Branch Office in Malaysia

Ready to establish your business presence in Malaysia? Take the first step towards success with Enterslice services for Branch Office Registration in Malaysia.

100000 + Happy Customer

100000 +

Happy Customer

50000 + CA & Lawyers

50000 +

CA & Lawyers

50 + Offices

50 +

Offices

Rated at 4.9 By 30000 + Customers Globally

Google Reviews

9,500+ Happy Reviews4.8/5 | 9,500+ Happy Reviews

REQUEST A CALL BACK

Rated at 4.8 Rated at 4.8/5 9,500+ Happy Reviews

Branch Office Registration in Malaysia

The branch office is not the legal entity in their rights. It is the branch of the foreign parent company and should carry out similar business operations as the parent company. Any obligations which are owed by the Malaysian affiliate The foreign parent company will be held accountable and responsible. The operations of the branch office should be the same as those of the international parent company, and the branch is appropriate for foreign companies who want to extend their business in Malaysia on an early basis.

The Branch office in Malaysia will be registered with the Companies Commission of Malaysia (SSM). The Malaysian Branch is allowed to commence legitimate profit-make activities by independently acting, which is not like the representative office which won’t be allowed to do any commercial activities.

Benefits of Branch Office in Malaysia

There are advantages to setting up a Branch office in Malaysia, which are mentioned as follows:

Malaysia Market

The establishment of a Branch office in Malaysia is one of the easiest options for the companies who wish to move to the jurisdiction. When you set up a Branch office then you can have a great chance of increasing your company’s growth. 

Tax Benefits

The revenue generated within the Malaysia branch will be taxed on that. Multiple double taxation agreements can be enjoyed by Malaysia in place with the other countries.

Easy Registration

The Branch office in Malaysia is not a different legal business with its Articles of Incorporation, there are fewer registration necessities. The registration procedure will be simplified and you can start your business operations in no time after you set up the branch office.

Not restricted to hire Employees

There are no restrictions in the Branch for hiring local employees. As there is no difference in terms of the operations as compared to the Sdn Bhd.

Easy Capital Requirements

You can incorporate the Malaysian Branch office with a share capital also this company type can be registered without any need to credit a minimum share capital which is an advantage when you invest in the new market.

Requirements for Branch Office Registration in Malaysia

You need to understand that when you establish a business in Malaysia as the Branch, your Branch office has to be completely dependent on the parent company and will represent the best interests in the Malaysian market. As we know, the branch office is the legal extension of the Parent company. The operation in Malaysia should be approved by the Parent company overseas. The main key requirements to set up a branch office in Malaysia are mentioned as follows:

Branch office Name

The name of your branch office should be registered with the same trading name as the name of the parent company overseas.

Business Activities Permitted

The business activities of the Branch office should be similar to those of a foreign overseas company.

Liability and ownership

The parent company maintains the branch office in Malaysia, which will then be liable for the responsibilities sustained due to the operations of the branch in this country.

Accounting requirements

The Branch office in Malaysia should file the annual accounting records with the local authorities.

Physical Office

It will depend on your entity’s intended business activity; the branch will need to have valid premises for the business operations. 

Resident agent

If you want to open a branch office in Malaysia, at least one resident agent should be present.

Reporting requirements for the Branch office in Malaysia

In Malaysia, there are reporting requirements for the Branch offices. The branch office in Malaysia needs to file the annual returns to the Companies Commission of Malaysia (SSM) and submit the financial statements to the SSM yearly. The financial statement should be prepared according to the Financial Reporting Standards (FRS), which are issued by the Companies Commission of Malaysia (SSM). The branch office also has to submit the audited financial statement by the approved auditor, which has to be submitted to the SSM within a particular time frame after the end of the financial year. They will also have to file the tax returns with the Island Revenue Board of Malaysia (IRBM) and submit the returns in a particular time frame.

They also have to comply with the other regulations, which are the Foreign Investment Committee (FIC) and Exchange Control Act (ECA) for foreign investment in Malaysia, which can also need additional reporting.

Requirements to open a Corporate Bank account for a Branch office in Malaysia

For the Branch office in Malaysia, you need to open a corporate Bank account, and for that, the required formalities, which can also vary depending on the bank, are as follows:

  1. Memorandum of Association and Articles of Association
  2. List of the appointed directors of the branch and the authorized signatory
  3. The branch office in Malaysia's registered office address
  4. The resolution of the Board of Directors to open the bank account.
  5. The certificate of incorporation of your Branch office in Malaysia
  6. Fill out the forms which are provided by the bank with which you want to work with

Documents for Branch Office Registration in Malaysia

The documents which will be needed for setting up a Branch office in Malaysia are as follows:

  1. The certified copy of the foreign company’s certificate of formation or registration.
  2. A certified copy of the parent company’s statutory documents like the company’s charter, memorandum, articles of association, or any other paper.
  3. The copy of the Mail for the approval verification of the reservation of name.
  4. Form 79 is the return by foreign business, giving the information of directors and the changes in that information.
  5. The attorney power or similar documents can be attested to the fact that the parent company has authorized the person living in Malaysia to accept several documents on behalf of the foreign company.

Steps for the Branch Office Registration in Malaysia

If you are planning for the Branch Office registration in Malaysia, then you have to follow the particular process which is mentioned below:

Company Name Registration

You will have to register your company name with the SSM, and once your company name is approved, it will be then reserved for 30 days from the approval date. Also, you can extend the name reservation every 30 days, and the maximum time is 180 days for the fee of RM50. Your company name, which has been registered, should be the same as the foreign company name for the Branch office registration in Malaysia.

