Types of Foreign Companies StructureSubsidiary Company / Private Limited CompanyBranch OfficeRepresentative Office (RO)
Entity NameNeed not be the same as parent companyMust be the same as parent companyMust be the same as parent company
Allowed ActivitiesCan conduct all business activities*Must be the same as the parent companyCan only conduct market research or coordinating activities
Suitable ForFor local or Foreign Companies that wish to expand their operations in MalaysiaFor Foreign Companies that wish to expand their operations in Malaysia for short term basisFor Foreign Companies that wish to set up temporary vehicle in Malaysia to conduct research and act as liaison office and other activities which will not result directly in actual commercial
OwnershipCan be 100% foreign* or locally owned100% owned by the head officeNo Ownership
Separate Legal EntityYesNoNo
Cap on Number of MembersYes, max 50Not ApplicableNot Applicable
Minimum Setting up Requirement–  Min one shareholders or can be solely owned by a corporate body (either 100% local or 100% foreign-owned*) allowed.

–  One resident director are required, who need not be Malaysians but must have valid work permits and a principal residential address within Malaysia.

–  Practising company/ qualified secretaries, public accountants or lawyers who are registered with the Companies Commission of Malaysia (CCM) can provide assistance with the incorporation documents and other requirements.

Must have at least one Malaysia Resident Agent to set up the Branch–  The proposed operational expenditure of the RE must be at least RM300,000 per annum.

–  The RE should be financed by funds emanating from sources outside


Limited LiabilityYesNo, Liabilities extend to parent companyNo, Liabilities extend to parent company
Need for Audited AccountsYesYesNo
Filing of Accounts with SSM and LHDNYesYesNo
Annual FilingMust file audit report of subsidiaryMust file branch office’s as well as parent company’s audit reportsNot Applicable
Tax Treatment– Taxed as Malaysia resident entity, local tax benefits available
– Tax at 17% on first RM600,000  and 24% at next RM600,000 of chargeable income Malaysian sourced income (profit, adjusted for tax purposes).– Tax incentives may be available depending on the type of activity undertaken and subject to meeting eligibility conditions.
– Taxed as non-resident entity, local tax benefits not available
– Tax at 24% on profits attributable to the branch (subject to tax adjustments).
– Withholding tax of 10% + 3% is applicable on payments made to the branch for services performed in Malaysia (as branch is a non-resident for tax purposes)
– Generally tax incentives are not available to branch.
Not Applicable
Appointment of OfficersMust appoint at least one resident director to set up the CompanyMust appoint at least one resident agent to set up the BranchNot Applicable
Staff HiringNo restrictions on hiring local or foreign staffNo restrictions on hiring local or foreign staffA Representative office/Regional office will be given expatriate post and the number allowed depends on the functions and activities of the Regional Office/Representative Office. Expatriates will only be considered for managerial and technical posts.

The proposed expatriate must be currently employed by the applicant company or its subsidiary or within the group.

Registration fee for branch office

Registration fees payable to SSM shall be as per the payment schedule below:

Up to 1,000,0005,000
1,000,001 – 10 Million20,000
10,000,001 – 50 Million40,000
50,000,001 – 100 Million60,000
Exceeding 100 Million70,000


  1. In determining the registration fees, the nominal share capital either authorised or paid up of the foreign company should first be converted to the Malaysian currency (Ringgit Malaysia) at the prevailing exchange rate.
  2. In the event a foreign company does not prescribe any share capital, a flat rate of RM70,000.00 shall be paid to SSM.

  • 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. Besides, withholding tax of 10% + 3% is applicable on payments made to the branch for services performed in Malaysia (as branch is a non-resident for tax purposes). In view of this, most foreign companies prefer to set up a Subsidiary Company rather than a Branch Office.
  • On the other hand, Representative Office is suitable for foreign company who want 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). Representative Office is prohinited from undertake any commercial activities and only represents its head office/principal to undertake designated functions.