Establish a Branch in Malaysia
Updated on Thursday 16th February 2017
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According to the legislation applicable in Malaysia, any foreign company is allowed to establish a branch here. A branch is a legally dependent entity on the parent company, which can be opened in any other place. This type of business is allowed to conduct businesses in Malaysia, usually representing a division of the entire company. Our team of company incorporation specialists in Malaysia can provide an in-depth presentation on the legal aspects of a branch and the minimum requirements necessary to set up this type of structure.
Characteristics of a branch in Malaysia
It is important to know that, when opening a company in Malaysia set up as a branch, the entity will be fully dependent on the parent company, representing its interests on the Malaysian market. The branch is seen as an extension of the parent company and it is not allowed to implement any business decisions without the consent of the main company.
More details on the characteristics of branch in Malaysia are available in the presentation below:
In the situation in which the branch incurred debts through its activity in Malaysia, the investors should know that the parent company will become fully liable for these debts. At the same time, a branch office in Malaysia will not be considered a tax-resident here and, as a consequence, the company will not be required to pay corporate taxes in Malaysia.
Foreign businessmen should also take into consideration the fact that the business can’t be a beneficiary on any tax exemptions available for other companies in Malaysia; the rule is applicable to governmental incentives as well. Our team of company registration representatives in Malaysia can provide more details on this matter.
Register a branch in Malaysia
Although the branch is not liable to taxation in Malaysia, the company will still have to be registered at the Companies Commission Malaysia, prior to its business activities here. As a general rule, the branch must undertake business activities which are carried out by the parent company. From a management point of view, the legal requirements stipulate that a branch should be represented by two Malaysian residents.
Persons interested in receiving further information on the requirements for a branch can contact our team of company formation agents in Malaysia.