Independent AR or Dealer as AR: Choosing a Malaysian Model

1. Key takeaways

Two structures dominate the Malaysian market, and the difference between them is not administrative but commercial. Under the independent AR model, the registration certificate is held by a professional authorised representative and the dealer only distributes under an AR authorisation. Under the dealer-as-AR model, the certificate is held by the dealer, which means the manufacturer’s dependence on that channel is written into the registration itself.

• The independent model decouples the certificate from the channel. Replacing a dealer leaves the certificate untouched; the authorisation is simply reissued to the new partner.
• The dealer model couples them. Changing channel means changing the AR, which in practice means transferring or repeating the registration.
• Industry practice favours independence. The recommendation rests on continuity of market access rather than on cost alone.
• The dealer model has real advantages. A shorter chain, strong early cooperation and, in some cases, a dealer willing to carry the registration cost.
• Multiple ARs are permitted. The MDA allows more than one AR for the same device, which makes a main independent AR with supporting dealer ARs a workable structure.
• Switching later is possible but expensive. Registration transfer or re-registration plus EL adjustments takes months, so the decision belongs before signature, not after.

2. Legal basis

The legal starting point is that the registration certificate is held by an establishment, and the establishment that holds it is the AR. Because the certificate attaches to that entity, the choice of structure determines who controls the registration. In the independent model, the professional AR is the holder and the dealer operates under authorisation granted by the AR. In the dealer-as-AR model, the dealer is itself the AR, holds the EL and the certificate, and supplies the market in that dual capacity.

MDA licensing guidance contemplates more than one AR for a given device. Each appointed AR may register and sell the same device, provided each independently complies with Act 737 and its subsidiary legislation and holds its own manufacturer authorisation. The LoA templates in Annex B of the same guidance set out the authorisation chain for ARs, distributors and importers, and paragraph A.7 addresses arrangements involving multiple ARs. That framework is what makes a layered structure lawful: an independent AR can hold the principal certificate while dealer ARs hold their own registrations for their own channels.

The framework does not prescribe a preference. It permits both models and permits multiple ARs, and the choice is a commercial judgment made within that permission. What the framework does determine is the consequence of the choice: because the certificate follows the holder, the structure selected at the outset defines what must happen if the commercial relationship changes.

3. Expert insights

The argument for an independent AR is usually summarised as flexibility, but the mechanism is more specific than that. A registration certificate is not a tradable asset that can be handed to a new partner at will; it belongs to the establishment that applied for it. When the channel changes under the dealer-as-AR model, the certificate does not follow the brand, it stays with the outgoing dealer. The manufacturer’s options are then to negotiate a transfer, which requires the outgoing party’s cooperation, or to register again through the new partner. Both routes are measured in months, and the first depends on the goodwill of an entity that has just lost the business.

The dealer model nonetheless deserves a fair hearing. Where a single channel is the strategy, and where the dealer is willing to carry the registration cost and the regulatory obligations that go with it, the arrangement is efficient. The chain is short, the dealer is motivated because the certificate is its own, and the manufacturer avoids the cost of an AR relationship. For a short market test, that can be the rational choice. The difficulty arises when a short-term arrangement is allowed to become the permanent structure by default.

The multi-AR permission is often presented as a way to have both. To a degree it is: an independent AR can hold the principal certificate while dealer ARs register for their own channels, which preserves channel flexibility without surrendering control of the main registration. But each AR must independently comply and independently hold authorisation, so the structure multiplies the compliance surface. The layered model works when the manufacturer can monitor several entities; it fails when it is adopted as a way of avoiding a decision.

4. Practical recommendations

• Choose the structure against a multi-year channel plan, not against the convenience of the first order. Ask whether the channel is likely to change within the life of the certificate.
• Where control of the registration matters, place the principal certificate with an independent AR and let dealers operate under authorisation, so that a channel change is an authorisation event rather than a registration event.
• Where a dealer holds the certificate, negotiate the transfer mechanics at the outset, while the relationship is still constructive and the counterparty still has an incentive to agree.
• Put certificate ownership and the exit mechanism into an annex to the distribution agreement: state that the independent AR holds the certificate, set out the conditions on which authorisation terminates, and fix the timetable and cost sharing for transfer after termination.
• If more than one AR is appointed, document which entity registers which device so that parallel registrations do not generate competing claims.
• Treat a later change of model as a project with a regulatory workstream, not as a contract amendment: it involves registration transfer or re-registration and EL adjustments.

5. Verification checklist

• □ Confirm the LoA templates in Annex B of the MDA Licensing for Establishment guidance, covering the AR, distributor and importer authorisation chain.
• □ Confirm paragraph A.7 of the same guidance on arrangements involving multiple ARs.
• □ Confirm that the model comparison reflects industry practice and experience rather than a prescribed regulatory preference.
• □ Confirm the current certificate holder for each device before negotiating any channel change.
• □ Confirm that the EL and GDPMD scope of the chosen AR covers the activities the model requires.

How GRZAN can help. GRZAN provides medical device and IVD registration, quality system, authorised representative and local testing support across Southeast Asia, including Malaysia. Our team prepares dossiers to ASEAN CSDT structure, manages submissions and deficiency responses with the MDA, and supports post-market vigilance obligations. Business enquiries: info@grzanglobal.com