Labuan Commodity Trading Company with GIFT Incentives 

Labuan Tax- Commodities Trading- GIFT Incentives

A registered Labuan Commodity Trading Company (LITC) is ideal for physical and related derivative trades of commodities around the world. LITC may enjoy a set of incentives through the Global Incentives for Trading (GIFT) program offered by the Labuan jurisdiction to maximise profits and more importantly, be able to create operational substance within Malaysia itself.

The GIFT program is mooted to aim at positioning Malaysia as a regional trading and storage hub for oil and gas to attract international individual traders and trading houses. Not only does the GIFT program allows trade of oil and gas, it allows trade with several different commodities.

Labuan Commodity Trading Company – Specified Commodities under GIFT Program

The GIFT program facilitates the trading of physical and related derivative instruments of:

  • Petroleum and petroleum-related commodities
  • Liquified natural gas (LNG)
  • Coal
  • Agriculture products
  • Metals
  • Refined raw materials
  • Base minerals and chemicals

Labuan Commodity Trading Company – Advantages of GIFT

One key advantage is that the operational office(s) can be set-up anywhere in Malaysia while enjoying the Labuan tax regime. To apply for GIFT incentives, please click here for complete information.

Using the Labuan registered commodity trading company, all dealings will be in foreign currencies of choice except in Malaysia Ringgit. This is ideal for international traders around the world! A special incentive applies for those that trade specifically in petroleum and its related products whereby dealings may be done with Malaysian residents using foreign currency.

Typically, there are minimum eligibility and compliance criteria to meet in order to establish and run a Labuan commodity trading company such as:

* Min. USD 100 million turnover
* Employment of three (3) professional commodity traders with min. salary of RM15,000
* Annual spending business expenses of RM 3 million

As a special advantage and incentive, the LITC is exempted from complying with the above criteria for the first five (5) years from the date of license issued by the Labuan Authority.

There are not many Asian jurisdictions that offer such attractive incentives for commodity traders. To know more about the differences between the Labuan GIFT program versus the Singapore GTP program, please click here.

Key Tax Profile of Labuan Commodity Trading Company:

* For International revenue, corporate tax will be 3% of net profit with audit report
* For local Malaysian revenue, corporate tax will be 24% with audit report
*  Allowed to settle and trade payments in any currency except Malaysia Ringgit
* Permitted dealing with residents for trade of petroleum, petroleum-related and coal products

* No withholding tax on interest, dividends, royalty received by residents or non-residents
* No sales tax, GST, service tax for international dealings
* For Malaysian dealings, 6% GST is applicable for annual revenue more than RM500,000
* 100% exemption of personal income tax on Directors’ fee for foreign individual or corporate director
* 50% rebate on personal income tax on professional expatriate employment
* No stamp duty in connection with all instruments for Labuan business activities, including share transfer
* Operational office can be established anywhere in Malaysia

Type of ComplianceReporting PartyDue Dates
Annual ReturnLabuan FSA1 month before anniversary of incorpn. date
Annual Labuan FeeLabuan FSAOn and before anniversary of incorpn. date
Corporate Tax Inland RevenueBy 31st March, extendable to 31st May
Employer Return - Form EInland RevenueBy 31st March
Audit ReportLabuan FSAWithin 6 months from financial account
Annual Update Statistical FormLabuan FSAby 15th Feb
LITC License FeeLabuan FSA-Fee RM40,000By 15th Jan

Feel free to contact us by filling the enquiry form to explore if your business avail for GIFT incentives. We “simplify the complexities” of your Labuan investment.

Enquire with us how to get started Labuan Commodity Trading Company with GIFT Incentives!

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Type of Commodities Intend to Trade:

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Do you require 2 years Work Visa for your Directors/Expatriates?

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