What is the main source of law authorising this entity form?

The CA 2016 and the Companies Regulations 2017.

Give a brief summary of the entity form:

Does the entity possess separate legal personality?

No, the Branch Office does not possess a separate legal personality from its foreign parent company, and the foreign parent company is fully liable for the debts and obligations of the Branch Office.

(Maximum) period of existence

There is no maximum period of existence. A Branch Office has perpetual succession and continues in existence until it is removed from the register.

Governing document(s)

The governing document of the Branch Office would be the applicable governing document of the foreign parent company – i.e. the foreign parent company’s constitution, if applicable.

Liability of incorporators / shareholders

As the Branch Office does not possess a separate legal personality from its foreign parent company, the foreign parent company is fully liable for the debts and obligations of the Branch Office.

(Governing) bodies

The Companies Commission of Malaysia (“SSM”), a statutory body formed under the Companies Commission of Malaysia Act 2001, is the main governing body which regulates matters relating to companies registered under the CA 2016.

Other particularities

A Branch Office is required to operate under the same name as its foreign parent company and may only engage in business activities that fall within the scope of its foreign parent company’s business.

The Branch Office must appoint an agent in Malaysia, who shall be answerable for the conduct of the Branch Office and shall be personally liable for all penalties imposed on the Branch Office, unless the agent satisfies the court that the agent should not be held liable.

Subject to and in accordance with any written law, a Branch Office shall have the power to hold any immovable property in Malaysia.

Can this type of entity be involved in international transactions and restructurings (e.g. cross border mergers, asset acquisitions and divestitures, equity acquisitions, conversions etc.)?

As the Branch Office does not have as separate legal personality from its foreign parent company, any international transactions and restructurings would have to be undertaken by the foreign parent company.

Can this type of entity be publicly listed or held, or its securities be issued to members of the public?

No, a Branch Office cannot be publicly listed or held, nor can it issue its securities to members of the public.

Can this type of entity be used for a non-profit or charitable organization?

No. Generally, for non-profit or charitable organisation, the form of entity to be incorporated is a company limited by guarantee (“CLBG”), and not a Branch Office. A CLBG is prohibited from having a share capital. A CLBG is also required to have a constitution.

A CLBG may only hold any land or property if it is issued with a licence by the Ministry of Domestic Trade and Consumer Affairs.

Give a brief summary of the process of incorporation, formation, or organization, including:

Main documents required

The applicant shall submit the following information and documents to SSM within 30 days from the approval date of the company name:

• The particulars of the shareholders and directors in Malaysia.
• The particulars of the shareholders at its place of origin.
• In the case of a foreign parent company with share capital, the details of class and number of shares at its place of origin, and in the case foreign parent company limited without share capital, the amount up to which the shareholder undertakes to contribute to the assets of the foreign parent company at its place of origin in the event of it being wound up.
• The particulars of the agent (who shall be a resident in Malaysia) to be appointed under a memorandum of appointment or power of attorney, accompanied with a statement by the agent confirming his consent for the appointment.
• The following documents, or its equivalent, of the foreign parent company:
• A certified true copy of the certificate of incorporation or registration.
• A certified true copy of the constitution.
• A copy of the latest audited annual financial statement.
• Other information that the registrar of SSM (“Registrar”) may require.

Involvement of notary, company register, governmental authorities

All of the documents to be submitted must be in Bahasa Malaysia or English. If they are in other languages, official translations must be provided.

Timing (estimate)

The registration fees for the registration of a Branch Office are determined based on the share capital of the foreign company, which shall first be converted to Ringgit Malaysia at the prevailing exchange rate, and ranges between RM5,000.00 to RM70,000.00. In the event the foreign company does not prescribe any share capital, a flat rate of RM70,000.00 shall be payable to SSM.

Main costs, including registration and similar fees (excluding legal fees)

The notice of registration of the Branch Office will be issued within 1 to 3 working days from full compliance of the registration procedures by the applicant, provided that there are no further queries by SSM. The certificate of registration will be issued by SSM upon request.

Is a description of the anticipated business or purpose of the entity required for incorporation, formation or organization?

Minimum number of incorporators / shareholders and residency requirements

The CA 2016 does not prescribe a minimum number or residency requirements of shareholders, as the Branch Office is considered an extension of the foreign parent company.

Minimum number of directors (or other applicable officers) and residency requirements

The CA 2016 does not prescribe a minimum number or residency requirements of directors, as the Branch Office is considered an extension of the foreign parent company. However, the Branch Office must appoint an agent who resides in Malaysia.

Minimum share capital, or equivalent, and payment requirements (including opening a bank account)

The CA 2016 does not prescribe a minimum capital requirement, as the Branch Office is considered an extension of the foreign parent company.

The Branch Office will however need to open a corporate bank account with a bank in Malaysia before the Branch Office commences its business in Malaysia.

Is the physical presence of incorporators/directors/shareholders required in the jurisdiction for incorporation, formation, or organisation?

There is no requirement under the CA 2016 for the directors and shareholders of the Branch Office to be physically present in Malaysia. However, the Branch Office must appoint an agent who resides in Malaysia.

