Labuan Company allows you to carry out on trading and non-trading activities

Labuan Company Characteristics * Labuan Trading activity comprises of Labuan banking, insurance, private mutual funds, commodity trading (GIFT), leasing, money broking, factoring, fund management, private trust company, trust company, shipping, etc.

* Non-Trading Labuan activity refers to holding companies for investments in securities, stocks, shares, loans, deposits or any properties.

* Where the Labuan company performs both trading and non-trading activities, the nature of business will be regarded as Trading Activity.

Below is the fact sheet of Labuan Company characteristics:

Labuan CompanyDescription
Governing ActLabuan Company Act 2010
Two Types of Labuan CompanyLimited by Shares or Limited by Guarantee (**)
Treasure SharesAllowed up to 15% of the total ordinary shares
SharesMay issue shares of different classes and of different rights
No bearer shares allowed
DirectorMinimum one, can be Malaysian or Foreigner
Individual or Corporate
No of Director's Meeting- As per Articles of Associations
Local Director- optional. Nominee Director allowed
ShareholderMinimum one, can be Malaysian or Foreigner
Individual or Corporate
Local Shareholder- optional. Nominee Shareholder allowed
Resident SecretaryMinimum one of Trust Officer- individual/corporate by Trust Company
Registered AddressPrincipal office of Trust Company
Publicly Accessible RecordsNot available unless permission from shareholders/directors
Authorised CapitalNot available
PAR Value CapitalNo Par Value
Location of Board MeetingAnywhere, but for commercial substance, it is highly recommended to hold meeting in Labuan/Malaysia esp. key decisions
Governing ConstitutionsMemorandum of Articles, Articles & Associations
Business TransactionsIn any foreign currency except Malaysia Ringgit
Expatriate Tax Waiver50% tax rebate for expatriates under work permit issued by the Company
Double Tax Treaties more than 70 countriesEligible. For more access, can elect for permanent to be taxed under Income Tax Act 1965
DividendsNo personal tax on shareholders
Directors' FeeNo personal tax for foreign directors (up to YA 2020)
Dealing with Malaysians Individual/CorporationsPermissible with reporting to LFSA. Corporate Tax will be 24%
Covert to Labuan Limited PartnershipYes, subject to LFSA requirements
Corporate TaxTrading Activity: 3%/pay RM20,000 flat fee
Non-Trading: 0%
3% tax rate option has to appoint qualified auditor to certify the accounts
Annual Tax Return- to be filed to Inland Revenue Board by 31st March, extendable to 31st May
Yearly Audit Reporting/Managment AccountAudit report required for Trading Activity with 3% tax on net profit.
Annual ComplianceAnnual Return- no later than 30days from the anniversary date of incorporation
AmalgamationAllowed merging two or more companies into one
AccountsTo be kept in Labuan
Annual Fee PayableAnnual LFSA fee -payable on and before the anniversary date of incorporation
2 years' Work PermitEntitled to apply for work permit for directors/managerial positions with min. salary of RM10,000
Work permit holders can apply to include his/her dependents (wife/children-under aged 21.)Parents will be yearly visa
Withholding TaxNot applicable
Stamp Duty Exempted on all instruments including transfer of shares relating to offshore business activities
Inheritance TaxNot applicable
GSTNot applicable on dealing with other Labuan entities or international companies
Dealing with Malaysians/Local Corporation, revenue exceeded RM500,000 need to subject to 6% GST

List of activities a Labuan Company requires the approval of license to operate:

Type of Licensed Labuan Trading ActivityGoverning Act for LicensingAnnual Fee License Payable to Labuan FSAManagement Office in Labuan Permission for Onshore Office within MalaysiaPermission for Setting Office Outside Malaysia
Banking Labuan Financial Services and Securities Act 2010RM 100,000Yes Yes, any part of Malaysia with annual fee - RM10,000Yes
Insurance Labuan Financial Services and Securities Act 2010Insurance Core Business- RM50,000 or Labuan Services - RM20,000Yes Yes, any part of Malaysia with annual fee- RM10,000Yes
Leasing Labuan Financial Services and Securities Act 2010RM60,000 for dealing with Malaysians and RM20,000 for subsequent leasing (one-time off)Yes In Kuala Lumpur or/and Iskandar

Annual Fee- RM7,500

Yes
Commodities- GIFT Labuan Financial Services and Securities Act 2010 (LFSSA)RM 40,000Not required Yes, any part in MalaysiaYes
Money Broking Labuan Financial Services and Securities Act 2010RM 5,000YesIn Kuala Lumpur or/and Iskandar

Annual Fee- RM7,500
Yes
Fund Management Labuan Financial Services and Securities Act 2010RM 5,000- operate in Labuan, RM10,000 operate outside LabuanYesIn Kuala Lumpur or/and Iskandar

Annual Fee- RM7,500
Yes
SecuritiesLabuan Financial Services and Securities Act 2010RM 5,000YesIn Kuala Lumpur or/and Iskandar

Annual Fee- RM7,500
Yes
Factoring Labuan Financial Services and Securities Act 2010RM 40,000 YesIn Kuala Lumpur or/and Iskandar

Annual Fee- RM7,500
Yes
Trust Company Labuan Financial Services and Securities Act 2010 (LFSSA)RM 15,000 YesIn Kuala Lumpur or/and Iskandar

Annual Fee- RM7,500
Yes
Shipping Merchant Shipping Ordinance 1952-N/A- YesIn Kuala Lumpur or/and Iskandar

Annual Fee- RM7,500
Yes
Labuan Holding CompanyLabuan Company Act 1990-N/A- YesIn Kuala Lumpur with annual fee of RM10,000 and must elect to be taxed under Income Tax Act 1967Yes
Labuan Trading CompanyLabuan Company Act 1990-N/A- YesIn Kuala Lumpur or/and Iskandar

Annual Fee- RM7,500
Yes

Should you decide to proceed, feel free to send enquiry to provide you the right advise on the suitable entity to achieve your goals. We “simplify the complexities” of your Labuan investment!

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Do You Need Internet Banking Set Up?
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Do You Require 2 Years Work Permit for Your Working Directors?
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