Labuan is a federal territory of Malaysia and a financial center that offers many tax and regulatory advantages for offshore company creation. Bearing in mind the generous business climate in Labuan’s main industries, both locals and foreigners can easily set up their firms, open Labuan trust companies
and commence the activities, in respect with the Commercial Code, the Labuan Companies Act 1990 and the accounting standards. It is impetuous to hire the services of an accounting firm
as soon as your company has been incorporated in Labuan
. For a proper management of the financial activities of your company, we suggest you address to our accountants in Labuan
who can also handle the requirements in this sense, in compliance with the Malaysian Accounting Standard Board
and the Financial Reporting Standards
What types of accounting services can I receive in Labuan?
The accounting standards in Malaysia, including in Labuan, are in a strong connection with the International Financial Reporting Standards (IFRS). Among the services our team of accountants in Labuan can offer, we mention the following:
• payroll, bookkeeping, and support for submitting the annual financial statements in Labuan;
• support for VAT registration and tax filing, in compliance with the business type you have in Labuan;
• invoices payments and the control of the bank accounts in your firm;
• tax minimization methods and tax advice if they are necessary to run your business and activities properly.
We are a team specialized in company incorporation in Labuan
and also in accounting matters for several types of companies available for this offshore jurisdiction, therefore, we invite you to talk to our advisors for complete support.
What is bookkeeping in Labuan?
Keeping the financial records of your business in Labuan is called bookkeeping. All the financial transactions are recorded and kept for several years, with respect to the Malaysian legislation in the accounting field. All invoices are normally saved in the company with the help of bookkeeping. According to law, for the purpose of the accounting directive set forth in Labuan, the bookkeeping records are to explain all of the transactions. They can be either physical or stored via an electronic means. Some examples are invoices, cheques, payment orders, receipts, letters of offer and others.
What is payroll in Labuan?
Our accounting firm in Labuan can handle the employment matters, or simply the payroll process for your workers in the company. There are varied types of operations, including payroll taxes that can be controlled by our team of accountants.
What other accounting services can I receive for my business in Labuan?
Among the accounting service
s you can receive for your company in Labuan
, we mention the periodical or the annual financial statements, trial balance, cash flow statements or transaction entries. Our team of advisors are familiar with the accounting programmes and software accepted at an international scale and can suitably handle your financial matters.
Please feel free to reach out to our accountants in Labuan for more information about their services.
What are the main provisions for accounting in Labuan?
Understanding the local accounting and record-keeping requirements is important before opening a Labuan offshore company. Many foreign investors who open a company will prefer to request the services offered by a team of accountants who are accustomed to the local procedures.
Some of the main issues to take into consideration with respect to accounting and reporting are the following:
the applicable laws: a professional team of accountants will follow the Directive on Accounts and Record-keeping for Labuan Entities which includes several Sections of relevant Acts.
accounting records: these are the actual books and documents used for preparing the financial statements; they are the records that are used as proof for the financial transactions as well as the existing agreements between entities.
validity period: the documents mentioned above are to be stored for at least six years from the date of the transaction.
penalties: failure to comply with the proper keeping of records as well as the reporting requirements results in penalties as per the laws in force; one of our agents who specialize in Labuan company formation can provide more details.
Company directors in Labuan and in Malaysia are expected to ensure that the legal entity complies with the accounts and audit requirements. Failure to do so can result in penalties for the director himself, as he can be accused on guilty of an offence against the Acts in force.
Before requesting accounting services in Labuan it is recommended to check the credentials of the individuals who will provide the service. For this purpose, the accountants should be a member of the Malaysian Institute of Accountants
. This is the institute in charge if regulating the accountancy profession and checking its member’s compliance trustfulness and ethical conduct.
Audit requirements in Labuan
Apart from the general accounting and reporting principles, company owners in Labuan also need to observe the guidelines for auditing. This activity is especially important for companies in the banking sector as well as for those that provide other types of financial activities. When appointing an external auditor, certain criteria are to be observed, such as the fit and proper principle issued by the Labuan Financial Services Authority. The auditor must not have been convicted of any offense and is required to have the skills, knowledge, and experience to perform the activities according to the currently approved auditing standards. The external auditor must have an operational office in Labuan.
Investors who wish to know more about internal and external corporate audits can reach out to our accountants in Labuan.
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.
Labuan company formation statistics
Company formation in Labuan is attractive for a number of reasons, starting with the low taxation regime and the convenient location near Malaysia and the rest of the Asian market. Labuan acts as a regional financial hub and it is a preferred jurisdiction for offshore company formation. The growth in the number of new companies is relevant to its position:
- 2018 was a year during which the number of new companies grew by 12.5%;
- there were 3,390 trading companies and 2,024 non-trading entities;
- most of the companies were incorporated by investors from Asia and the Pacific region, amounting to 60.1%;
- other regions include Europe, with a percentage of 12.1% of the total Labuan companies during the analyzed period and the Far East with 12.8% of the number of companies;
- the same 2018 report revealed that most of the employees were Malaysians who were based in Labuan (576 in 2018 or 96.4% of the total number).
If you would like to know more about the accounting services for your company in Labuan
, we invite you to contact
our team of accountants in Labuan
. We can cater to your needs in the firm, in agreement to the applicable laws.