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Labuan Company

STRUCTURING YOUR LABUAN COMPANY THE RIGHT WAY

A Labuan company can deliver an array of positive results for you and your investment – provided it is structured in the most suitable way. Using the breadth of our knowledge, experience and ability for supporting businesses and high net-worth individuals in the international Trust sector, we will assist you with your Labuan company formation.

The Labuan Companies Act 1990 ensures high levels of confidentiality and a wealth of financial benefits, whether your Labuan Company is involved in trading or non-trading activities. We are able to advise you at the planning stage as well as actually help in the formation and ongoing promotion of your company in Labuan – and because our services are tailored to each client, you’ll receive the most comprehensive, bespoke and cost-effective support from us.

OVERVIEW OF A LABUAN COMPANY

The Labuan Companies Act 1990 provided for the establishment of companies in Labuan, opening up the jurisdiction to a range of overseas investors, and marking the beginning of its remarkable growth as an offshore financial centre.

Labuan companies may carry out either trading or non-trading activities on or via the island through the Labuan IBFC.

A Labuan non-trading company holds investments in securities, stocks, shares, loans, deposits or other properties on its own behalf to make a profit.  A Labuan trading company, on the other hand, makes a profit by buying and selling goods and services to international customers. Examples of trading companies include:

  • Banking and financial institutions
  • Insurance companies
  • Fund management companies
  • Leasing companies
  • Shipping operations
  • Any other activity which would not be defined as a non-trading company

WHAT ARE THE BENEFITS OF SETTING UP A COMPANY IN LABUAN?

There are many benefits to setting up a company in Labuan. It is strategically located for carrying out business in the Asian market as it operates on the same time zone as a number of large Asian cities. Labuan IBFC is just a short flight from Kuala Lumpur and Kota Kinabalu and there are plenty of flights daily. Labuan also has an excellent infrastructure, and a pool of talented, experienced and multilingual professionals who can help you grow and develop your business.

Furthermore, your privacy is fully protected as a comprehensive regulatory framework ensures that Labuan complies with international standards of service, performance and confidentiality. In addition to this Labuan is a ‘white listed’ jurisdiction and endorses the bilateral exchange of tax information with foreign authorities.

Labuan companies also benefit from:

  • Competitive operating costs which help keep overheads down
  • Excellent support services, including legal, accounting and management services
  • No nationality restrictions for shareholders or directors
  • A politically and economically stable environment
  • Minimal foreign exchange control regulations

TAX BENEFITS

The Labuan IBFC offers very flexible tax options to investors. You can choose to be taxed under the Labuan Business Activity Tax Act 1990, or the Malaysian Income Tax Act 1967, whichever is more appropriate for you.

All Labuan non-trading companies are totally exempt from tax, while Labuan trading companies pay tax on profits at a very reasonable rate of 3% of the net profit or a lump sum of MYR 20,000 (USD 6,700), whichever is less. In addition to this there is no capital gains tax and no stamp duty on instruments related to business activities carried out through the Labuan IBFC.

Labuan companies are also exempt from withholding tax on the following:

  • Interest paid to a resident or non-resident who is not engaged in the business of banking, finance or insurance
  • Interest paid to a non-resident or other Labuan company
  • Lease rental paid to non-resident
  • Technical or management fee paid to a non-resident or other Labuan company
  • Royalty to a non-resident or other Labuan company
  • Distributions made by an offshore trust to non-resident beneficiaries

SOME BRIEF FACTS ABOUT LABUAN COMPANIES:

  • They operate under common law or civil law jurisdictions
  • It takes approximately 1 day to incorporate a Labuan company
  • The minimum annual fee is MYR 1500 (approx USD 485) and there is no annual return filing fee
  • There are no par value shares or no minimum share capital requirements
  • Requirement of authorised share capital is removed
  • Companies may trade in any currency except Malaysian Ringgit
  • There must be at least one shareholder and one director which can be an individual or a corporation
  • The company secretary must be an approved trust officer of a Labuan Trust Company, such as ourselves, or an approved domestic company wholly owned by a Labuan Trust Company
  • Directors’ and shareholders’ meetings may be conducted anywhere in the world and board meetings may be conducted via telephone
  • Labuan companies have access to the double taxation treaties that Labuan has signed with 72 countries (as of 5th July 2010)
  • Amalgamation of companies is permitted
  • Section 47A of the Labuan Companies Act, 1990 permits issuance of Treasury Shares
  • Introduction of Company Limited by Guarantee
  • Summary winding up procedure for solvent company

WHY WE ARE THE RIGHT PEOPLE TO HELP YOU SET UP A LABUAN COMPANY

We are a fully licensed trust company with a highly experienced team of dedicated professionals. We can help you plan, establish and structure a Labuan Company ensuring you get a bespoke service that meets your particular business needs. We also offer some of the most competitive prices in the industry.

To find out more about how we can help you set up your Labuan Company, contact us on our live support or email us at info@labuanborneotrustees.com