Labuan
Federal Territory of Labuan is located off the northwest coast of Borneo, north of Brunei Bay and faces the South China Sea. It comprises of the main island of Pulau Labuan and six smaller islands. It became one of the preferred offshore jurisdictions in Asia since the government made it into an international offshore financial centre in 1989.
A Labuan company may participate in business activities and enjoy certain tax benefits (click here to read more). Business owners would need to be licensed if they are looking to undertake certain businesses, such as banking, insurance/ insurance-related, fund management, leasing, brokerage and company management businesses.
Business transactions made via a Labuan entity must be made in currencies except for Malaysian Ringgit. Labuan companies can own controlling stakes in a domestic Malaysian company and are also allowed to undertake shipping operations with non-residents.
Incorporation Process and Timeline
| Limited Liability Company (Tax Exempt) | Representative Office | Labuan Trust | |
| Minimum number of directors | 1 | 1 | 1 |
| Minimum number of shareholders | 1 | 2 | Parent Company |
| Local Presence (director/ shareholder/ officer) | No | Yes, 1 local director/ partner/ manager | No |
| Maximum Foreign Shareholding | 100% | 100% | 100% |
| Physical registered office address requirement | No | No | No |
| Minimum Paid Up Share Capital | USD 1 | USD 1 | USD 60,000 |
| Incorporation Timeline | Less than a month | Less than a month | Less than a month |
| Public Register of Shareholders and Directors | No | No | No |
| Regulator | Labuan IBFC | Labuan IBFC | Labuan IBFC |
Taxation and Accounting
| Limited Liability Company (Tax Exempt) | Representative Office | Labuan Trust | |
| Corporate Tax | 3% | N/A | N/A |
| Annual Tax Return Filing | Yes | Yes | No |
| GST Reporting to Local Government | No | No | No |
| Auditor Requirement | No | Yes | No |
| International Currency Control on Remittance | No | No | No |
Others
| Limited Liability Company (Tax Exempt) | Representative Office | Labuan Trust | |
| General Activity | International holding/ trading | Marketing | Wealth/ Asset protection |
| Work Permit for Expatriates | Yes | No | No |
| Economic Substance Requirement | Yes | Yes | Yes |
Corporate Bank Account
| Limited Liability Company (Tax Exempt) | Representative Office | Labuan Trust | |
| Corporate Bank Account Opening | Yes | Yes | Yes |
| Bank Account Opening Timeline | 1 – 4 months | 1 – 4 months | 1 – 4 months |
Labuan offers the following benefits:
- Straightforward business registration.
Can be 100% foreign-owned and there is no travelling required to set up a Labuan entity. Moreover, only one shareholder and director is required, both positions can be filled by the same individual. Clients will also have access to an online portal to regularly check the status of the incorporation process. - Established financial hub.
International and local trading are both permitted, many companies looking to enter and expand into Asia have established offices in Labuan, including the Fintech and Islamic finance industry. The jurisdiction is also under the Common Reporting Standard (CRS), Base Erosion and Profit Shifting (BEPS)- compliant. - Low tax regime.
Only 3% or a flat fee of RM 20,000 (~USD 4,500) on annual net profits. No requirements to charge sales/ service tax or GST on sales transactions.
Labuan Company Registration Guide
Labuan Financial Services Authority (LFSA) was established on 15 February 1996 under the Labuan Financial Services Authority Act 1996. Labuan FSA is the statutory body responsible for the development and administration of the Labuan International Business and Financial Centre (Labuan IBFC).
Enigmatig Services in Labuan
With more than a decade of experience, our team at Enigmatig is here to meet your business needs beyond just company formation. We also provide the following services in Labuan:
- Company formation
- Assistance in Business Management
- Corporate Management advisory
- Provision of registered agent and registered address
- Provision of company management, directorship, and shareholding services
- License application assistance
- Onshore/ Offshore bank account introductions and applications
- Virtual office services and other corporate services
- Nominee services
Application Process:
- Submit your interest here
- Our Offshore Formation Specialists will reach out to you for an in-depth discussion
- A customised proposal will be sent to you upon uncovering your needs,
- Upon the proposal confirmation, we will require the of the following information for the application
- Proof of Identity
- Proof of Residence (within the last 3 months)
- director(s),
- shareholder(s) and
- beneficial owner(s)
Once the above has been approved, we will send you an invoice for payment.
The incorporation process will commence upon receiving payment.
Enigmatig deals directly with the authorities instead of the use intermediaries in your application process. In this way, we are able to ensure our prices remain competitive while you are ensured of utmost privacy and care in your application.