About Labuan
The Federal Territory of Labuan is a region of Malaysia. It comprises seven small islands, of which Labuan is the largest. Labuan lies off the north-west coast of Borneo, 8 km from the Malaysian state of Sabah. It is located on the major shipping and air routes of the Asian Region and is Malaysia’s only deep-water anchorage area.
The nation is economically strong and politically stable. Under the guidance of LOFSA (the Labuan Offshore Financial Services Authority) the Malaysian authorities have invested heavily into the improvement of Labuan’s physical infrastructure, which is now completely modernized. The legal system in Labuan is modeled on the English system, though special laws have been enacted to benefit offshore business operations.
Benefits of Setting up an Offshore Business in Labuan
- Minimum personnel required for company registration is 1 director and 1 shareholder. May be the same person
- Company registrants may be from any nationality
- No need to travel to complete registration
- Option of 3% tax on corporate profits, or a flat rate of US$6,000
- Non-trading companies (e.g. holding companies) are exempt from paying corporate taxes
- No stamp duty, custom duty or VAT
- Easy registration and compliance procedures for incorporation
- No trade license requirements for specific industries (e-commerce, import/export and consultancy services)
Key Corporate Features
| General | |
| Type of Company | Offshore Trading |
| Type of Law | Common |
| Shelf company availability | No |
| Time to establish a new company | 4 - 8 days |
| Minimum government fees (excluding taxation) | RM1500 |
| Corporate Taxation | 3% or RM20,000 |
| Double Taxation Treaty Access | Yes |
| Share capital or equivalent | |
| Standard currency | US$ |
| Permitted currencies | Any except RM |
| Minimum paid up | US$1 |
| Usual authorised | US$1 - US$1,400 |
| Directors | |
| Minimum number | One |
| Local required | No |
| Corporate Directors Permitted | Yes |
| Publicly accessible records | No |
| Location of meetings | Anywhere |
| Members | |
| Minimum number | One |
| Corporate Members permitted | Yes |
| Publicly accessible records | No |
| Location of meetings | Anywhere |
| Company Secretary | |
| Required | Yes |
| Local or qualified | Local |
| Accounts | |
| Requirements to prepare | Yes |
| Audit requirements | Not required if company pays a flat tax rate of RM20,000 |
| Requirements to file accounts | Not required if company pays a flat tax rate of RM20,000 |
| Publicly accessible accounts | No |
| Other | |
| Requirement to file annual return | Yes |
| Change in domicile permitted | Yes |
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