Labuan Company

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A Labuan Company may have these shares structures:

  • Company limited by shares
  • Company limited by guarantee
  • an unlimited company

Types of company

  • Labuan company
  • Labuan Foreign company
  • Labuan cell protected company

Why use Labuan Company?

Companies incorporated in Labuan IBFC may enjoy:

  • Access Malaysia’s double tax agreements with 80 countries
  • Competitive tax regime
  • Labuan Business activities as defined in the Labuan business activity tax 1990 (LBATA 1990) which provides : – Taxation 3% of net audit profits, if the company is undertaking trading activities.
  • Company carrying non-trading activities is not charged tax. ie 0%.
  • Resources – Access to English and Chinese speaking talent.
  • Competitive operating costs.
  • No import duties, sales tax or capital gain tax.
  • No foreign exchange controls.
  • 50% tax exemptions or personal income for non-Malaysian residents holding managerial positions and above in a Labuan company.
  • 100% exemption on personal tax income for director’s fee received by non-Malaysian directors.
  • Labuan companies (including companies licensed under the law relating to financial services in Labuan IBFC) may set up a marketing office in Kuala Lumpur and/or Iskandar Malaysia.
  • A convenient location within the Asia Pacific region.

What are the requirements to set up a Labuan Company?

  • Share capital in any currencies except Ringgit Malaysia
  • Minimum of one share with no minimum share per value Number of Director
  • A Labuan company must have at least one director who can act as resident director
  • A Labuan company must have at least one secretary which shall be a Labuan Trust Company carrying out both Labuan trading and non-trading activities.
  • Registered office – Must have a registered office which shall be the principal office of a Labuan Trust Company.

Accounting requirements

  • Labuan companies are required to submit audited accounts as part of tax filing requirements.
  • Under the LCA 1990, there are no publicly accessible records.

Benefits of setting up an offshore company in Labuan:

  • Asset protection
  • Tax savings
  • Perpetual Tax exemptions
  • Labuan entities may access benefits under the Malaysia Double Taxation Agreement (DTAs).
  • Labuan entities can invest in domestic companies while enjoying the tax exemptions accorded in Labuan IBC.
  • Ease of succession/transfer of ownership.
  • Enhances confidentiality
  • A Labuan trading company has the ability to maintain local office, employ local staff and access to local support services as a relatively low cost.

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