Registration of a Branch in Malaysia by Foreign Companies

Can a foreigner set up a company in Malaysia? How do I open a branch office in Malaysia? How do I open a branch? What is a foreign owned company?

All foreign companies wishing to conduct business in Malaysia must be registered with the Malaysian Companies Commission of Malaysia ("SSM" or "Registrar") as a foreign company. Foreign companies registered are often referred to as "branches".

A foreign company may carry on business in Malaysia by registering a branch in Malaysia.

Foreign company is defined as:

(a) a company, corporation, society, association or other body incorporated outside Malaysia; or

(b) an unincorporated society, association or other body which under the law of its place of origin may sue or be sued, or hold property in the name of the secretary or other officer of the body or association duly appointed for that purpose and which does not have its head office or principal place of business in Malaysia.

Requirement for foreign companies to have agent

A foreign company shall at all times appoint an agent in Malaysia who shall -

(a) be answerable for such acts, matters and things that are required to be done by the foreign company; and

(b) be personally liable to all penalties imposed on the foreign company for any contravention unless the agent satisfies the court hearing the matter that the agent should not be liable.

If an agent ceases to to be an agent and the foreign company continues to carry on business or has a place of business in Malaysia, the foreign company shall appoint another agent within twenty-one days from the date the previous agent ceases to be an agent.

Registration Procedures

The registration of a foreign company is as follows:

1. Name Search and Application of Name

(a) An applicant must first conduct a name search in order to determine if the proposed name for the intended company is available. The name to be used to register the foreign company in Malaysia should be the same as the name registered in its country of origin.

2. Application to Register A Foreign Company in Malaysia

(a) Within thirty (30) days from the date of company name approval, the applicant must submit the following information to SSM:

(i) the corporate name, place of incorporation or place of origin, registration number and the registered office of the body corporate;

(ii) the name, identification, nationality and the ordinary place of residence of every person who is appointed as a director of the foreign company in Malaysia;

(iii) the list of its shareholders or members at its place of origin;

(iv) in the case of a foreign company with share capital, the details of class and number of shares at its place of origin;

(v) in the case of a foreign company limited without share capital, the amount up to which the member undertakes to contribute to the assets of the foreign company at its place of origin in the event of its being wound up; and

(vi) the name and address of a person who is a resident in Malaysia, who is appointed by the foreign company as its agent under a memorandum of appointment or power of attorney.

(b) The application shall be accompanied with a statement by the agent of the foreign company confirming his consent for the appointment.

(c) Additional documents consisting of the following should be submitted to SSM:

(i) application for Registration of Foreign Company;

(ii) a certified copy of the certificate of incorporation or registration in its place of incorporation of the foreign company;

(iii) a certified copy of the foreign company's charter, statute or Memorandum and Articles of Association or other instrument defining its constitution;

(iv) if the directors residing in Malaysia are members of the local board of directors of the foreign company, a memorandum duly executed by or on behalf of the foreign company stating the powers of the local directors;

(v) a memorandum of appointment or power of attorney, stating the name and address of one or more persons (agent) residing in Malaysia authorized to accept on behalf of the foreign company, service of process and any notices required to be served on such foreign company;

Where a memorandum of appointment or power of attorney lodged with the Registrar is executed by a person on behalf of the company, a copy of the deed or document by which that person is authorized to execute the memorandum of appointment or power of attorney, verified by statutory declaration, shall be lodged with the Registrar and the copy shall for all purposes be regarded as an original.

(vi) a statutory declaration in the prescribed form made by the agent of the company;

(vii) a copy of application and reservation for availability of names, and

(viii) a copy of an application of reservation of name and a copy of email from SSM notifying approval of reservation of the name of the foreign company.

(d) If any of the described registration documents are in languages other than Bahasa Malaysia or English, a certified translation of such documents in Bahasa Malaysia or English shall be required to be attached.

Registration Fees for Registration of foreign Company

The proposed company name lodged fee is RM50. If the proposed company's name is approved by SSM, it will be reserved for thirty (30) days from the date of approval.

The period of the reserve name could be extended with a prescribed fee of RM50.00 for every thirty days or part thereof with a maximum of 180 days.

Registration fees shall be as per the following schedule:

Share Capital (RM) Fees Payable (RM)

Not more than RM1 million 5,000

Exceeds RM1 million but not exceeding RM10 million 20,000

Exceeds RM10 million but not exceeding RM50 million 40,000

Exceeds RM50 million but not exceeding RM100 million 60,000

Exceeds RM100 million 70,000

In determining the amount of registration fees, the share capital of the foreign company should first be converted to the Malaysian currency (Ringgit Malaysia) at the prevailing exchange rate.

In the event a foreign company does not have any share capital, a flat rate of RM70,000 shall be paid to SSM.

Verification of Incorporation

A Notice of Registration of foreign company will be issued within one working day by SSM upon compliance with the registration procedures and submission of duly completed registration documents.

Certificate of registration of foreign company would be issued by SSM upon request together with prescribed fee.

If you would like to know more, please contact Bestar.