Why Labuan International Business and Financial Center (IBFC)?

Updated: Feb 15

Labuan IBFC Asia Pacific’s Leading Midshore


· Strategically located in Malaysia, sharing common time zone with major Asian cities, complementing financial centers of Hong Kong, Singapore & Shanghai

· A leading business and financial center in Asia Pacific with growing reputation and track record

· Striking an ideal balance between client confidentiality and compliance with international best standards

· Robust and well-balanced legal and regulatory framework

· A tax-efficient jurisdiction to facilitate businesses

· Access to Malaysia’s double taxation treaty network with more than 70 countries

· A complete range of solutions for business and investment structures for cross border transactions, business dealings and wealth management needs


Commonly Used Legal Structure

Foundation

Labuan Company

Trust

Partnership


When to use Labuan Entity?

· Investment holding

· Trading activity

· Mutual fund (Private or Public fund)

· Family office

· Asset protection

· Wealth management

· Estate planning

· Charitable purposes

· Asset ownership

· Licensed activities:

o Financial

o Banking

o Insurance & insurance related

o Security licence

o Capital market

o Leasing


Tax Framework

· Govern by Labuan Business Activity Tax Act 1990 (“LBATA”)

· Trading activity – 3% tax

· Non-trading activity – no tax

· No withholding tax, stamp duty, capital gain tax

· Huge Double Taxation Agreement network


Tax Exemption

100% exemption on directors’ fees

100% exemption on dividend

50% exemption on gross income (managerial capacity) for non-Malaysian

50% exemption on gross housing and Labuan Territory allowances

65% exemption on statutory income from Qualifying Professional Service Provider


No Withholding Tax

No Capital Gain Tax

No Inheritance Tax

No Indirect Tax

No Import Duty / Sales Tax

No Stamp duty


Labuan Company


All Labuan companies are governed by the Labuan Companies Act 1990 (“LCA”) and companies incorporated in Labuan may carry out either trading or non-trading activity in, from or through Labuan.


Types of Labuan Company

Limited by share

Limited by guarantee


Key Corporate Features of Labuan Companies


Share Capital

· Permitted currencies - Ringgit Malaysia

· Minimum issued capital

· No par or nominal value

· Authorised capital – not applicable


Directors / Shareholder / Secretary

· Minimum one (1) director

· Minimum one (1) shareholder

· Local director requirements is not mandatory

· Can be individual / corporate shareholder

· Resident Secretary is required


Office

· Registered address – address of the principal office of a trust company in Labuan

· Marketing office – optional in Kuala Lumpur or Johor Bharu

· Co-location – permissible for Holding Company (Kuala Lumpur or Johor Bharu)


Company Structure

· Amalgamation by merging two or more companies into one is permissible

· Re-domiciliation is allowable

· Management or shareholding structure is not publicly accessible


Annual Requirements

· Annual Return and Annual General Meeting (AGM)

· Annual government fee

· Annual tax return

· Accounts to be kept in Labuan

· Audit required for trading activities



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