Registering a Branch Office in Malaysia

The establishment of a branch office

Branch offices are significantly different from regular companies. As the right-hand extensions of the parent company, they are not legally considered independent entities. Therefore, their activities must align completely with those of the parent company, and any decisions they make need to be approved by the parent company. Essentially, they act as an extension of the parent company in Malaysia. Moreover, because they are not independent entities, all debts incurred by the branch office will be the responsibility of the parent company

The registration process is straightforward

Compared to other types of companies, the process of establishing a branch office is simpler and can be completed more quickly

Management is simpler

The activities and major decisions of a branch office are controlled by the foreign parent company. Therefore, management of the branch office is relatively simple for the parent company

Branch Office Registration Procedure

Please note that most small and medium-sized foreign companies register subsidiaries in Malaysia rather than establishing branch offices or representative offices.

Branch offices in Malaysia are considered non-resident companies for tax purposes. Non-resident companies are not eligible for tax incentives available to new startups or resident companies. Additionally, payments made for services provided to branch offices in Malaysia (since branch offices are non-resident for tax purposes) are subject to a withholding tax of 10% + 3%. Given these factors, most foreign companies prefer to establish subsidiaries rather than branch offices.

1. Name search

The applicant must first conduct a name search to determine if the desired name for the company is available. The name used for registering a foreign company should be the same as the name registered in its home country. The application to reserve a name should be submitted to the Companies Commission of Malaysia (SSM) via the MyCoID 2016 platform, with a fee of 50 MYR for each name applied. Once the proposed company’s name is approved by SSM, it will be valid for thirty (30) days from the date of approval.

2. Submit Registration Documents to SSM

After approval, within 30 days from the date of approval, the applicant must submit the following registration documents to the Companies Commission of Malaysia (SSM):

The foreign company registration application form as stipulated under Section 562(1) of the Companies Act 2016
A certified copy of the certificate of incorporation or registration of the foreign company
Certified copies of the foreign company’s constitution, articles, or other documents defining its organizational structure. If a director residing in Malaysia is a member of the foreign company’s local board, a memorandum signed by the foreign company or its representative, indicating the director’s authority, must be submitted to the Companies Commission of Malaysia (SSM)
A letter of appointment or power of attorney authorizing a person residing in Malaysia (agent) to accept any notices delivered to the foreign company on its behalf
Additional documents, including a copy of the name reservation application and an email copy of the approval for the foreign company’s name application issued by the Companies Commission of Malaysia (SSM)

Note: If any of the registration documents are not in Malay or English, a certified translation of the document into Malay or English must be attached

3. Payment of registration fees

The registration fees to be paid to the Companies Commission of Malaysia (SSM) are as follows:

Share capital (RM)	Fees (RM)
1,000,000 or below	5,000
1,000,001 – 10,000,000	20,000
10,000,001 – 50,000,000	40,000
50,000,001 – 100,000,000	60,000
Exceeding 100,000,000	70,000

When determining the amount of registration fees, the foreign company’s share capital should first be converted to Malaysian currency according to the current exchange rate
If the foreign company has no share capital, a flat fee of 70,000 MYR must be paid to the Companies Commission of Malaysia (SSM)

4. Await approval

After complying with the registration procedure and submitting properly completed registration documents, the Companies Commission of Malaysia (SSM) will issue a registration notice

5. Await approval

After approval, the company or its agent is responsible for ensuring that all operations comply with the Companies Act 2016. Any changes to the company’s details or name must be submitted to the Companies Commission of Malaysia (SSM) within 14 days of the change, along with the appropriate fees. Any changes to the company’s share capital must also be notified to SSM within 14 days of the change. Each company must maintain proper accounting records. Annually, within 30 days of each registration anniversary, an annual return must be submitted to SSM

Compliance maintenance responsibilities of a branch office

Please note that most small and medium-sized foreign companies register subsidiaries in Malaysia rather than establishing branch offices or representative offices.

Branch offices in Malaysia are considered non-resident companies for tax purposes. Non-resident companies are not eligible for tax incentives available to startups or resident companies. Additionally, payments made for services provided to branch offices in Malaysia (as branch offices are non-residents for tax purposes) are subject to a withholding tax of 10% + 3%. Given these factors, most foreign companies prefer to establish subsidiaries rather than branch offices.

Display company name and registration number

A branch office should prominently display its registered name and registration number at its registered address and place of business. The branch office’s name, registration number, and registered address should also be shown on its business correspondence, notices, publications (including electronic forms), website, drafts, promissory notes, orders, checks, invoices, receipts, letters of credit, and other forms of business correspondence and documents

Change notification

A branch must notify the Registrar within 14 days of the following changes:

(1) The charter, regulations, or articles of association of the parent company
(2) The directors of the parent company or their names or addresses
(3) The powers held by members of the board of a foreign parent company residing in Malaysia
(4) The agent or their name or address
(5) The registered office of the foreign company
(6) The name of the foreign company; and
(7) The registered office address of the branch or the date and time it is open to the public

When there is a change in the share capital or registered members (for foreign companies without share capital), the branch must notify the Registrar within 30 days of the change

Accounting Records Maintenance

The foreign company must ensure that the accounting records kept in Malaysia are sufficient to explain the branch office’s business transactions and financial position in Malaysia. All transactions must be recorded in the accounting books within 60 days of their completion

Financial Statements

The foreign company must submit its financial statements and a statutory declaration certifying those statements to the registrar within 2 months after its annual general meeting. Additionally, the foreign company must also submit the financial statements of its branch office to the registrar.

If the laws of the foreign company’s home country do not require an annual general meeting and preparation of financial statements, the foreign company must submit its financial statements to the registrar within the prescribed time frame in accordance with the requirements for public companies under the Companies Act 2016

Annual Return

The branch office must submit the annual return to the registrar within 30 days of its registration anniversary. The annual return should include information about directors, shareholders, executives, auditors, and the local agent in Malaysia, as well as the registered address, business address, share capital, and amount of debts

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