SSM Registration

For the Branch office registration in Malaysia, After the company name’s approval within 30 days, you should register the Branch and submit the compulsory documents from SSM. As of 2022, the trading name of the branch offices registration fees will cost RM 60 annually, and additionally, RM 5 for each branch office opened in Malaysia.

Companies have to tell SSM if there are any updates regarding the shareholding structure, changes in directors, changes in the office address, and changes in registered agents. The fee for updating the register is approximately RM 20.

When you establish a branch office in Malaysia it will also need a business license which depends on future activities. After you issue the required license, this will have a validity of no more than 2 years. The Malaysian Labor Department will accept the document for the renewal applications of the business licenses.

The registration fee of your company will depend on the amount of your shared capital, which are as follows:

  1. The authorized share capital of 400,000, then the fees will be RM 1,000
  2. The authorized share capital is 400,000 – 500,000. Then the fees will be RM 3,000
  3. The authorized share capital of 500,000-1 million then the fees will be RM 5,000
  4. The authorized share capital of 1,000,001- 5 million then the fees will be RM 8,000
  5. The authorized share capital is 10,000,001 – 25million, then the fees will be RM20,000
  6. The authorized share capital of 25,000,001 – 50 million then the fees will be RM 40,000
  7. The authorized share capital of 50,000,001- 100million then the fees will be RM 50,000
  8. If the authorized share capital of 100,000,001 and above, then the fees will be RM 70,000

Opening a Corporate Bank account

After your registration is completed, then your branch has to advance to open a corporate Bank account in Malaysia, and some of the good and upright banks in Malaysia are mentioned as follows:

  1. HSBC Bank
  2. Public Bank Berhad
  3. RHB Bank
  4. Maybank
  5. UOB Bank
  6. Hong Leong Bank Berhad

Branch Annual compliance requirements

The annual compliance requirements for the branch office in Malaysia are as follows:

Tax Filing

All the Malaysian branches have to prepare annually audited financial statements and finish their tax filing. If you fail to do so, then your branch will be subjected to penalties. The branch also has to declare and finish the withholding tax filing, and payment will be made in any overseas remittance of profits.

Annual Return Filling

The branch should make sure that they submit annual returns to SSM in a timely manner. The branch that fails to do so will then be charged with an offence, and if convicted, the company and the directors will face penalties under sections 165 and 169 of the Companies Act 1965.

Responsibilities of the Manager appointed to the Branch office.

The appointed manager will have several responsibilities, which include representing the parent company and managing the day-to-day operations of the Branch office. The manager will be responsible for ensuring compliance with local laws and regulations, which includes filing all the required reports and returns to the Companies Commission of Malaysia (SSM) and other relevant government agencies. In addition, the manager will also be held responsible for the maintenance of the company’s book and records, preparing financial statements, and making sure that the branch office's financial affairs are conducted following the parent company policies and processes.

The managers are held responsible for the management of the Branch office's employees, which includes hiring, performance management, and training. They should ensure that all contracts and agreements that enter into the branch office comply with the parent company policies and the laws of Malaysia. The manager also has to establish a good relationship with the local partners and customers. They have to act in the best interest of the parent company and should also engage in activities that can be damaging to the reputation of the parent company.

To register a branch office in Malaysia, several licenses and approvals may be required depending on the nature of the business activities. Here are the key licenses and approvals typically needed for branch office registration in Malaysia:

Setup your Branch office in Malaysia with Enterslice

We at Enterslice offer comprehensive services tailored to meet the needs of businesses looking to establish a branch office in Malaysia. Our team of experts will make sure for a seamless and compliant registration process we assist with each step of the way. From initial consultation and documentation preparation to registration and compliance management, we are committed to helping our clients navigate the complexities of Malaysian business regulations. Enterslice will provide a reliable and efficient solution for your branch registration in Malaysia. We are dedicated to streamlining your path to success. Start your business now with Enterslice.

Frequently Asked Questions

The company will need to hire employees while developing a business activity through a branch office in Malaysia. There are no restrictions for hiring employees, and companies can hire both foreign and local workforces.

The subsidiary is a separate legal entity, and the branch company is not a separate legal entity. It usually functions and operates independently, which depends upon the ownership stakes. The parent company will be liable if the branch company gets into legal matters with the customers.

The representative office will not be permitted to earn the profit, but the Branch office is permitted to implement specific parent company tasks and might generate profits.

The cost for the registration of the company’s name is RM50.

The Malaysia branch will be subject to local corporate taxes if it generates income in Malaysia then in addition, the branch will be also subject to withholding tax levied at the rate of 10%.

The Branch office is the direct extension of the parent company and will engage in core activities like sales and contracts. It is formed to produce revenue for the company and serve a particular geographic region.

The branch office is located in a location other than the main office, wherever the business is conducted. Many branch offices have smaller divisions in different aspects of the company, such as human resources, marketing, and accounting.

The difference between the branch office and a franchise is that who runs or manages the business. In the Franchise a third party or the franchisee will run the business on behalf of the company However the Branch is run by itself only.

The difference between the headquarters and the Branch office is that the corporate headquarters can or cannot be in the location where the business is incorporated or where the majority of the employees work. Business offices that are not the corporate headquarters will be called branch offices.

The benefits of the Branch office to companies are that they allow one or more company representatives to operate in different geographical locations which is an essential function for many of the businesses providing goods and services.

The branch office is not a separate legal entity; the branch office is the extension of the foreign parent company and should conduct business activities as the parent company. The foreign parent company is held responsible for the debts of the Branch office in Malaysia.

The industries that are booming in Malaysia are the Computer and IT industries which are currently on top as Malaysia’s most demanded sector.

We partner with more than 100+ companies

-- Testimonials

Don't take our word for it

In the news