Operating A Foreign Company In Malaysia?

I am not a Malaysian and I would like operate my company (which is not incorporated in Malaysia) in Malaysia. Can I use my existing company to operate my business?

Foreign Company Definition

Firstly we need to understand whether you are considered as a foreign company.

A foreign company as defined in the Malaysian Companies Act 2016 means-

(a) a company, corporation, society, association or other body incorporated outside Malaysia; or

(b) 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 place of business in Malaysia;

So I am a foreign company. Do I have any restriction to conduct my business in Malaysia?

If you fulfil the definition of a foreign company under the act then Section 561(1) applies to you.

Under Section 561(1) of the Companies Act 2016(the Act), a foreign company shall not carry on a business in Malaysia unless the foreign company is registered company under the Act.

That is the general rule.

I do not want to register my foreign company. What is the exception to foreign company registration operating in Malaysia?

Your company shall not be considered as carrying on a business in Malaysia if it only carries the activities the Thirteenth Schedule of the Act within Malaysia. The Thirteenth Schedule consists of the following activities;

(a) is or becomes a party to any action or suit or any administrative or arbitration proceeding or effects settlement of an action, suit or proceeding or of any claim or dispute;

(b) holds meetings of its directors or shareholders or carries on other activities concerning its internal affairs;

(c) maintains any bank account;

(d) effects any sale through an independent contractor;

(e) solicits or procures any order which becomes a binding contract only if the order is accepted outside Malaysia;

(f) creates evidence of any debt, or creates a charge on movable or immovable property;(g) secures or collects any of its debts or enforces its rights in regard to any securities relating to those debts;

(h) conducts an isolated transaction that is completed within a period of thirty one days, but not being one of a number of similar transactions repeated from time to time;

(i) invests any of its funds or holds any property; or

(j) imports goods temporarily under the Customs Act 1967 [Act 235] for the purpose of display, exhibition, demonstration or as trade samples with a view to subsequent re-exportation within a period of three months or within such further period as the Director General of Customs and Excise may in his discretion allow.

If you need further advice on registering your foreign company, contact us.

Related guides

• Setting Up Your Business in Malaysia

• Stages of Business Growth

• Starting and operating a business in Malaysia