A Representative Office (RO) or Regional Office (RRO) lets a foreign parent company explore Malaysia’s market, coordinate regional operations, or support existing customers without incorporating a local entity. Approvals are issued by the Malaysian Investment Development Authority (MIDA); banking/finance ROs are vetted by Bank Negara Malaysia (BNM).
1 | Quick Facts
| Item | Details | Source |
|---|---|---|
| Governing law | Promotion of Investments Act 1986 & CA 2016 | – |
| Regulator | MIDA (most sectors) / BNM (financial) | MIDA |
| Legal status | Not incorporated under CA 2016; parent is liable | MIDA |
| Duration | Initial 2 years, renewable (higher OPEX required on first & subsequent renewals) | MIDA |
| Minimum OPEX | RM 300 000 per year (financed from offshore) | MIDA |
| Staff mix | Target ratio 2 expatriates : 1 Malaysian; min salary RM 5 000 for expats | MIDA |
| Tax | No corporate tax (no local revenue). Staff income is taxable in MY. | - |
2 | Permitted vs. Prohibited Activities
Permitted (illustrative)
- Market/feasibility studies and data collection
- Coordinating regional marketing or sourcing
- Liaising with HQ & affiliates; technical support
- R&D or product localisation work that does not generate direct sales
Not Permitted (“red-flag” actions)
- Trading, importing/exporting, charging fees
- Issuing invoices or signing contracts
- Daily management of Malaysian subsidiaries
- Warehousing or logistics operations
If your planned work strays into revenue-generating territory, incorporate a subsidiary or branch instead.
3 | Eligibility Checklist
- Foreign parent in manufacturing, services or other promoted sectors.
- Commit ≥ RM 300 000 annual operating budget (higher for renewals/large groups).
- Funding must be remitted from outside Malaysia.
- Commercial office premise (no home or co-living addresses).
4 | Application Documents
(Upload on MIDA’s InvestMalaysia e-TRANS portal)
| # | Document |
|---|---|
| 1 | Parent company Certificate of Incorporation (notarised / consularised) |
| 2 | Last 2 years’ audited financial statements |
| 3 | Parent corporate profile & group chart (EN) |
| 4 | Proposed Malaysian RO business plan & OPEX budget |
| 5 | Office tenancy draft or search letter |
| 6 | Power-of-Attorney appointing Malaysian authorised signatory |
| 7 | For expatriate posts: passports, CVs & certified academic certificates |
Banking/finance or tourism ROs file via BNM or MOTOUR, not MIDA.
5 | Step-by-Step Registration Timeline
| Day | Action |
|---|---|
| 0 | Gather notarised docs; remit initial OPEX to Malaysian bank in parent’s name |
| 1 | Create InvestMalaysia account → complete RO/RRO e-Form (Section 562 equivalent) |
| 1–2 | Pay no SSM fee (ROs aren’t companies) – only portal processing |
| 5–10 | MIDA evaluation; queries answered via portal |
| 10 | Approval Letter issued – valid 6 months to set-up |
| 11–20 | Sign office lease; register for ESD (Expats Service Division) & apply Employment Passes |
| 30 | Open local bank account, register payroll files (EPF/SOCSO/e-Levy) |
Normal processing: ~3–4 weeks not counting certification courier.
6 | Post-Approval Compliance
| Obligation | Frequency | Note |
|---|---|---|
| Annual activities / progress report to MIDA | Every 12 mths | Submit before renewal application |
| EPF & SOCSO registration | Once, then monthly | Mandatory for any Malaysian hires |
| Income tax file for employees | Within 30 days of first payroll | Form E & EA each YA |
| Renewal | Apply ≥ 3 months pre-expiry; OPEX raised to RM 600 k for 1st extension (non-conglomerate) | MIDA |
| Exit | Notify MIDA + Inland Revenue; close bank; cancel passes | — |
7 | Representative vs. Branch vs. Subsidiary
| Feature | RO/RRO | Branch | Subsidiary (Sdn Bhd) |
|---|---|---|---|
| Legal form | Unincorporated | Foreign company (SSM) | Malaysian company |
| Revenue allowed? | No | Yes | Yes |
| Parent liability | Unlimited | Unlimited | Limited |
| Tax on profits | N/A | 24 % flat | 24 % / SME tier |
| Approval body | MIDA / BNM | SSM | SSM |
| Set-up speed | 3–4 weeks | 1 week | 3–5 days |
| Typical use | Market study, liaison | Project-based, risk retained | Long-term ops |
8 | Common Pitfalls
- OPEX too low – MIDA often rejects budgets under RM 300 k.
- Submitting incomplete translations – all critical docs must be in English or Bahasa.
- Missing progress reports – jeopardises renewal.
- Using RO to sign contracts – breaches conditions; may lead to revocation.
9 | Our End-to-End RO Setup Package
- Feasibility check: RO vs Branch vs SubCo tax & regulatory impact.
- Document legalisation, certified translations & digital portal filing.
- Local authorised signatory & registered office.
- Employment Pass application & payroll onboarding.
- Annual MIDA progress report & renewal management.
Last Update: 28-Apr-2025