A Representative Office allows foreign companies a period of 2-5 years to see if Malaysia is the right place for them to stay and to start their business by setting up a company or branch. The approval for the duration of an establishment of the representative office depends on the merits of each case. There is no tax imposed on a representative office.

A Representative Office is an office of a foreign company / organisation to collect relevant information on investment opportunities in the country 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).

The RO can undertake any of the following activities:

  1. Gathering information on investment opportunities in Malaysia and the region;
  2. Identifying components, sources of raw materials, or suppliers;
  3. Undertake market research and development;
  4. Act as a coordination center for the parent company’s affiliates, agents, and subsidiaries in the region; and
  5. Other activities that do not result in commercial transactions.
 

The operational expenditure of the Representative Office must be at least RM300,000.00 per annum. Nevertheless, upon approval, the condition imposed will be based on the operational expenditure as proposed by the Representative Office.

The approved Representative Office / Regional Office is not allowed to conduct the following activities:

  1. Engaged in any trading (including import and export), business or any form of commercial activity;
  2. Lease warehousing facilities; any shipment / transhipment or storage of goods shall be handled by a local agent or distributor;
  3. Sign business contracts on behalf of the foreign corporation or provide services for a fee; and
  4. Participate in the daily management of any of its subsidiaries, affiliates or branches in Malaysia.
 

Our professionals will be able to help you setting up a Representative office in Malaysia!