Registering a Foreign Company (Branch) in Malaysia

An overseas company can sell into Malaysia from abroad for a long time — but the moment it opens an office, signs local leases, or sets up staff on the ground, it crosses a line. Once it is carrying on business in Malaysia, the Companies Act 2016 says it must register first, and doing that turns the same overseas company into a Malaysian-registered branch.

This guide covers how that registration works under section 562, what a branch needs to stay compliant, and why many foreign investors skip the branch and incorporate a local subsidiary instead.

When does an overseas company have to register?

Section 561 of the Companies Act 2016 prohibits a foreign company from carrying on business in Malaysia unless it is registered as a foreign company with the Companies Commission of Malaysia (SSM). “Carrying on business” is read broadly — under section 561(3) it captures activities such as establishing or using a share transfer or share registration office, or administering, managing or otherwise dealing with local property as agent, legal personal representative or trustee, not just running a shopfront.

A “foreign company” is a body corporate incorporated outside Malaysia, or an unincorporated body that can sue and be sued and has no head office or principal place of business in Malaysia. If that describes your entity and it wants a physical, ongoing presence in the country, registration is not optional.

What registration does not do is create a new company. The branch is the same legal person as the overseas parent. Everything the branch does, the parent is answerable for.

What does the section 562 application need?

Registration is an application to SSM under section 562, filed after a name search clears the parent company’s name (a branch registers under the parent’s existing name — it cannot invent a new one). The core documents are:

• A certified copy of the foreign company’s certificate of incorporation (or equivalent registration document).
• A certified copy of its constitution / memorandum and articles or charter defining its structure.
• A list of its directors and, where relevant, particulars of local directors.
• A list of shareholders or members at the place of incorporation and its share capital details.
• A memorandum of appointment or power of attorney naming a Malaysia-resident person to act as the company’s agent, plus that agent’s written consent.
• The registered office address in Malaysia and the place of business, if different.

Once SSM is satisfied, it issues a notice of registration and the foreign company is on the register.

How much are the registration fees?

The one-off registration fee is not flat — it is scaled to the parent company’s share capital, converted to Ringgit at the prevailing exchange rate. The higher the parent’s capital, the higher the fee. A parent with no share capital pays the top flat rate.

Share capital of the foreign company	Registration fee (RM)
Not exceeding RM1,000,000	5,000
Exceeds RM1,000,000 but not RM10,000,000	20,000
Exceeds RM10,000,000 but not RM50,000,000	40,000
Exceeds RM50,000,000 but not RM100,000,000	60,000
Exceeds RM100,000,000	70,000
No share capital	70,000 (flat)

Source: SSM Table of Fees for registration of a foreign company under section 562 (Companies Regulations 2017), corroborated by the MIDA fee schedule.

This scaling often surprises first-time applicants: a well-capitalised multinational can face a RM70,000 registration bill for a branch, whereas incorporating a fresh local company carries a far smaller incorporation fee. That cost gap is one reason the subsidiary route is popular.

Who is the local agent, and why does it matter?

A foreign company cannot register alone — under section 563 it must appoint at least one agent who is resident in Malaysia. The agent is the company’s authorised local representative for regulatory purposes: they are answerable for the company doing everything the Act requires of it, and can be personally liable for penalties imposed on the company for non-compliance.

That is a real exposure, not a formality. Anyone agreeing to act as agent — often a professional firm or a trusted local individual — is accepting responsibility that the branch files what it must, when it must. Changes to the agent’s particulars are themselves notifiable to SSM under section 563.

The branch must also keep a registered office in Malaysia to which communications and notices can be addressed, and notify SSM of any change to that office.

What does a branch have to file each year?

Registration is the start of an ongoing compliance relationship, not a one-off. A registered foreign company must, among other duties:

• Lodge an annual return once in every calendar year, within 30 days of its registration anniversary (section 576).
• File financial statements with SSM (section 575), typically copies of the accounts the parent prepares in its home jurisdiction, in the form required there.
• Notify SSM within the statutory window of changes to directors, the agent, the registered office, the company name, or the constituent documents.

Missing these deadlines exposes both the company and its local agent to penalties, which is exactly why the agent role carries weight.

Branch or subsidiary — which structure fits?

The branch is only one of two common routes for a foreigner establishing a presence. The other is incorporating a private limited company — a Sendirian Berhad (Sdn Bhd) — which is a brand-new Malaysian legal entity that the foreign company owns. The choice shapes liability, tax posture and set-up cost.

Feature	Foreign company (branch)	Local subsidiary (Sdn Bhd)
Legal status	Extension of the overseas parent — same legal person	Separate Malaysian legal entity
Liability	Parent bears all the branch’s liabilities	Liability generally ring-fenced in the subsidiary
Name	Must use the parent’s name	Can adopt its own new name
Governing provisions	Sections 561–563 (foreign company regime)	General incorporation regime under the Act
Registration cost	Tiered to parent capital, up to RM70,000	Standard incorporation fee (much lower)
Permitted activities	Must mirror the parent’s business	Can be defined afresh for the local market
Local representative	Malaysia-resident agent	Typically at least one Malaysia-resident director plus a company secretary (verify against the Act)

In practice, many foreign investors choose the Sdn Bhd: it caps the parent’s downside, usually costs less to set up, and reads to local customers, banks and regulators as a resident company. A branch tends to suit situations where the parent specifically wants the Malaysian operation to sit inside the same legal entity — for example to present a single global balance sheet or to satisfy a counterpart that insists on dealing with the parent itself.

What’s next

• Confirm whether your planned activity actually amounts to “carrying on business” in Malaysia — if it is genuinely occasional or purely cross-border, you may not need to register at all.
• Decide branch vs Sdn Bhd early, because it drives cost, liability and tax before any paperwork starts; take licensed tax and legal advice on your specific facts.
• Line up a willing, capable Malaysia-resident agent (for a branch) or resident director plus company secretary (for a subsidiary) before filing.
• Prepare and certify the parent’s incorporation and constitutional documents, and run the SSM name search, so the section 562 application is ready to lodge in one pass.
• Diarise the recurring obligations — the annual return and financial statements — from day one, so the branch stays in good standing with SSM.

This is an AI-assisted draft for general information, not legal or tax advice. Verify current fees, forms and section requirements directly with SSM or a licensed adviser before acting.