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                         LABUAN TAX FOR BANKING BUSINESS

Labuan Tax for Banking Business

There are many advantages of owing Labuan banks by foreigners and Malaysians alike.  Many new opportunities may spring out in new financial products and acquisition of expertise which would not be possible in the Malaysia domestic banking industry. For foreigners, the opportunity to own a banking license 100% without the requirement of Malaysians partners is a huge plus sign! Labuan bank is allowed to deal and operate in both foreign currencies and Malaysian Ringgit, where permitted by Central Bank of Malaysia to deal with Malaysians. Hence this advantage wider access of markets of both international and domestic. [Read: Requirement to apply Labuan Banking License]

Key Tax Profile of Labuan Commercial Bank and Labuan Investment Bank:

* Corporate tax is 3% on net profit 
No withholding tax on dividends, interest, management fee, royalty and technical fees
Dividends declared from a Labuan Company is exempted from tax for foreigners & Malaysians
* Tax exempt on interests received from foreign currency deposits placed by Malaysians in Labuan Banks
* No import duty, sales tax and service tax for all international dealings
* For Malaysian dealings, 6% GST is applicable for companies with annual revenue exceeded RM500,000 
* 0% personal income tax on Directors’ fee receivable by a foreign individual or corporate director
* 50% tax rebate on personal income of foreign professional employment
* 65% tax rebate on personal income of local Malaysians professionals employment
Malaysians enjoy 50% tax rebate on gross housing and allowances received
* No stamp duty for the execution of all instruments including shares transfer
* No inheritance tax
* Able to access to more than 70 Malaysia’s tax treaty partners
* Tax rebate on zakat payment
* Capital gains arising from the sale of shares in a Labuan company by the shareholders are not taxable
* Permitted to set up Co-Located Office anywhere in Malaysia to deal with Malaysian residents
* Permitted to set up Marketing Office in Kuala Lumpur/Iskandar Johor.

 Snapshot of Compliance of Labuan Banking Business
Type of ComplianceReporting PartyDue Dates
Annual ReturnLabuan FSA1 month before anniversary of incorpn. date
Annual Company FeeLabuan FSA On and before anniversary of incorpn. date
Corporate Tax Inland RevenueBy 31st March, extendable to 31st May
Employer Return - Form EInland RevenueBy 31st March
Employee Return - Form BE/M for expatriates employmentInland RevenueBy 30th April
Audit ReportLabuan FSAWithin 6 months from date of closure financial account
Marketing Office Fee (if any)Labuan FSA-Fee RM7,500 By 15th Jan
Co-Located Office Fee (if any)Labuan FSA-RM10,000By 15th Jan
Banking License FeeLabuan FSA-Fee RM100,000By 15th Jan
Statistical and Info ReportingLabuan FSAfrom time to time

Feel free to email us at contact@labuanbusiness to discover how to apply for a Labuan banking license, we “simplify the complexities” of your investment in the Labuan Jurisdiction! Send us your enquiry to register a Labuan company for your banking business today!




Business Nature with Products/Services to Sell

Type of Labuan Company

Share Capital

List the name and nationality of person, can be legal or natural person

List the name and nationality of all person, can be legal or natural person

Do You Need to Personal Service in Setting Up Bank Account with Cheque Book?

Do You Need Internet Banking Set Up?

Do You Require 2 Years Work Permit for Your Working Directors?

How Many Positions Required Work Permit?

Any special request service and remarks, please specify here!