Labuan is a special administrative region of Malaysia that offers a very attractive investment regime for foreign entrepreneurs. The Labuan company formation
process is quick and accessible and investors can choose a preferential taxation rate, provided that the company complies with certain requirements and that it operates in a certain business field.
The accounting requirements in Labuan are not burdensome. In this article, our team of Labuan offshore company agents answers some of the most common questions investors may have about the accounting and annual return regime for offshore companies here as well as the situations in which auditing is required.
What are the annual accounting requirements for a company in Labuan?
Companies in Labuan must comply with the general requirement of keeping proper accounting records in a location in Labuan. These relevant documents must be ready for inspection, in case one is requested. The annual return is submitted to the Financial Services Authority every year and the deadline to this submission is thirty days before the yearly anniversary of the company’s incorporation. a certificate from the company director is requested with the annual submission and, in some cases, this annual report is also accompanied by a relevant certificate issued by an approved auditor.
Another requirement is for the company directors to present the audited accounts and the report on unaudited accounts during a member’s meeting, which is to take place no later than nine months from the date on which these accounts were drawn up. A copy of the unaudited accounts is also to be submitted with the Labuan Financial Services Authority within one month from the member’s meeting (during which these unaudited accounts were approved).
What are the requirements for a foreign company in Labuan?
As far as the requirements for foreign companies in Labuan, these are subject to different requirements in terms of keeping the accounts: these documents do not need to be kept in Labuan. Regarding the annual submissions, this type of company in Labuan must submit the annual return, with the same applicable deadline, no later than 30 days from the anniversary of its registration as a foreign company in Labuan.
One of our agents can help investors with more information about how to open a company in Labuan
if they are interested in the special taxation regime applicable to registered companies.
What are the auditing requirements for a Labuan company?
Having the annual accounts audited is optional for companies involved in certain business activities in Labuan. Those for which the auditing and the submission to the Financial Services Agency is mandatory are the companies activating in the banking sector, insurance companies as well as publicly listed companies, offering their shares to the public. Another situation in which audited accounts are mandatory is when the company is a trading one that opts for the 3% taxation rate. The company can choose to be taxed under the Income Tax Act, a situation in which it would have to comply with several requirements set forth by the tax authorities.
The appointment of an auditor and the subsequent auditing can be decided through a member’s meeting.
Accounting services in Labuan
Investors who are interested in Labuan company formation can request specialized accounting services. These can include:
Financial statements: preparing the monthly or biannually reports, as requested by the Financial Services Authority.
Annual financial statements: complete assistance for the creation and submission of the annual financial statements
Bookkeeping and payroll: complete bookkeeping services, maintaining proper and accurate company accounts.
Payments: assistance for making the necessary invoice payments and bank account management, as needed.
Auditing: for those companies taxed at a 3% rate, assistance for appointing an auditor and complying with the process.
Complete outsourced accounting services are often the option of choice for many foreign investors in Labuan. This is preferable for investors who wish to meet the local accounting and reporting needs, as set forth by the authorities.
Account auditing is mandatory for Labuan companies that want to subscribe to the 3% tax rate for their trading activities. We recommend reaching out to one of our Labuan company formation agents for complete details on the process of appointing an auditor and preparing the necessary reports.
for complete services for companies in Labuan and for more information about the advantages of opening a trading company here.