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Company Formation Labuan



The Advantages of Setting up a Company in Labuan

Updated on Thursday 06th December 2018

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the-advantages-of-setting-up-a-company-in-labuan.jpgLabuan is a special region of Malaysia, which acts as one of the main offshore centers in Asia. Over the years, the region has become very attractive for the foreign businessmen who wanted to open a company in Malaysia, due to its taxation regime and the business incentives provided to those operating a business in Labuan. Businessmen can incorporate several types of legal entities in this jurisdiction and our team of company formation representatives in Malaysia can offer assistance on the registration of a Labuan company, as well as legal advice on the entities which are suitable for a designated business activity. 

Legal entities in Labuan, Malaysia  

Foreign investors who are interested in company formation in Malaysia can choose from two main types of companies that can be incorporated in Labuan, as prescribed by the main rule of law available for this jurisdiction, which is the Labuan Companies Act of 1990. Companies set up here are registered as offshore ones and they can take the following forms: 
  • •    trading companies; 
  • •    non-trading companies (also referred to as holding companies). 
The legal entities are registered following the same simple incorporation procedure, but it is important to know that they are liable to a different taxation system and they need to fulfill different requirements. Offshore companies that are registered in Labuan can have 100% foreign ownership and our team of company formation agents in Labuan can provide more details on this matter. You may request information and support if you want to open a company in Labuan.

How can I open an IBC in Labuan?

Labuan International Company or IBC as it is known is a preferred business structure chosen by foreign investors who are interested in tax advantages in this offshore jurisdiction. The registration of an IBC in Labuan is simple, and it starts as soon as the activities are set up, and the name is chosen. Also, institutions like the Inland Revenue Authority, Labuan Financial Services Authorities or the Central Bank of Malaysia will make the necessary approvals for an IBC in Labuan. Having 100% foreign ownership is a solid benefit for entrepreneurs from abroad who decide for investments in Malaysia. Besides that, 1USD is the minimum share capital for opening an IBC in Labuan. In matters of taxation, the 3% rate represents the flat fee imposed on the company’s profits generated in Labuan. Moreover, an IBC in Labuan is protected by a series of double taxation treaties signed by Malaysia with countries worldwide.

Taking advantage of complete privacy

Just like most of the offshore jurisdictions, Labuan offers complete protection for foreign investors who open companies. This means that information about the shareholders, about the managers and company beneficiaries are not publicly displayed. Complete anonymity and confidentiality are provided for companies in Labuan as long as the owners are not subject to a criminal investigation or a criminal record.

A virtual office for your business in Labuan

Many investors from abroad decide for virtual office services in Labuan instead of opening a traditional office. Such services are at a fraction of costs compared to a normal business office, and more than that, the company will benefit from the services of a virtual assistant who will take care of the daily activities in the firm: mail, phone calls, faxes, business meetings, etc. Your company in Labuan can benefit from complete virtual office services, so do not hesitate to get in touch with our team of company formation representatives in Labuan for complete details in this matter.

Main advantages of a Labuan company  

Companies registered in Malaysia traditionally require a business associate who is a local citizen. The commercial legislation available in Malaysia allows the incorporation of a company with 100% foreign ownership, a regulation which is also applicable in Labuan. An important aspect is that a company in Labuan does not need a director who is a national citizen of Malaysia, as the commercial regulations stipulate that the investor can also act as the company’s shareholder, as well as the company’s director. 
The minimum share capital of a Labuan company is established at USD 1. Moreover, the company registration in Malaysia can be completed in maximum two weeks and it is not required for the investor to be present in the country throughout the incorporation stages. The Labuan legislation does not impose the following taxes: 
  • •    sales and services tax; 
  • •    goods and services tax;
  • •    withholding tax on dividends;
  • •    withholding tax on interest;
  • •    capital gains tax.
There are also no audit requirements unless the company is operating in several industries, such as banking or insurance. 
Businessmen interested in receiving more details on the advantages of a company registered in Labuan are invited to contact our team of company formation specialists in Labuan


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