Co Formation

Labuan Company Formation

Labuan, officially the Federal Territory of Labuan, is a Federal Territory of Malaysia. Its territory includes Labuan Island and six smaller islands, off the coast of the state of Sabah in East Malaysia. Labuan's capital is Victoria and is best known as an offshore financial centre offering international financial and business services.   Malaysia is one of the largest and best-performing economies in ASEAN. Labuan's strategic location offers easy access to Asian markets, facilitating regional expansion.

 

Advantages of A Labuan Company

  • No restriction on the nationality of director, shareholder or beneficial owner
  • High tax efficiency
  • Can get a TIN for CRS
  • Registration is straight forward
  • High regard for economic liberty

 

Labuan Company Is A Good Vehicle For

  • Cryptocurrency Favorable
  • Financial Corporation
  • Trading
  • International Investment

 

Three Steps For Incorporating A Labuan Company

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Supply Information 

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Sign Documents 

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Receive Documents 

Submit information online or fill the download form.

Our officer will contact you to confirm service,

collect KYC and verify documents. Pay fee.

Prepare incorporation documents and sign registration documents.

Collect incorporation documents.

 

Documents Required For A Labuan Company

  • Passport or certified copies (if we cannot meet in person) of all the directors/ shareholders/beneficial owners.
  • Residential address proof or certified copies of all the directors/ shareholders/beneficial owners (must be in English or English translation).
  • 2 reference letters, one from bank, one from a professional organization
  • Our due diligence form.

 

Attractive Cost For Labuan Company Formation

 

Labuan Company Formation Fee

From US$3600

 

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  • Easy & confidential
  • 24/7 Support 
  • Dedicated client servicing

 

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Labuan Company Fact Sheet

 

General

Type of entity

Private Limited Company (can be trading company or non-trading company)

Type of law

Common

Corporate Taxation

Free for financial holding, 3-24% depending on business activities

Double taxation treaty access

Yes (country-wise). To be provided if needed.

Share Capital or Equivalent

Standard currency

US$

Permitted currencies

Any except RM

Minimum paid up

US$1

Usual authorized

US$1-US$1,400

Directors

Minimum number

1 

Local required

No

Publicly accessible records

No

Location of meetings

Anywhere

Shareholders

Minimum number

1

Publicly accessible records

No

Location of meetings

Anywhere, at least one annually

Company Secretary

Required

Yes

Local or qualified

Local

Accounts

Annual Tax Return

Yes, within 3 month in each of year of assessment, with an exception approval from Inland Revenue Board, Labuan.

Audit requirements

Optional.

Non-trading company opting to pay 3% tax per annum on audited net profits or flat payment of RM20,000 (approximately USD6,666).

Trading company has to pays taxes at 3% of audited net profits per annum and files its audited financial statements.

Requirement to file accounts

Filed annually no later than 30 days from the anniversary of the date of the incorporation of the Labuan company

Others

Requirement to pay annual licence fee

Yes

Economic Substance Requirements

Yes, depending on business activities

 

Whilst every effort has been made to ensure that the details contained herein are correct and up-to-date, it does not constitute legal or other professional advice. We do not accept any responsibility, legal or otherwise, for any error omission.

 

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Labuan Company Frequently Asked Question

Can a Labuan company be 100% foreign-owned ?

Yes.  A  Labuan company can be 100% foreign-owned.

Do I need to visit Labuan to open a company ?

Not necessary. INTERSHORES can register your Labuan company without traveling.

What is the minimum number of directors to start a Labuan company ? Is a local resident director needed ?

One director is needed to register a Labuan company. 

 

There is no local resident director required by a Labuan company.

What is the minimum number of shareholders needed by a Labuan company ?

Only one shareholder is required by a Labuan company.

Are shareholders/directors details of a Labuan company available for public inspection ?

No shareholders/directors details of a Labuan company be available for public inspection.

What is the minimum capital required by a Labuan company ?

There is no minimum capital requirement for a Labuan company.

Is a Labuan company required to submit an annual tax return ?

For a Labuan company, tax return must be filed by 31st March or a 10% penalty will be imposed on the outstanding balance.

What are Labuan economic substance requirements (ESR) ?

All companies incorporated in Labuan that are carrying out any “Labuan business activity” must mandatorily meet the following requirements of:

 

1.   Having a minimum number of full-time employees in Labuan.

2.   Satisfying the minimum required annual operating expenditure in Labuan.

 

Summarized the ESR below for each company type:

 

Type of Labuan Company

Minimum substance requirements for full time employee

Minimum substance requirements for annual operating expenditure

Insurance company and Takaful operators

4

RM150,000

International commodity trading company

3

RM3,000,000

Banking and investment company

3

RM180,000

Trust company

3

RM120,000

Fund managing company

2

RM100,000

Leasing company

2

RM100,000

Holding company

2

RM50,000

Labuan Payment Service Operator Licensed company

2

RM100,000

 

If a Labuan company does not meet the minimum substance requirements laid out in the 2019 LBATA amendments, the company will not be entitled to be taxed under LBATA 1990.  Instead, it will be liable to a corporate tax of 24% under the Income Tax Act 1967 of Malaysia.

 

All Labuan companies are also required to have a physical office space in Labuan for its full-time employees.

 

A dormant Labuan company is not required to meet the above minimum substance requirements.

 

What are the tax implications of a Labuan company registration ?

Corporate tax in Labuan is levied only on trading companies at 3% of audited net profit for income sourced outside Malaysia.  Non-trading (investment holding) companies are not subject to tax. 

 

Malaysia resident companies are subject to 17% corporate tax for chargeable income below MR500,000 and 24% for income above this threshold.

 

Non-resident Labuan companies are exempt from indirect taxes such as VAT, sales tax, custom duties and Goods and Services Tax (GST).  A resident Labuan companies making sales within Malaysia are levied indirect taxes in the form of GST at a rate of 6%.

 

Capital gains and import duties are completely exempt from capital gain tax in Labuan.

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