Labuan Tax for Insurance Entities

Labuan Jusrisdiction is one of the best venue for insurers and reinsurers looking to tap into Asia Pacific markets. It provides a popular risk solutions for corporate using Labuan insurance as underwriting vehicles in the form of captives. The ownership can be 100% foreign owned with permission to deal with Malaysians via a co-located office within Malaysia to serve the Malaysian market.

Labuan Tax for Insurance Entities

Key Tax Profile of Labuan Insurance Entities:

* Corporate tax is 3% on net profit 
* No withholding tax on dividends, interest, management fee, royalty and technical fees
* Dividends distribution to individuals and corporate entities of both foreigners and Malaysians are tax exempt
* No import duty, sales tax, GST and service tax for all international dealings
* For Malaysian dealings, 6% GST is applicable for company exceeded annual revenue of RM500,000 
* 0% personal income tax on Directors’ fee for foreign individual or corporate director
* 50% tax rebate on personal income of professional expatriate employment 
* 65% tax rebate for Malaysian professionals such as lawyer, secretarial, accountant, etc
* No inheritance tax
* No stamp duty on instruments on Labuan business activities, including the transfer of shares

* Able to access to more than 70 Malaysia’s tax treaty partners
* No foreign exchange control using Labuan offshore banks
* No tax on interest earned for deposits placement in Labuan banks
* 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
* Permitted to set up Marketing Office in Kuala Lumpur/Iskandar Johor
* Permitted to set up via Protected Cell structure.

 Snapshot of compliance of Insurance Entities
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 closure date of 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
Insurance License FeeLabuan FSA-Fee RM10,000-RM100,000 depends on nature of businessby 15th Jan
Statistical ReportingLabuan FSAFrom time to time

For the application of a suitable Labuan insurance license, please click here! Feel free to email us to explore the right insurance entity to set up to meet your objectives in Labuan Jurisdiction!

Name

Email

Nationality

Product/Services You Intend to Sell

Target Market
Malaysia OnlyWorldwide

Capital Amount

Company Structure (present or intended)
100% Foreign-OwnedJoint-Venture with Malaysian

Do You Intend to Set Up Physical Office/Shop in Malaysia?
YesNo

Do You or Your company Require Expatriate Visas?
YesNo

Other Info You Need Us To Know