Is a tax identification number, or equivalent, required? If so, how is it obtained?

Yes, a tax identification number is required. The Branch Office must register with the Inland Revenue Board through its online registration portal to obtain an income tax registration number.

What is the title of the applicable company registry?

Companies Commission of Malaysia (Suruhanjaya Syarikat Malaysia) (“SSM”). SSM is a statutory body formed under the Companies Commission of Malaysia Act 2001 and is an agency under the Ministry of Domestic Trade and Cost of Living.

What types of information must be filed at the (company) register, and which of them will it be publicly available, e.g.: Articles or other formation document, Articles or other formation document, Group structure, Share capital, Directors, Accounts, Insolvency, good-standing, liquidation, Liens and encumbrances on the shares, Liens and encumbrances on assets of the entity, Other (e.g. litigation, tax matters)

The Branch Office must maintain the following statutory records / registers at its registered office in Malaysia and file any changes to such records / registers with SSM:

• Accounting records relating to operations in Malaysia.
• Audited financial statements of the Branch Office as well as its foreign parent company.
• Annual Return
• Branch Register (if applicable)
• Beneficial ownership register.
• Notifications of corporate changes, including those related to directors, local agents, share capital, shareholding or constitution.
• Display of registered name and company number, at the registered office and on official documents (in romanised characters).

What is the title of the executive body and its members? What are their main duties, tasks and responsibilities?

As the Branch Office is considered an extension of the foreign parent company, the Branch Office would be managed by the representatives of the foreign parent company. However, the Branch Office must appoint an agent who resides in Malaysia (“Agent”).

The Agent shall be answerable for all such acts, matters and things that are required to be done by the Branch Office under the CA 2016 and shall be personally liable to all penalties imposed on the Branch Office for any contravention of the CA 2016, unless the Agent satisfies the court hearing the matter that the Agent should not be liable.

How are the members of the executive body appointed, dismissed and replaced?

The Branch Office shall submit particulars of the Agent (who shall be a resident in Malaysia) to be appointed under a memorandum of appointment or power of attorney, accompanied with a statement by the Agent confirming his consent for the appointment during registration of the Branch Office.

In the event of any changes to the Agent, the Branch Office shall notify the Registrar of such changes within 14 days from the change. The Branch Office or its Agent shall lodge with the Registrar a notice in writing stating that the Agent has ceased or will cease to be the Agent on the date specified in the notice. The Branch Office shall appoint a replacement Agent within 21 days from the date the previous Agent ceases to be an Agent.

The Agent in respect of whom the notice has been lodged shall cease to be an Agent on –

• the expiry of 21 days from the date of lodgement of the notice with the Registrar or on the date of lodgement of the memorandum of appointment of the replacement Agent, whichever is earlier; or
• if the notice states a date on which the Agent is to cease and the date is later than the expiration of the period set out in (a) above, on that later date.

Is it possible to appoint corporate directors or must all directors be natural persons?

In Malaysia, only natural persons who are residents in Malaysia can be appointed as the Agent.

Is there a requirement to have non-executive directors? How are they appointed, dismissed and replaced? Do non-executive directors serve on a separate body (two-tier structure) or can a one-tier board (with executive and non-executives) be appointed, or is some alternate structure used?

There is no requirement for a Branch Office to appoint non-executive directors, as the Branch Office is considered an extension of the foreign parent company.

What is the title of the body of owners / shareholders / members, and what are the main tasks / responsibilities / powers of that body?

As the Branch Office is considered an extension of the foreign parent company, the members / shareholders of the Branch Office shall be the same as the foreign parent company and the responsibilities and powers of the members / shareholders shall depend on the applicable law of the foreign parent company.

What are the majority and quorum requirements for decisions by the shareholders? Can they be varied or changed?

As the Branch Office is considered an extension of the foreign parent company, this would be determined by the applicable law of the foreign parent company.

Any special governance regimes (e.g. depending on size, being listed at a stock exchange, or other criteria)?

The Securities Commission of Malaysia (“SC”) issued the Malaysian Code of Corporate Governance (“MCCG”) which provides a set of corporate governance best practices for public listed companies (“PLC”) in Malaysia.

On 28 April 2021 the SC issued an updated MCCG to strengthen the corporate governance culture of PLC. Some of the notable updates are:

• The Chairman of the Board of Directors should not be a member of the Audit, Nomination or Remuneration Committees. Previously, the restriction was only for the Audit Committee;
• Active politicians are discouraged from being appointed as a director of a PLC; and
• All PLC shall have at least 30% women directors on their board. Previously, only large companies were required to adhere to this requirement.

There are no similar guidelines for a Branch Office.

What are the periodic accounting obligations incumbent upon the entity? To whom must those accounts be submitted?

Filing of annual returns:

Branch Offices are required to lodge with the SSM an annual return for each calendar year, not later than 30 days from the anniversary of its incorporation date.

Filing of financial statements:

Branch Offices shall lodge with the SSM for each financial year the audited financial statements for both the Branch Office and its parent company annually.

Is the entity permitted to determine its own financial year?

