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No single product suits everyone, different structures for different niche of peoples. Contact us to learn more about how to achieve your goal. You tell us your goal and we will tailor-made the services to meet your goal. Upon setting up / registering with us, you can start anywhere, go anywhere and work in the way that best suits your own working practices, while we take care of statutory compliance and other paper work for you. We provide foreseeable costs and deliver value for money, reducing the need for major capital outlay with predictable pay-per-use pricing.

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About Labuan

Labuan Company

Licensed Entity

Expatriate

Vessel Registration

Laws & Regulations

Useful Links

About Labuan

Labuan Map

Labuan, a tropical island in Malaysia situated approximately 10km off the northwest coast of Sabah in East West Malaysia. As Malaysia's deepwater anchorage, Labuan is a free port, a Federal Territory, and an International Business and Financial Centre (IBFC). Labuan is strategically located in the middle of the Asia-Pacific region and equidistant to major cities including Kuala Lumpur, Singapore, Hong Kong, Taiwan, Seoul, Manila and Jakarta. It shares the same time zone, language and culture with most of them. It is also located in the waters of the South China Sea, close to major shipping routes and offshore oil and gas fields.

Labuan International Business and Financial Centre (IBFC)

Labuan offers unique proposition as the most cost-effective yet well-regulated base from which to access the region. Cost-effective presence is conveniently afforded without the need to have local ownership. In Labuan, there is also adequate legal frameworks that safeguard the integrity of principal – agent relations and assets from the impact of litigation. A one-stop regulatory authority, Labuan Financial Services Authority, and its business – friendly regulatory framework are constantly cited as top reasons to establish in Labuan.

The availability of skilled, English speaking staff at a low comparative cost, stable currency, complimented by a complete range of service providers and open banking law without direct exchange controls were other persuasive factors.

The basis of the Malaysian legal system is English Common Law, a legacy of British colonial history. Businesses in Labuan IBFC are governed by eight modern Acts.

Labuan IBFC’s tax system is simple and straightforward. In addition, investors can access to a large network of Malaysian double taxation agreements, one of Asia’s most extensive treaty networks spanning close to 80 countries.

The attractive Labuan tax system applies to Labuan entities carrying on a Labuan Business activity under the Labuan Business Activity Tax Act 1990 (“LBATA”).

Labuan Financial Services Authority or Labuan FSA, is a statutory body set up under provisions of the Labuan Financial Services Authority Act 1996, as a one stop supervisory and regulatory body for Labuan International Business and Financial Centre (Labuan IBFC)

Labuan FSA's key role is to license and regulate licensed entities operating within Labuan IBFC and to ensure all such companies remain in compliance with internal and international best standards adopted by the jurisdiction.

Why Choose Labuan, Malaysia

Today, many investors and entrepreneurs are choosing to set up their businesses overseas especially in jurisdictions like Labuan, Malaysia. The rationale behind this trend is to primarily facilitate entry into an international market and to benefit from tax friendly jurisdictions. Labuan, Malaysia is considered one of the best jurisdiction to establish and run a business, as it scores high on factors that matter to businesses.

Tax Benefits

Below are some of the key benefits of setting up a business in Labuan, Malaysia and will serve to provide you with the answers to the question “Why choose Labuan, Malaysia to set up a business?”. To learn about how to setup a company in Labuan, Malaysia, please Contact us.

Legislation

Type of Income

Tax Payable

1.1

Labuan Business Activity Tax Act 1990 (“LBATA”)

Non-trading activities
(Interest | investment returns including capital gains | dividends | royalty)

Dividend payments | Trust distributions

No Tax

Labuan trading activities

Corporate tax rate of 3% of audited net profits or a flat rate of MYR20,000 as opted every year

Payments to non-residents for interest | royalties | technical and management fees | rental payments for the use of movable property

No withholding tax

Gross employment income of a non-citizen working in a managerial capacity in a Labuan financial institution until the year of assessment 2020

50% tax exemption

Labuan allowances and housing allowances of Malaysian citizens working in a Labuan financial institution until the year of assessment 2020

50% tax exemption

Director fees received by a non-citizen director of a Labuan financial institution, until the year of assessment 2020

100% exemption

Statutory income from Qualifying Professional Services provided by services providers (Accountants, Lawyers, Secretarial, Liquidators and Auditors) to Labuan entities

