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HOW DO I ESTABLISH A LABUAN COMPANY?
Incorporation of a Labuan company must be done through a Labuan Trust Company. The application should be submitted together with the Memorandum and Articles of Association, consent letter to act as director, statutory declaration of compliance as well as payment of registration fees based on authorised capital.
Please click here for the list of licensed Labuan trust companies. WHAT ARE THE DIFFERENCES BETWEEN TRADING AND INVESTMENT COMPANIES? Investment companies usually only “hold” assets, or shares in companies located in other jurisdictions. Trading companies are defined as those which actually carry out business on a day to day basis.
WHAT FEES ARE PAYABLE FOR THE ESTABLISHMENT OF A LABUAN COMPANY?
The annual fee to be paid to Labuan FSA is MYR1,500 for a Labuan company and MYR5,300 for a foreign company that wishes to establish a branch in Labuan. While the cost of incorporation or registration differs depending on the size of capital as illustrated in the table below:
Registration Fees
| Type Of Company |
MYR* |
USD* |
| Memorandum & Articles of Association |
100 |
33 |
| Statutory Declaration |
50 |
16 |
| Consent to act as director |
50 (per director) |
16 |
| Statutory fee for reservation of name |
50 |
16 |
| Nominal Capital |
MYR* |
USD* |
| Up to MYR50,000 |
1,000 |
327 |
| Above MYR50,000 and less than MYR1 million |
2,000 |
656 |
| Above MYR1 million |
5,000 |
1,639 |
| Registration of foreign company |
6,000 |
1,967 |
|
MYR* |
USD* |
| Annual fee |
1,500 |
492 |
| Lodgement fee for forms/documents |
Waived |
- |
* Based on exchange rate of USD1 = MYR3.05
ARE THERE ANY REQUIREMENTS ON MINIMUM CAPITAL AND SHAREHOLDING? A minimum of one share is required. Apart from this there is no minimum capital requirement, and Labuan companies may issue shares of different classes and of different rights but no bearer shares are allowed. Shares may be denominated in any currency except in Malaysian Ringgit.
The minimum number of shareholders in an offshore company is one (1). The shareholder may be an individual, a corporation or a trust company holding the shares as a nominee, or on trust. WHAT IS THE COMPOSITION OF DIRECTORS AND SECRETARIES IN A LABUAN COMPANY? A Labuan company must have at least one director who can act as a resident director and a resident secretary.
ARE THERE ANY AUDIT REQUIREMENTS? A Labuan company is required to maintain proper accounting and other records in Labuan, and those proper accounting and other records shall be kept at the registered office of the company or other places in Labuan. Such accounting and other records shall be open at all times for inspection by a director of the offshore company.
WHAT TAXES ARE PAYABLE IN LABUAN IBFC? The Labuan Business Activity Tax Act 1990 encapsulates the jurisdiction’s tax structure and provides all Labuan registered trading companies the yearly option of either paying a flat tax of MYR20,000 per annum or 3 percent of net profit. Labuan investment holding companies, non trading companies and investment entities are not subjected to tax on investment income. There is also an option for all Labuan trading entities and companies to make an irrevocable election to be taxed under the onshore Malaysia Income Tax Act 1967. DO I NEED A PHYSICAL PRESENCE IN LABUAN? Yes. Labuan companies are required to engage the services of a Labuan Trust Company, which company will serve as the registered office.
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