Malaysia Pioneer Status for Representative and Regional Offices

Malaysian Pioneer Status-Representative/Regional Offices

Under the Promotion of Investments Act 1986, pioneer status can be accorded to industries including:-

By definition, a Representative Office/Regional Office of a foreign company/ organisation in the manufacturing and services sector is an office which is established in Malaysia to perform permissible activities for its head office/principal. The Representative Office/ Regional Office does not undertake any commercial activities and only represents its head office/principal to undertake designated functions. The Representative Office's/ Regional Office's operation is completely funded from sources outside Malaysia. The Representative Office/ Regional Office is not required to be incorporated under the Companies Act 1965. The setting up of a Representative/Regional Office requires the approval by the Government of Malaysia.

Additionally, a Representative Office is an office of a foreign company/ organisation approved to collect relevant information on investment opportunities in the country especially in the manufacturing and services sector, enhance bilateral trade relations, promote the export of Malaysian goods and services and carry out research and development (R&D).

Additionally, a Regional Office A Regional Office is an office of a foreign company/organisation that serves as the coordination centre for the company's/ organisation's affiliates, subsidiaries and agents in South-East Asia and the Asia Pacific. The Regional Office established is responsible for the designated activities of the company/ organisation within the region it operates

Approved Activities includes:-
* Gathering and analysis of important information or undertaking feasibility studies on investment and business opportunities in Malaysia and the region;
* Planning of business activities;
* Identifying sources of raw materials, components or other industrial products;
* Undertake research and product development;
* Act as a coordination centre for the corporation's affiliates, subsidiaries and agents in the region
* Other activities which will not result directly in actual commercial transactions

Non approved activities includes:-
* Be engaged in any trading (including import and export), business or any form of commercial activity
* Lease warehousing facilities; any shipment/transhipment or storage of goods must be carried out through a local agent or distributor
* Sign business contracts on behalf of the foreign corporation or provide services for a fee
* Participate in the daily management of any of its subsidiaries, affiliates or branches in Malaysia

* The proposed operational expenditure of the RE/RO must be at least RM150,000 per annum.
* The RE/RO should be financed by funds emanating from sources outside Malaysia.
* Other criterias may apply like expartriate employments.