Yes, the Branch Office can determine its own financial.

Is the entity subject to any statutory (external) auditor obligations?

The Branch Office is required to appoint an auditor for each financial year.

Requirements to appoint other persons (officers, secretary, internal auditor / accountants). If so, what are their functions? Are there any residency requirements?

The Branch Office is not formally required to appoint a company secretary, but is required to appoint an auditor for each financial year.

What is the title designated for 'ownership interests' (e.g. shares, quota, interests, membership)?

In Malaysia, ‘ownership interest’ is commonly known as interest in voting / equity shares.

A Branch Office which has a share capital and has any member who is a resident in Malaysia shall keep a branch register for the purpose of registering shares of the members resident in Malaysia who apply to have the shares registered at its registered office in Malaysia or at some other place in Malaysia.

Are different classes of ownership interests possible? If so, what are some examples of different classes?

Yes, subject to the constitution of a company, shares in a company may be issued in different classes.

The types of shares include ordinary and preference shares. For purposes of the CA 2016, shares are in the same class if the rights attached to the shares are identical in all aspects.

What documentation is required for the transfer of ownership interests?

In respect of transfer of shares of the branch register of the Branch Office, an instrument of transfer is required.

Are there any additional formal requirements required for the transfer of ownership (notary, approvals, stamping, filings, corporate records)?

In respect of transfer of shares of the branch register of the Branch Office, the instrument of transfer must be duly executed by the transferee and transferor and be submitted for adjudication at the stamp office for the assessment of stamp duty payable.

Are there any applicable stamp duties imposed when transferring ownership interests?

Yes, the instrument of transfer on any sale of shares will be subject to stamp duty at the rate of 0.3% (RM 3 for every RM1,000 or fractional part of RM1,000) of the consideration or value of the shares, whichever is greater.

How are shares issued? (including information on payment obligations, registration requirements)

As the Branch Office is considered an extension of the foreign parent company, this would be determined by the applicable law of the foreign parent company.

Further information on equity contributions, e.g., non-cash payments on shares, (share premium) contributions without issuances of shares, can partially paid shares/ownership interests be permitted and what are the restrictions on them?

As the Branch Office is considered an extension of the foreign parent company, this would be determined by the applicable law of the foreign parent company.

As the Branch Office is considered an extension of the foreign parent company, this would be determined by the applicable law of the foreign parent company.

As the Branch Office is considered an extension of the foreign parent company, this would be determined by the applicable law of the foreign parent company.

Any requirements with respect to share cancellation, share repurchase and other capital reductions

As the Branch Office is considered an extension of the foreign parent company, this would be determined by the applicable law of the foreign parent company.

Any requirements with respect to distributions to shareholders?

As the Branch Office is considered an extension of the foreign parent company, this would be determined by the applicable law of the foreign parent company.

Can the owners or shareholders adopt a restrictive or governing agreement among themselves such as a Shareholders Agreement?

As the Branch Office is considered an extension of the foreign parent company, this would be determined by the applicable law of the foreign parent company.

Which are the typical annual maintenance costs of maintaining the existence and legal good standing of such an entity (excluding legal fees)?

A Branch Office must maintain a registered office in Malaysia where all documents and statutory records are stored and kept as required under the CA 2016. The Branch Office must notify SSM any changes to the registered address.

The Branch Office must also lodge its annual returns and financial statements and reports with SSM online, in accordance with the timelines as set out in the CA 2016. The lodgement fees for the aforementioned documents for a Branch Office are currently as follows:

• Audited financial statements and reports: RM200
• Annual return: RM500.

In addition to the lodgement fees, other annual maintenance costs that the company must bear will include the auditor’s fees, which will vary depending on the charges of the service providers.

What are the general corporate tax rates? (Specify if there is a national versus local distinction).

For 2025, the standard corporate tax rate for a Branch Office is 24% on income derived from their operations in Malaysia. Branch Offices may also enjoy tax benefits under a double taxation agreement between Malaysia and their foreign parent company’s home jurisdiction, where applicable.

Summary of any specific matters, e.g. recent or prospective major legal developments

Beneficial Ownership Reporting Framework

Pursuant to the Companies Commission of Malaysia Act 2001, SSM has issued the BO Guidelines applicable to all entities registered with SSM requiring entities to identify the beneficial owners of a legal entity, keeping the beneficial ownership information accurate and up-to -date and to notify the SSM of the beneficial ownership information and any change thereof in accordance with manner to be prescribed by SSM.

The Companies (Amendment) Act 2024 (“Amendment Act”), which came into force on 1 April 2024 (with the exception of 4 sections) reinforced the beneficial ownership reporting framework, by specifying requirements for entities, amongst others, to –

• keep a register of the beneficial owners of the entity (“BO Register”) at its registered office,
• lodge a notice on any change to the particulars in the BO Register to the Registrar within 14 days of such change;
• retain the information of the person recorded in the BO Register but who subsequently ceases to be a beneficial owner for 7 years; and
• to require members or any person that the entity reasonably believes to be a beneficial owner to confirm their beneficial ownership status and disclose the actual beneficial owner if applicable.