Labuan is a Federal Territory located in the East of Malaysia. It was established as a midshore financial centre in October 1990 to provide business activities in banking and insurance, trust and fund management, investment holding and trading activities carried on by multinational companies. It is a well-regulated jurisdiction by Labuan International Business and Financial Centre (Labuan IBFC) which is wholly owned by Labuan Financial Services Authority (LFSA) to promote and market of Labuan as the premier international business and financial centre in Asia Pacific.
As Labuan is one of the countries who have agreed to work with the Organisation for Economic Co-Operation and Development Body (OECD) to report for non-residents and assets along with the setup of Common Reporting System (CRS), this allows the tax authorities to trade information thru Automatic Exchange of Information (AEOI) on expatriates staying abroad for tax assessment purpose. This is an essential element for entrepreneurs to incorporate their business with real commercial substance and a worry-free jurisdiction. Labuan is a low corporate taxation jurisdiction, and it has more than 70 tax treaty partners in the Double Taxation Agreement (DTA).
FEATURES OF LABUAN COMPANY
Relative Low Corporate Tax
Setting up a Labuan offshore company allows the management team to enjoy the corporate tax rate as low as 3% (the non-Labuan offshore companies corporate tax rate is 24%).
There is no tax policy in place currently to tax the investment driving to Labuan from foreign and Asian companies. The director’s fee and dividends are not taxed as well.
The investments holding companies can be exempted from being audited as they are not taxable. The company is also protected from double taxation, credit to Malaysia’s double taxation agreements.
No Restriction Towards Foreign Ownership & Banks Accounts
In certain sectors such as the financial sector, there is a limit up to 70% for foreign equity ownership of investment banks, Islamic banks, insurance companies and takaful operators.
By having offshore companies, the company can has 100% foreign ownership. There is also no restriction on the nationality of the bank accounts which provides more flexibility to trade in either Ringgit Malaysia or foreign currency bank accounts.
Flexibility in Fund & Shares Transfer
Having multiple offshore companies allows the transfer of funds and shares that are free from government reporting. Thus, it is definitely environmentally friendly, as more paperwork can be avoided.
Ease of Incorporation of Offshore Companies
It generally takes 1-2 days to incorporate an offshore company while the establishment of normal companies takes 8 to 14 days.
Excellent Confidentiality Aspect
Having offshore companies in place offers a high level of confidentiality, where any unauthorized disclosure of the client information can incur a penalty.
If the management team has a concern in attorneys, employers and employees and ex-business partners intruding the company’s privacy, then incorporation of offshore companies can provide the management team peace of mind!
The management team can focus on expanding the business and offer the products and services to a global platform with confidentiality maintained.
Onshore Incorporation
An onshore company is incorporated in a home country with the purpose of doing business within the specific jurisdictions.
We have experience assisting our clients in setting onshore companies in Singapore, Hong Kong, Malaysia, UK, US and Australia.
We provide the comparison analysis of setting a company in Malaysia versus setting up in Labuan, Hong Kong, Singapore, British Virgin Islands and UAE.
The onshore incorporation is different for each country in term of tax structures, thus many investment decisions that we propose vary according to location preference, political stability, tax structure and the currency strength.
Ease of Name Registration Process for Companies
The pain of going through name searches for days and weeks might discourage investor sentiment in doing business. With the offshore company in place, the name searches can be conducted within 2 hours, and name reservations can be made within a day.
Trust and Foundation Services
A trust company is a legal entity that acts as trustee on behalf of a person or business for the purpose of administration, management and eventually the transfer of asset to a beneficial party.
Our customers can enjoy the benefits such as tax savings, asset protection, privacy, great level of confidentiality, proper succession and relationship planning.
Administration Services
Our team has extensive experience to support the company in term of:
Process of Setting Up a Labuan Company
The main reasons to set up your business in Labuan are:
Fees
Company Incorporation Fees:
USD 3,500 – Labuan Company Application / Bank Account / Virtual Office Rental
Annual Renewal Fee:
USD 2,000 – Labuan Authority Fee / Secretarial Fee / Annual Tax Filing
Labuan License Entities
- Money Brokering – FOREX Exchange / Cryptocurrency Exchange
- Private Fund / Fund Manager – Group Funding for Investment
- Leasing – Vessel & Shipping
- Global Incentives For Trading (GIFT) – Commodity Trading
- Labuan Foundation – Private Wealth Management