Labuan companies can carry out either trading or non-trading activities in, from, or through Labuan IBFC.
Benefits of a Labuan Company
- Enjoy special tax regime – 3%/ RM20,000 / 0% based on business activities
- Residents and non-residents of Malaysia are permitted to establish Labuan companies
- Labuan Companies accepted as a listing vehicle on: National Stock Exchange of Australia, Hong Kong Stock Exchange and Singapore Stock Exchange
- Withholding tax exemption on dividends, interest, royalties, service fees, lease payments. Stamp duty exempted
- 50% tax exemption on gross employment income of non-Malaysian professional, managerial staff
- 100% exemption on director fee paid to non-Malaysian director Characteristic of a Labuan Company
- At least 1 director; license entities must have at least 2 directors
- It must have a resident secretary
- There is no minimum capital and no authorised share capital requirements
- The shares issued shall have no par or nominal value
- Treasury shares are allowed
- It may issue shares of different classes and of different rights, but no bearer shares are allowed
- Amalgamation by merging two or more companies into one is allowed
- It is a requirement to have a registered office in Labuan which is the office of the resident secretary
- Business transactions of Labuan companies must be made in currencies other than the Malaysian Ringgit, except for the purpose of defraying administrative and statutory expenses as well as receiving fees and commissions
- No person may divulge to others any information concerning the shareholding, management and any business, financial or other transactions of a Labuan company.
The application for incorporation of a company must be submitted through a Labuan Trust Company and accompanied by the following documents:
i. Memorandum and Articles of Association of the proposed company
ii. statutory declaration of compliance by the trust company
iii. consent to act as a director(s)
iv. individual forms filled up by each director
1. Every Labuan Entity shall submit its tax return within 3 month in each of year of assessment, with an exception approval from Inland Revenue Board, Labuan, then such submission could be submitted later than prescribed date
2. Audit requirements is optional, but required for Labuan companies opting to pay 3% tax per annum on audited net profits and licensed companies such as banks, insurance entities and trust companies
1. The principal office of a Labuan trust company is deemed as the registered office of a Labuan company.
2. A resident secretary (Labuan Trust Company) must be appointed
3. All Labuan companies (including branches and subsidiaries) shall maintain all accounting records for a period not less than six years from the date an account transaction has been completed.