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Set up a FMCG Company in Labuan

Updated on Monday 05th August 2019

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Set-up-a-FMCG-Company-in-Labuan.jpgA fast-moving consumer goods (FMCG) company set up in Labuan will enjoy all of the tax and business advantages of this Federal territory of Malaysia. Moreover, the favorable position will allow the company to expand its business activities and engage in trade with other nearby locations.
 
Fast-moving consumer goods are products that are commonly purchased by clients, thus are sold quickly, and can include a wide array of items, from packaged foods and beverages to toiletries or over-the-counted drugs. These products are sold in large quantities in order to ensure a good profit margin.
 
Investors can set up an FMCG company with the help of our agents who specialize in Labuan offshore company formation
 

What are the requirements for an FMCG company?

 
Companies that sell fast-moving consumer goods will typically commercialize a wide range of items, starting with food and beverages but also extending to toiletries. These types of products are characterized by their frequent re-purchase rate, they are daily goods or goods that are replaced very often. They have a low price and, in some cases, they have a short shelf live.
 
Investors who are interested in Labuan company formation should pay attention to the following issues concerning FMCG products:
 
  • - Quantity: the purchase volume is high for these products and they are sold in large quantities.
  • - Packaging: this is an important component as some of these can have a short shelf life.
  • - Distribution: the distribution network is extensive in case of these products; arrangements for logistics are required.
  • - Inventory: the merchandise turnover for FMCG products is high and investors will require accounting services.
 
This is a dynamic market that continues to develop as many customers are also purchasing these goods online. Investors who are interested in Labuan offshore company formation can start the incorporation of the business and then open an online store for selling these goods as an alternative to opening a traditional store.
 

Can foreign investors open an FMCG company in Labuan?

 
Yes. Foreign investors in Labuan are allowed to have 100% foreign ownership in a Labuan International Company. A trading company in this jurisdiction will be subject to a 3% tax and it can maintain the same tax rate when dealing with Malaysian customers.
 
Foreign investors often prefer to open a company in Labuan compared to Malaysia because of the low minimum paid-up capital (only a minimum of 1 USD), the low tax rate and the flexibility of the business structure. The overall set up costs are low and companies will not require trade licenses in a number of business sectors of interest, like trade which can apply to investors who open an FMCG company.
 

What are the steps to open a company in Labuan?

 
Investors who open an FMCG company in Labuan will need to follow the general process for incorporation and one of our agents can provide complete assistance during all of the steps, those required for the preparation of the incorporation and afterward. 
 
Investors will need to select a business objective and then prepare the incorporation documents. In the articles of association, the founders will include details on the company’s activities, its registered office, the directors and shareholders. The company can be incorporated by only one shareholder and it can have only one director. Investors will need to choose a company name and verify its availability and they will also need to apply for a work visa, which is valid for two years and then it can be renewed. One of the final steps is to open a bank account for the company where the minimum capital will be deposited.  
 
The registered office or the management office needs to be located in Labuan. If the founders wish, they can then base their marketing office in Kuala Lumpur. 
 
By opening a company in Labuan, company owners who enter the FMCG sector will have access to surrounding markets: Malaysia, Vietnam, Indonesia or Singapore. 
 
Investors who are interested in doing business in the Asia Pacific region will often choose to open a company in Labuan. The following statistics highlight the situation in Labuan:
 
  • - Labuan was one of the Malaysian states that had a faster economic growth, of 6,6%, in 2018, compared to the national average of 4,7%.
  • - the services sector in Labuan recorded a growth of 7.5% in 2018 while in 2017 the growth for the same sector was 5.2%;
  • - the GDP per capita in Labuan in 2018 was RM 74,337.
 
Contact our Labuan offshore company formation agents for more information on how to open a company in this jurisdiction, the conditions for foreign investors are the particularities of the fast-moving consumer goods market. 
 

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