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Malaysia DTA for Labuan Entities

Malaysia has one of the widest tax treaty partners in the world and Labuan entities are eligible to tap into it. Labuan being a midshore jurisdiction is much better off compared to Cayman Island, BVI, Seychelles, etc who has barely a handful of tax treaty partners. With OECD is aiming to eliminate tax avoidance, this is one of the reasons why Labuan is the most sought-after jurisdiction for commercial substance, as it enjoys low corporate tax and there are more than 70 double tax treaties that Malaysia is in agreement with and more than 70 double tax treaties.

There are some countries which do not recognize Labuan as part of Malaysia for the double tax treaties due to its International Business Financial Center status. To mitigate this non-recognition, Labuan entities have given the option to elect to be taxed by the Malaysian local tax regime (Income-tax Act 1967 (“ITA”) to allow complete enjoyment of the full list of Malaysia Double Tax Agreements (DTA) that have been signed.

Malaysia DTA For Labuan Entities

Below is the latest list of 70 tax treaty partners that have signed with the Malaysian government:

Malaysia DTA For Labuan Entities

Malaysia DTA For Labuan Entities- Excluded List

There are 14 countries have excluded Labuan entities in the DTA:
Australia, United Kingdom, Japan, Netherlands, Sweden, Luxembourg, Syechelles, Chile, Indonesia, Spain, South Africa, India, Germany and South Korea.

Malaysia DTA For Labuan Entities

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Product/Services You Intend to Sell

Target Market
Malaysia OnlyWorldwide

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

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