Setting Up An Operational Headquarters (OHQ) In Malaysia (Part 1)

Malaysia does not at all fare below other Asia Pacific countries in terms of tax and non tax incentives for local or overseas conglomerates to set up an Operational Headquarter (OHQ) whether for the provision of share service function or other types of services.
The thrust of the articles is a two part series to explain:

• the conditions and eligibility of getting this OHQ status which includes some definitions;
• tax incentives and non tax incentives and

For those who are not too sure of what is Approved Operational Headquarter(AOHQ),let start with what really is an Approved Operational HQ:

It is a locally incorporated company

• which carries on a business in Malaysia of providing qualifying services to its offices or related companies outside Malaysia and
• which is approved by the Minister of Finance
  

AOHQ applies to both local and foreign-owned companies in ALL sectors of the economy.

Conditions &Eligibility:

Append below is a table to show a snapshot view of the conditions/eligibility in obtaining the Operational Headquarters(OHQ) status:
The company should be:

What are Qualifying services?
1. Services in respect of:

• general management and administration ;
• business planning ;
• procurement of raw materials,components and finished products for use in the business of its offices outside Malaysia or its related companies outside Malaysia ;
• technical support ;
• marketing control and sales promotion planning ;
• training and personnel management.

2. Provision of treasury and fund management services to its offices outside Malaysia or its related companies outside Malaysia &where such services include the provision of credit facilities,the funds for providing such facilities can be obtained from outside Malaysia or within Malaysia and where such funds are obtained from within Malaysia the amount shall not exceed ten million rinngit ( RM10 million ) ;and
3. Research and development work carried out in Malaysia on behalf of its offices outside Malaysia or its related companies outside Malaysia

Who are Related Companies ?

A company:-

• the operations of which are or can be controlled either directly or indirectly,by the OHQ company ;or
• which controls or can control,either directly or indirectly,the operations of the OHQ company ;or
• the operations of which are or can be controlled,either directly or indirectly,by a person or persons who control or can control,either directly or indirectly,the operations of the AOHQ company.

• Setting Up An Operational Headquarters (OHQ) In Malaysia(Part 2)
• Statistics On Approved Operational Headquarters In Malaysia For Year 2006
• Statistics On Operational Headquarters In Malaysia – Oil &Gas
• Factors Influencing The Establishment of Operational Headquarters In Malaysia
• Operational Headquarter:Diagonal’s Shift from Singapore To KL
• Statistics On Operational Headquarters In Malaysia
• Malaysia Moving Forward – Abolishment of Real Property Gains Tax &Special Incentive Area –Iskandar Development Region