A. GENERAL
1. Governing Law
Labuan Companies Act 1990, which provides for the incorporation of companies, either
2. Type
(a) Limited by share
(b) Limited by guarantee
(c) Unlimited
(d) Foreign registered company
B. CORPORATE FEATURES
1. Qualifying Criteria
Residents and non-residents of Malaysia are permitted to establish a Labuan company.
2. Transaction Currency
(a) Any currency except Malaysian Ringgit (MYR)
(b) A Labuan company business in not permitted to transact in Malaysian Ringgit (MYR) other than:-
(i) For the purpose of defraying its administrative expenses and statutory expenses
(ii) For the holding of investments in a domestic company
(iii) For the holding of debt obligations in a domestic company and as specified under Section 7(4) of the Labuan Companies Act 1990
3. Shareholding
(a) Minimum of one (either individual or corporate entity)
(b) No bearer shares are allowed
(c) Shares shall be of no par value
4. Directors
Minimum of one (either individual or corporate entity)
5. Resident Secretary
Compulsory
6. Annual Returns
Filed annually not later than 30 days prior to the anniversary of the date of its incorporation
7. Annual Fee (payable to LFSA)
On or before the anniversary date of its incorporation
8. Audited Accounts
(a) Optional
(b) Required for Labuan company opting to pay 3% tax per annum on audited net profits and Labuan company with licensed activities
9. Record-keeping
All Labuan companies (including branches and subsidiaries) shall maintain all accounting records for a period not less than 6 years from the date an account transaction has been completed.
10. Re-domicile
Change in domicile is permitted
11. Company Search
There are no publicly accessible records of Labuan companies.
12. Corporate Tax
(a) 3% of net audited profits
(b) Non-trading activities: Zero Tax
(c) No withholding tax, no capital gain tax, no stamp duty on offshore instruments
13. Commercial Substance Requirements
A Labuan company carrying out Labuan business activity that is specified in the Schedule of Labuan Business Activity Tax (Requirements For Labuan Business Activity) Regulations 2018 (“LBATR”) shall have the number of full time employees and an amount of annual operating expenditures as specified in the said Schedule of the LBATR.
14. Marketing Office (Optional)
(a) Limited to facilitate meetings with clients and establish contacts with potential clients of the Labuan company
(b) No maintenance of books and records (including trading activities) shall be done through, from or in the Marketing Office
(c) Anywhere in Malaysia
(d) With the exception of insurance brokers and captives, all Labuan companies that have a Marketing Office are required to maintain a Management Office in Labuan
(e) Location and address
(i) The Marketing Office must be segregated and independent from office of other entity / company and has its own phone line, fax machine and computer terminal separate from other entity / company
(ii) The premise of the Marketing Office should strictly be used for the purposes as specified under paragraph 16(a) and not for personal use or accommodation
(f) The number of staff in each of the Marketing Office should not exceed four
(g) Name and Signboard
(i) The name of the Labuan company must be easily legible in Romanised characters, printed on a signboard affixed at the entrance of the Marketing Office
(ii) The signboard must contain the company’s name, incorporation / registration number and license number (if applicable)
(h) The Labuan company must also comply with requirements of the relevant local authorities with regard to the signboard and Marketing Office, wherever applicable
