Operational Headquarters (OHQ)

Incentive to encourage the set-up of OHQ in Malaysia by multinational corporations to provide qualifying services to its offices or related companies outside Malaysia

Qualifying Services
1) General management and administration
2) Business planning and coordination
3) Procurement of raw material, components and finished products
4) Technical support and maintenance
5) Marketing control and sales promotion planning
6) Data/information management and processing
7) Research and development work
8) Training and personnel management
9) Treasury and fund management services
10) Corporate financial advisory services

Related Company
- directly or indirectly, control or be controlled by the approved OHQ

Conditions:-
1) Locally incorporated company under the Companies Act, 1965
2) Minimum paid-up capital of RM500,000
3) Total business spending at least RM1,500,000 per annum
4) Appoint at least 3 senior professional/management personnel
5) Serve at least 3 related companies outside Malaysia
6) Carry out at least 3 qualifying services
7) Have sizeable network of companies outside Malaysia
8) Have well established network of companies with significant and substantial

A company granted OHQ status and incentives under Section 127 of the Income Tax Act 1967, is allowed 100% foreign equity ownership.

-10 year tax holiday - 100% tax exemption on statutory income
-employment of qualified professionals and technical and supporting personnel
serve only related companies - at least 3 related companies outside Malaysia
-income from services provided to related companies in Malaysia < 20% of total income is exempt

Income Tax (Exemption)(No 40) Order 2005 - Tax treatment of an OHQ issued on 15/07/2005 - w.e.f 2003

Malaysia Master Tax Guide 2009 – Pg 13-440