Labuan is a special region of Malaysia
, which provides an attractive taxation scheme available for foreign investors. Businessmen can open a company in Malaysia
by setting up a foundation
, which is a type of legal entity in which the company’s management can start charitable or non-charitable activities. At the same time, businessmen should know that a Labuan foundation
will hold the rights on the company’s assets and our team of company formation representatives in Labuan
can offer assistance for the incorporation requirements established for this business form.
Types of foundations in Labuan
The applicable legislation available in Labuan offers several categories of Labuan foundations. The foundations in Labuan can be set up for charitable or non-charitable purposes, but the vehicle can also be used for wealth management purposes or asset management.
Charitable foundation in Labuan
Foreign investors interested in company formation in Malaysia should know that a charitable foundation in Labuan can offer relevant tax exemptions. The Labuan legislation provides a 100% exemption from paying the tax on distributions received from foundations or inheritance.
However, it is important to know that the charitable foundation in Labuan
should perform one of the charitable purposes established for the entity under the local legislation. For example, it can conduct activities that will help reduce poverty, develop education, protect the environment and others. Our team of company formation agents in Labuan
can offer more details on how to register a charitable foundation in Labuan.
Register a private foundation in Labuan
A private foundation in Labuan can be set up for wealth management purposes. The legal entity must be registered with the relevant authorities. The procedure of company registration in Malaysia in this sense states that the Labuan foundation must be registered with the Labuan Financial Services Authority, which functions under the regulations of the Ministry of Finance in Malaysia.
The taxation of the foundation will be performed under the rules of the Income Tax Act, as long as the foundation has assets which can be considered Malaysian property.
The foundation is exempted from paying the following:
• withholding tax;
• capital gains tax;
• inheritance tax.