65% of the statutory income

1.2

Under Income Tax Act 1967 (“ITA”)

Capital gains | foreign source income

Pay no tax

1.3

Other Tax Benefits

  • No Stamp duty
  • No indirect taxes such as (i.e. Sales Tax | Service Tax | GST | VAT | Custom Duty)
  • No tax estimation i.e. no CP204 | no CP205
Other Benefits
  1. Double Taxation Avoidance Treaties (DTA) with more than 70 Countries. Original copy available upon request
  2. Investment Protection Agreement (IGA) with more than 50 Countries. Protect your investment in the event that it is being nationalized
  3. No Exchange Control Regulations – Free Flow of Funds. Stop Tax Haven Abuse Act does not apply in Labuan, Malaysia
  4. Free Trade Agreements: 
    • ASEAN Free Trade Area (AFTA / ATIGA)
    • ASEAN-CHINA Free Trade Area (CAFTA / ACFTA)
    • ASEAN-KOREA Free Trade Area (KAFTA / AKFTA)
    • ASEAN-JAPAN Comprehensive Economic Partnership (JACEP / AJCEP)
    • ASEAN-INDIA Free Trade Area (AIFTA / IAFTA)
    • ASEAN-AUSTRALIA-NEW ZEALAND Free Trade Area (AANZFTA)
    • Malaysia-Pakistan Comprehensive Economic Partnership Agreement (MPCEPA)
    • Malaysia-Japan Economic Partnership Agreement (MJEPA)
    • Malaysia-New Zealand Free Trade Agreement (MNZFTA)
    • Malaysia-India Comprehensive Economic Partnership Agreement (MICEPA)
    • ASEAN-EU Free Trade Area (under negotiation)
    • ASEAN-US Free Trade Area (under negotiation)

    Typical Contents of FTA :

    • National Treatment & MFN Treatment

      National Treatment: Each Member State shall…accord immediately to investors and their investment…treatment no less favourable than that it accords to its own like investors and investments…, and

      Most Favoured Nation (MFN) Treatment: Each Member State shall accord immediately and unconditionally to investors and investments of another Member State, treatment no less favourable than it accords to investors and investment of any other Member State with respect to all measures affecting investment…

    • Fair and Equitable Treatment
      Guarantee of “fair and equitable treatment and full protection and security”. The “full protection and security” guarantee requires the host government “defend the investor or investment against others, for instance, rebel forces”. The “fair and equitable treatment” guarantee provides a type of international due process that protects against unacceptable conduct by the host government.
    • Compensation for Expropriation
    • Liberalization of Service Sector and Equity,
    • Cross Border Supply
    • Consumption Abroad
    • Commercial Presence
    • Movement of Natural Persons
  5. Mutual Recognition of Qualifications and Experience
  6. Labuan, as part of Malaysia, is a member country to the following International Intellectual Property Treaties:
  7. Paris Convention 1883 (01/01/89)
  8. WIPO Convention 1967 (01/01/89)
  9. BERNE Convention 1886 (01/10/90)
  10. TRIPS Agreement (01/01/96)
  11. Patent Co-operation Treaty 1970 (16/08/06)
  12. NICE Agreement 1957 (28/09/07)
  13. VIENNA Agreement 1973 (28/09/07)
  14. Appropriate degree of confidentiality
  15. No audit required except for the Licensed Entity, the Entity that opt to be taxed under ITA and the Entity that opt to pay 3% tax
  16. Tax Residency Certificate available for Labuan Entity and Individual
  17. Immigration regulations are liberalized for employees and directors
  18. Infrastructure - International Business Financial Centre (IBFC), Duty Free Status, Competitive Investment Cost, Low Operating Cost Environment, Strategic Location and Modern Infrastructure facilities (including medical, transport and telecommunications complete with a deep sea port), Professional support available for business development
  19. Full fledge banking i.e. Onshore and Offshore Banking | Opening of bank Accounts Nationwide, Singapore, Hong Kong, USA etc | Multiple Currencies Accounts with interest bearing | Fixed Deposit/Certificate of Deposit/Time Deposit (FD/CD/TD) | Current Account | Credit Card | ATM | Corporate Debit Card | Buy, deposit & withdraw Gold Bullion and other gold products | High security Internet Banking System | Letter of Credit and other trade facilities