This guide provides information on criteria and process for foreign companies to set up a representative office in Malaysia and obtain working visas. It also provides information on document and details required for successful application for representative office and working visas in Malaysia. Last updated in June 2023.
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What are the benefits of setting up a Representative Office (RO) in Malaysia?
By establishing a RO in Malaysia, foreign companies can quickly and easily obtain working visas for their personnel to carry out non-commercial activities. The RO provides a platform for companies to explore and gain insight into the Malaysian market without committing significant financial resources, and can also serve as a hub for networking and business development activities. This is also the most economical way to obtain working visa for those who need to stay in Malaysia for market survey and research.
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What activities are allowed for an RO in Malaysia?
An RO in Malaysia is only authorized to participate in non-income generating activities such as market research, market promotion, and liaison activities. It is not allowed to engage in commercial activities that generate income in Malaysia.
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What documents are needed to set up a RO in Malaysia?
Foreign companies interested in setting up a RO in Malaysia must submit the following documents:
(a) A copy of the company’s certificate of incorporation or registration in their home country
(b) Audited Financial Statements of the parent company for the past two years
(c) A completed application form to MIDA submitted by a qualified person
(d) A company profile and description of business activities
(e) A list of personnel requiring a working visa, along with their copy of passport, CV and proof of qualifications
(f) A projected budget and proposed duration of operations in Malaysia with an estimated expense of around RM300,000.00 per year, which may be used for accommodation, travelling and other operating expenses during your employee’s stay in Malaysia.
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What is the time frame required for the setting up a RO in Malaysia?
The process typically takes about 1 month.
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What is the time frame required for the visa application process in Malaysia?
The process of visa application typically takes 2 to 3 months.
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What type of visa is granted for RO expatriate staff in Malaysia?
The staff of a RO in Malaysia can obtain a working visa known as employment pass valid for 2 to 5 years, depending on the company’s needs.
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Can a Representative Office in Malaysia hire local employees?
Yes, a RO in Malaysia is allowed to hire local employees as support staff to assist with its non-income generating activities.
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Is there a minimum capital requirement for setting up a RO in Malaysia?
No, there is no minimum capital requirement for setting up a RO in Malaysia.
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Can a RO in Malaysia be converted into a fully-fledged company in the future?
Yes, a RO in Malaysia can be converted into a fully-fledged company if the foreign company decides to expand its business activities into the Malaysian market in the future.
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Is there a limitation on the number of expatriates that can work in a RO in Malaysia?
Yes, there is a limitation on the number of expatriates that can work in a RO in Malaysia. The number is usually capped at 3 to 5 staff members, depending on the company’s needs and the approval of the relevant authorities.
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What is the tax treatment for a RO in Malaysia?
A RO in Malaysia is not taxed on its non-income generating activities as it is not considered a taxable entity. However, its expatriate staff may be subject to income tax in Malaysia, depending on their individual circumstances.
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What is the time frame required for the setup process?
The process typically takes 2 to 3 months.
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What are other options for obtaining visa in Malaysia?
You may obtain visa for long stay in Malaysia by: –
(a) MM2H Program
The Malaysia My Second Home (MM2H) Program is aimed at attracting foreigners for long-term stays in Malaysia. Read more here.(b) Setting Up Company in Malaysia
To set up a company to carry out business and obtain the necessary business licenses. Applicant need to commit to minimum paid up requirement before the company is eligible to apply for working visa for its foreign employee. Read more here.(c) Invitation by a Malaysian company to work as director or senior management personnel, whereby the company will secure a work permit for you.