I AM bewildered by the Government's law on foreign company operating in Malaysia. I was wondering if I bring this issue to the media, would it help open their eyes? So far, since I made my oficial complaint, SSM and Industrial Relation Department came back with a 'nothing can be done' answer to me. I am still waiting for EPF and Perkeso to give me their findings.
I did submitted my official complaint to SSM regarding my problem as below;
"Please check if a company by the name of 'GMS Asia Pacific Sdn. Bhd.' (registered in April 2009) is directly link with GMS (Asia Pacific) Limited which is registered in Hong Kong? I have doubts due to 2 of the Directors in GMS Asia Pacific Sdn. Bhd. are actually existing employees for GMS (Asia Pacific) Limited, i.e. Sham Kumar (Area Director) and Arveena Kaur Rekhraj (Programme Manager). If these 2 companies are directly related, then my next question is why am I hired using international company when there is a Malaysian company. If they are not related, then is it legally alright for GMS (Asia Pacific) Limited to operate businesses in Malaysia without having to register in Malaysia? and is the company (GMS Asia Pacific Limited) still liable to pay my EPF, Socso and tax even if it is not registered in Malaysia.".
I am not satisfied with SSM reply because GMS (Asia Pacific) Limited do carry on business in Malaysia. In fact they have been operating in Malaysia for almost 10 years if I'm not mistaken. In Kota Kinabalu itself, GMS has been operating since late 2007.
GMS (Asia Pacific) Limited is the sole marketing company that is contracted by Starwood Corporation Asia Pacific to run the loyalty membership for its hotels in Asia Pacific. The registered HQ for GMS is in Hong Kong, but the owners are based in Taiwan and Singapore. Main branches are in Thailand, Singapore and China.
Owners are Geoff Spiller (base in Singapore) and Simon Lowater (base in Taiwan). GMS have more than 100 membership offices run by the Managers that they hired in Asia Pacific.
In Malaysia, GMS have 3 membership offices running business now, Sheraton Imperial Kuala Lumpur, Avillion Group of Hotels and Le Meridien Kota Kinabalu. The person in-charged for Malaysia is Mr. Sham Kumar who is based in Sheraton Imperial Kuala Lumpur, and report to the Vice President, Ms. Karen Phillips, based in Bangkok, Thailand. You can view the website at www.gms-group.com.
I have attached herewith the contract for 2011 between GMS (Asia Pacific) Limited and Le Meridien Kota Kinabalu. However, this contract is the copy sent via me as the Programme Manager to deliver to the hotel for signatures. The signed copy has been sent to Thailand office and the hotel have a copy of the contract.
I do have other proof to show that GMS (Asia Pacific) Limited is operating in Malaysia, if you need more. But the best way to see proven proof of the operation, your part should pay a visit to the office at Starwood Privilege, 10th Floor, Le Meridien Kota Kinabalu Hotel, Jalan Tun Fuad Stephens, Sinsuran, Kota Kinabalu, Sabah or the Sheraton Imperial Kuala Lumpur Hotel at Jalan Sultan Ismail.
I have also attached the list of offices run by GMS (Asia Pacific) Limited in Asia Pacific, and you can see that Malaysia is listed too. This is the master contact list produced late last year and you will see that I am one of the Programme Manager based in Kota Kinabalu.
But Md. Rafiza Ab. Derani from SSM reply with this statement;
Please be informed that based on our record, GMS Asia Pacific Sdn. Bhd. have only 2 individual shareholders. Please note that under the Malaysian law, corporate information in our database can be obtained upon payment of the prescribed fee. You may obtain such information from our e-info services (please log on to our website www.ssm.com.my) or at nearest SSM's office.
There is no guarantee however that the search would be able to confirm whether GMS (Asia Pacific) Limited is linked to GMS Asia Pacific Sdn. Bhd. You may also wish to carry out the corporate information search at the corporate register of the country of origin of GMS (Asia Pacific) Limited.
From the information given also, we are of the view that GMS (Asia Pacific) Limited is not carrying on business in Malaysia. Thus, to help us to determine whether GMS (Asia Pacific) Limited is operating business in Malaysia as you claimed, please elaborate and if possible furnish us any supporting document.
However, it is possible that the business in Malaysia is being managed by GMS Asia Pacific Sdn Bhd. Of course, if that is the case, we are equally as bewildered as you are as to why you are employment contract is with the foreign company if you are practically working with the local company.
Unfortunately, the issue of you being employed by GMS (Asia Pacific) Limited (a foreign company) and the issue of payment to EPF, SOCSO and LHDN are not in the purview of SSM.
I do have a question. How do SSM define "the company is operating business in Malaysia"? Does that mean earning profit, hiring local Malaysians in Malaysia and paying employees salaries in Malaysia? If yes, then does that means that the international company must register with SSM to operate legally in Malaysia?
So, with the elaboration above, what is your opinion of my complaint? Do I have a case to proceed?
Md. Rafiza Ab. Derani from SSM reply my complaint with this statement;
"According to the section 330(1) of the Companies Act 1965, the word 'carrying on business' is defined as establishing or using a share transfer or share registration office or administering, managing or otherwise dealing with property situated in Malaysia as an agent, legal personal representative, or trustee, whether by servants or agents or otherwise, and 'to carry on business' has a corresponding meaning.
However, a foreign company shall not be regarded as 'carrying on business' within Malaysia for the reason only that within Malaysia it -
(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 only temporarily pursuant to 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.
Having perused the complaint and supporting documents given, we are of the view that GMS (Asia Pacific) Limited is not carrying on business in Malaysia. Thus, we believe that GMS (Asia Pacific) Limited need not to register their company as a foreign company pursuant to Companies Act 1965.
Fauziah Anim bt. Izharuddin from SSM also told me that SSM does not play role of an ombudsman and does not conduct arbitration. In the event of financial losses for instance, the aggrieved parties need to file their own claims through the appropriate legal process in Court.
If there is any misuse of the personal identity or fraud that cause the information in the register to be false and misleading, the aggrieved parties will also need to initiate civil action to obtain court order to rectify the register.
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