The Companies Act 2016 (the Act) defines foreign company as follows:
- A company, corporation, society, association or other body incorporated outside Malaysia
- 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 office of business in Malaysia.
The application for the registration of foreign companies in Malaysia is governed by section 562 of the Act. There are 3 options in which foreign companies can establish its presence in Malaysia, namely by establishing a Branch Office, Local Incorporated Subsidiary or Representative Office/Regional Office. The latter is not governed by the Act and may require prior approval from Government Agency, such as the Central Bank, Tourism Ministry or MIDA, depending on which industry sector it wishes to operate.
Section 561 of the Act prohibits a foreign company carrying on a business in Malaysia unless the foreign company is registered as a foreign company under this Act.
The pros and cons of registering a foreign company by way of Branch Office, Representative Office/Regional Office and Local Incorporated Subsidiary are tabulated below.
Press Ctrl button twice to enlarge the table.
As for the application for the registration process of foreign companies, the guidance is as below as stipulated by the Act.
Registration Procedures
i. Name Search and Reservation
An applicant must first conduct a name search to determine if the proposed name for the intended company is available. The name used to register the foreign company should be identical to that registered in its country of origin. Applications for name reservations should be submitted to the Companies Commission of Malaysia (the “CCM”) through the MyCoID 2016 Portal, with a payment of RM50 for each name applied. Once the proposed company’s name is approved by the CCM, it shall be reserved for 30 days from the date of approval.
ii. Submission of Registration Documents
Upon receiving the company’s name approval, applicants must submit the following registration documents to the CCM within 30 days from the date of approval:
a. Application for registration of a foreign company under section 562(1) of the Act;
b. A certified copy of the certificate of incorporation or registration of the foreign company;
c. A certified copy of the foreign company’s charter, statute, or Memorandum and Articles of Association, or any other instrument defining its Constitution;
d. For directors residing in Malaysia who are members of the local board of directors of the foreign company, a memorandum stating that their powers can be executed by or on behalf of the foreign company should be submitted to the CCM;
e. A memorandum of appointment or power of attorney, authorising the person(s) (agent) residing in Malaysia to accept on behalf of the foreign company any notices required to be served on such foreign company;
f. Additional documents including a copy of the application of reservation of name and a copy of the email from the CCM approving the name of the foreign company;
Note: 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.
iii. Registration Fees
Registration fees shall be paid to the CCM as per the following schedule:
- Up to 1,000,000 Share Capital – Fees Payable RM5,000
- 1,000,001 – 10,000,000 Share Capital – Fees Payable RM20,000
- 10,000,001 – 50,000,000 Share Capital – Fees Payable RM40,000
- 50,000,001 – 100,000,000 Share Capital – Fees Payable RM60,000
- 100,000,001 and above Share Capital – Fees Payable RM70,000
In determining the amount of registration fees, the share capital of the foreign company should first be converted to 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 the CCM.
iv. Notice of Registration
A Notice of Registration will be issued by the CCM upon compliance with the registration procedures and submission of duly completed registration documents.
v. Compliance and Reporting
Upon approval, the company or its agent is responsible for ensuring compliance of the Act. Any change in the particulars of the company or in the company’s name must be filed with the CCM within 14 days from the date of change, together with the appropriate fees.
Any change in the share capital of the company must be notified to the CCM within 14 days of such change. Every company is required to keep proper accounting records. Annual returns must be lodged with the CCM once in every calendar year not later than 30 days from the anniversary of its registration date.
Note: Foreigners are advised to seek the services of an accountant and a practicing company secretary for further assistance.
The above is summarized in the below document.
At Megat Faizal Musa & Co, we specialize in accounting/finance, incorporation of legal entities, company secretary, corporate law and corporate advisory.
We are a multilingual firm, proficient in English, Malay, and Chinese languages.
For English/Malay speaking clients, please contact:
E-mail: megat.faizal@mfmco.my
Mobile: +6010 372 6830 (Call/WhatsApp)
For English/Chinese speaking clients, please contact:
E-mail: lee.mf@mfmco.my
Mobile: +6010 381 2996 (Call/WhatsApp)