to ascertain the viability of the business opportunities available and decide whether you want to set up shop in Malaysia before making any investments.
  • You, your spouse and children will receive three years expatriate work Visa.
  • Once approved, it is easy to start and to get visa endorsement for the office.
  • With the work Visa, your spouse is allowed to be employed by any company within the country.

A Branch Office

This is a subsidiary of a company or business that is authorized to provider services but is not allowed to carry out any sales activities or make private purchases. The registration of such an office is done in the Malaysian Trade Register (SSM). A subsidiary office is required by law to put in order audited accounts and submit them to the SSM annually. The branch office should also submit the parent company’s accounts to the SSM and also report the annual salary of all their staff members to the tax department.

Steps on Setting Up a Branch Office

Ensure that the company’s preferred business name is available and does not exist in Malaysia. You can do this by submitting a filled and signed 13A form to the Malaysian Trade register. You can do this online and it will cost you 30 ringgits. This form should also provide the company’s statutory compliance declaration.

Once you are through with the first step, you will be required to produce a file that contains the following important documents:

  • The company’s memorandum
  • The address of the parent company’s head office
  • Private Information of two shareholders
  • The original 13A form and a letter certifying that the name of the company is available

Once you have submitted all the required documents, you will receive a certificate showing the tax number of the company, the company registration status in the Employment Provident Fund, the foundation of the company and the Inland Revenue Board and social security number. This process should be done within the first three months after the reservation of the company’s name is done.

In summary, expanding your business to Malaysia benefit you in terms of the numerous incentives and opportunities offered by this one of the most vibrant countries in Southeast Asia.

Setting up office in Malaysia with our company secretary services allows you to have a better perspective to make wise decisions, which enable you to focus on other business matters.