Application for Registration of Foreign Company
A Comprehensive Guide to Registering a Foreign Company in Malaysia Under Section 562
Understanding Section 562
Section 562 of the Malaysian Companies Act 2016 allows foreign companies to establish a presence in Malaysia without incorporating a local subsidiary. This is particularly useful for companies that intend to conduct business on a temporary or limited basis.
Foreign Company Registration in Malaysia
The application for registration of a foreign company under Section 562 of the Malaysian Companies Act 2016 involves several steps and documentation. Here's a general outline of the process:
1. Appointment of a Registered Agent:
Choose a registered agent in Malaysia to represent your foreign company. This agent will handle communications with the Companies Commission of Malaysia (CCM).
2. Submission of Required Documents:
Form 14A: This form is used to apply for registration of a foreign company.
Certificate of Incorporation: A certified copy of the foreign company's certificate of incorporation from its country of origin.
Memorandum and Articles of Association: Certified copies of the foreign company's memorandum and articles of association.
Power of Attorney: A document authorizing the registered agent to act on behalf of the foreign company in Malaysia.
List of Directors and Shareholders: A list of the foreign company's directors and shareholders, including their names, addresses, and nationalities.
Proof of Paid-up Capital: Evidence that the foreign company has the required minimum paid-up capital.
Declaration of Compliance: A declaration stating that the foreign company complies with the requirements of the Companies Act 2016.
3. Payment of Fees:
Pay the prescribed fees to the CCM.
4. Submission of Application:
Submit the completed application form and supporting documents to the CCM.
5. Review and Approval:
The CCM will review the application and supporting documents. If everything is in order, they will approve the registration of the foreign company.
6. Issuance of Registration Certificate:
Once approved, the CCM will issue a registration certificate to the foreign company. This certificate is proof of its registration in Malaysia.
Additional Considerations:
Name Reservation: The foreign company's name must be unique and not conflict with any existing company names in Malaysia.
Tax Implications: Foreign companies conducting business in Malaysia are subject to corporate tax.
Regulatory Compliance: The foreign company must comply with all applicable Malaysian laws and regulations, including labor laws, environmental regulations, and industry-specific requirements.
Local Presence: While Section 562 allows foreign companies to operate without a physical presence, having a local office or representative can often be beneficial for building relationships and conducting business effectively.
By following these steps and seeking professional assistance, foreign companies can successfully establish a presence in Malaysia under Section 562 and take advantage of the opportunities offered by the Malaysian market.
Fee
Pay the prescribed fee to the CCM.
Application for registration of foreign company under section 562 of the Act | Fees (RM) |
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Tax and Regulatory Considerations for Foreign Companies in Malaysia
Tax Implications
Foreign companies operating in Malaysia are subject to corporate income tax. The tax rate varies depending on the company's size and nature of business. However, there are several tax incentives available to encourage foreign investment.
Pioneer Status: Companies granted pioneer status enjoy a tax holiday for a specified period.
Investment Tax Allowance (ITA): ITA provides a tax deduction for qualifying capital expenditures.
Export Incentives: Companies with significant export activities may be eligible for tax exemptions or reductions.
Regulatory Compliance
Foreign companies must comply with various Malaysian regulations, including:
Labor Laws: Adherence to minimum wage, working hours, and labor rights regulations.
Environmental Laws: Compliance with environmental protection standards and regulations.
Industry-Specific Regulations: Specific regulations may apply to certain industries, such as financial services, manufacturing, or technology.
Foreign Exchange Control: Compliance with foreign exchange regulations, particularly for companies repatriating profits or dividends.
Key Regulations to Consider
Companies Act 2016: Governs the formation, operation, and winding up of companies in Malaysia.
Income Tax Act 1967: Outlines the tax rules and regulations applicable to companies and individuals.
Service Tax Act 2018: Imposes a tax on certain services provided in Malaysia.
Sales Tax Act 1972: Imposes a tax on the sale of goods within Malaysia.
Environmental Quality Act 1974: Sets out environmental protection standards and regulations.
Occupational Safety and Health Act 1994: Ensures safe and healthy working conditions.
Key areas where professional advice can be valuable include:
Tax structure optimization
Compliance with tax reporting and payment requirements
Negotiating tax incentives
Understanding and adhering to labor and environmental regulations
Managing foreign exchange control requirements
By working with qualified professionals, foreign companies can effectively navigate the tax and regulatory landscape in Malaysia and ensure a smooth and successful operation.
How Bestar Can Help Foreign Companies in Malaysia
Bestar can provide invaluable assistance to foreign companies operating in Malaysia. Our expertise can help navigate complex legal and regulatory environments, optimize tax liabilities, and ensure compliance with local laws.
Key Areas of Assistance:
Company Formation and Registration:
Guidance on the most suitable legal structure: Determining whether to establish a wholly-owned subsidiary, branch office, or representative office based on the company's business objectives and risk tolerance.
Assistance with the registration process: Ensuring compliance with all necessary documentation and procedures.
Advice on name selection: Helping choose a company name that is unique and complies with local regulations.
Tax Planning and Compliance:
Tax structure optimization: Identifying tax-efficient structures to minimize tax liabilities.
Tax incentive application: Assisting with the application for tax incentives, such as pioneer status or investment tax allowance.
Tax return preparation and filing: Ensuring accurate and timely filing of tax returns.
Transfer pricing compliance: Advising on transfer pricing policies to avoid double taxation and comply with local transfer pricing regulations.
Regulatory Compliance:
Understanding and adhering to local laws: Providing guidance on labor laws, environmental regulations, industry-specific requirements, and foreign exchange control regulations.
Obtaining necessary licenses and permits: Assisting with the application for required licenses and permits.
Compliance with reporting requirements: Ensuring timely submission of annual returns and other required reports.
Contractual Matters:
Drafting and reviewing contracts: Preparing and reviewing contracts with local partners, suppliers, and customers.
Dispute resolution: Providing advice on dispute resolution mechanisms, such as negotiation, mediation, or arbitration.
Intellectual Property Protection:
Registration of intellectual property: Assisting with the registration of trademarks, patents, and copyrights.
Licensing and technology transfer: Advising on licensing agreements and technology transfer arrangements.
Corporate Governance:
Adhering to corporate governance best practices: Ensuring compliance with corporate governance standards and principles.
Board and shareholder meetings: Providing guidance on board and shareholder meetings and resolutions.
Employment Law:
Hiring and termination procedures: Advising on employment contracts, hiring procedures, and termination processes.
Employee benefits and compensation: Assisting with the design and implementation of employee benefits and compensation packages.
By engaging the services of Bestar, foreign companies can benefit from our expertise, reduce risks, and enhance their operations in the Malaysian market.
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