How to register a Branch Office
A Branch Office in Malaysia is an extension of a foreign parent company registered outside of Malaysia. The purpose of a Branch Office is to facilitate operation and revenue generation in Malaysia for the foreign parent company. It is considered a non-resident for tax purposes, and therefore not eligible for tax incentives and exemptions available to Malaysia private limited companies.
Setup Requirements for Branch Office in Malaysia
- 1 Corporate Shareholder
- 2 Malaysia Resident Agents
- A Registered Office Address in Malaysia
Malaysia Companies Act does not permit foreign companies to self register a Branch Office. You can engage Intergest Malaysia, specialist in registration of companies with ACRA, to assist you with the registration of a Branch Office at Accounting and Corporate Regulatory Authority of Malaysia (ACRA). We can set up your Branch Office in less than 24 hours provided you have all required documents ready.
What you need to know before Registration
Name: The Branch Office name must be the same as the parent company. ACRA must also approve the name before the Malaysia Branch Office can be registered. ACRA will reject a proposed name for the purpose of incorporation if:
- It is identical to another existing business name
- It is undesirable
- Names or trademark which are similar to established names such as Coca Cola and Temasek
Shareholders: The parent company must own 100% of the Branch Office.
Resident Agents: Malaysia Branch Office must have at least two agents who are be “ordinarily” residents in Malaysia. Malaysia resident agents can be Malaysia citizens or permanent resident; or holders of Employment Pass or Dependant’s Pass. Intergest Malaysia can assist you in the application of Employment Pass for the two foreign management staff members relocating to Malaysia to run the Branch Office operations. These management staff members can act as the local agents for the Branch Office upon approval of their Employment Pass applications.
There is no limit on the number of additional local or foreign agents a Malaysia Branch Office can appoint. The agent must be at least 18 years of age, and must not be bankrupt or convicted for any criminal malpractice in the past.
Company Secretary: A Malaysia Branch Office is not required to appoint a Company Secretary. It is, however, highly recommended to have a Company Secretary to help stay in compliance with the statutory regulations.
Registered Address: Every business registered in Malaysia is required to have a registered office address. The registered address must be a physical address and cannot be a PO Box. Use of residential address is allowed for certain types of business.
Memorandum and Articles of Association: The parent company’s Memorandum and Articles of Association must be lodged with ACRA. Memorandum specifies the activities in which the company may engage whereas the Articles of Association specifies the rules governing the internal management of the company.
Taxation of Malaysia Branch Office
Tax Rate for Malaysia Branch Office
A Malaysia Branch Office is considered a non-resident company for tax purposes.
Non-resident companies are not eligible for tax incentives for new start up or resident companies; and therefore most foreign companies prefer to set up a Subsidiary Company rather than a Branch Office.
Employment passes for Branch Office Employees
Work Visa for Staff: Foreign Corporation that plans to relocate their management staff to Malaysia to run their new Malaysia Branch Office setup must apply for Employment Pass.
Branch Office without Relocating any staff: Foreign corporations that do not intend to relocate foreign staff members to Malaysia to operate the Branch Office can engage Intergest Malaysia Nominee Agent Service to appoint two local agents to fulfill the registration requirement.
The registration process with ACRA is a two-step process:
- Name approval
- Branch Office registration
ACRA does not allow foreign companies to self-register. You can engage Intergest Malaysia to assist you in registering your Branch Office. It is not necessary for you to be in Malaysia for the registration of the Branch Office. The approval process takes approximately between 1-2 days provided all documents are in place.
Opening of a Corporate Bank Account
Once the Branch Office has been incorporated, you may open a corporate bank account with any of the local or international banks based in Malaysia, and in some cases, overseas.
If you are unable to come to Malaysia, you may choose a bank that allows opening of a corporate bank account without your presence. Standard Chartered Bank and HSBC are two of the international banks that allow you to open a bank account without you having to be Malaysia.
Quick Contact InterGest Malaysia
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