Malaysian flag | Labuan Tax Benefits | Malaysian Company Benefits LABUAN TAX

Why Need A Labuan Company?

 




How To Setup Labuan Company?

 
1. Register a Labuan company 5 working days
2. Apply for Labuan license (if any) 5 - 6 weeks
3. Open a bank account 3 - 6 weeks
4. Setup substance in Labuan 4 - 6 weeks




Benefits of Labuan Company

 
Easy to get Labuan business licenses

  • Easier & faster to obtain Labuan entity licensing - In comparison to other jurisdictions
  • Forex broker, FX broker | Insurance broker | Re-insurance broker | Captive insurance
  • Fund manager | Fund administrator | Securities licensee | Labuan banking license
  • Labuan leasing of vessel, shipping, aviation | Labuan investment bank license
  • Also, can do Labuan business like investment holding of shares, securities, bonds, debts
100% Ownership + 100% Control

  • Foreigners or Malaysians can have 100% ownership in the Labuan company
  • 1 Director + 1 Shareholder + USD 1.00 Share capital + Labuan company substance
Stay in Malaysia & Work in Malaysia

  • Apply for Labuan work permit / dependent pass while working for a Labuan company
  • Good food. Good people. Good living conditions. Good working environment
  • Who could resist living in Malaysia, where quality meets affordability
Labuan Taxes are Easy

  • Labuan holding company is subject to 0% tax (zero corporate tax)
  • Labuan companies are subject to 3% corporate tax
  • Malaysia Double Taxation Agreement, DTA protects your income from being taxed twice




 
 
Labuan corporate tax: 0%, 3%
Personal tax - Labuan Dividend: 0%
Withholding tax / Capital gain tax: 0%
 
 




Labuan Tax Rates
 
Labuan Licensed Company

  • Eg, Labuan leasing, money broker, insurance broker, fund manager
  • Eg, Securities advisory, private fund, forex broker, commodities trading
  • Labuan licensed entity must operate with a Labuan substance :
  • Have Labuan office, 2 - 3 staff, spend RM 100,000 - 200,000 in Labuan
  • Accounts must be audited, by Labuan auditors
  • See more Labuan licensing types..

 
3% tax
Labuan Other-Trading Business

  • Administrative services, accounting services, legal services,
  • Backroom processing services, payroll, talent management services,
  • Agency services, insolvency related services, management services
  • Must have Labuan office + 2 Labuan staff
  • Minimum spending in Labuan : RM 50,000
  • Accounts must be audited, by Labuan auditors
  • See more Labuan other-trading businesses (Code 23)..

 
3% tax
Holding Company : Pure Equity Holding

  • Labuan investment holding - Hold shares of a subsidiary company
  • Receive dividend from a subsidiary company
  • Receive capital gains as Labuan income
  • Visit Labuan once a year to have central management and control
  • Minimum spending in Labuan : RM 20,000

 
0% tax
Holding : Non Pure Equity Holding

  • Labuan investment holding - Hold investment that has passive income
  • Eg, Shares, interests, bonds, debt instruments, securities
  • Must hire 1 Labuan staff
  • Minimum spending in Labuan : RM 20,000

 
0% tax
Other Conditions

  • Labuan company that failed Labuan substance's requirements

    Substance = Labuan office, full time staff, minimum spending in Labuan
  • Labuan company that is not listed within permitted activities

    Eg, Trader, manufacturer, IP intellectual property, etc
  • Labuan company that is not licensed by Labuan Authority

    Labuan company that is not within other-trading business (Code 23)

    Labuan company that is not a holding company

 
24% tax




How to Verify These Information?
 
Inland Revenue Board Malaysia | IRBM Income Tax Department of Malaysia




 
 
Labuan company formation / renewal

  • Included assistance to open bank account, internet banking
  • Holding company formation / company renewal = USD 2,200
  • Duration : 5 working days
USD 2,500
 
 




Our Services
 
Labuan Licensing Application

  • Labuan money broker, fund manager, private fund, banking
  • Shipping leasing, aircraft leasing, petroleum trading
  • Each licensing requirement is different
  • Duration : 30 working days
Ask for Quote
Bank Application

  • Free for 1st bank application
  • Open foreign currency account - USD, SGD, EUR, AUD, MYR
  • Minimum bank initial deposit : RM 50,000 (USD 12,500)
  • Included assistance to apply for internet banking
  • Duration : 5 - 6 weeks
USD 400
Labuan Work Permit - 2 Years

  • Must have Labuan office. Minimum USD 1.00 paid up capital
  • Monthly salary RM 10,000 + EPF pension + Socso security
  • Salary is subject to PCB monthly tax deduction
  • Compulsory to pay for 2 years Authority fees
  • Excluded immigration fee USD 350. Pay after visa approval
  • Duration : 6 - 8 weeks
USD 1,100
Labuan Dependent Pass - 2 Years

  • Bring along your immediate family members
  • Excluded immigration fee USD 350. Pay after visa approval
USD 550
Labuan Marketing Office, LMO

  • Excluded LFSA processing fee USD 100 - Labuan company
  • Excluded LFSA processing fee USD 350 - Licensed company
  • Excluded LFSA annual fee USD 2,500. Pay after approval
USD 400
Substance Arrangement

  • We support your company to maintain economic substance
  • Hire staff, payroll, EPF pension, SOCSO security, office rental
  • Accounting, bookkeeping, audit, anti-money laundering KYC
  • Internal audit, policy and procedures, compliance outsourcing
  • Will writing, private asset protection, succession planning
Ask for Quote




 
 
Who is Labuan Tax?
 
Trust Labuan Tax Inc

  • License No : LMT0058
  • Trust Labuan Tax Inc is a Labuan Trust Company that is licensed under Labuan Financial Services and Securities Act 2010 (LFSSA). Licensed by the Labuan Financial Services Authority (LFSA) since 2013 to carry on Labuan corporate services business.
  • To provide guidance on Labuan licensing, Labuan company incorporation, Labuan work permit, bookkeeping, accounting, Labuan economic substance requirements.
 
 
 



Labuan Office

 
 
Our Customer's Testimonies :
Nelson Tan - Xavier & Charles Advisory Inc
Customer testimony for labuan tax company from Singapore | Labuan tax's benefits
  • We are very pleased with Trust Labuan Tax Inc's corporate secretarial services
  • They make it so convenient for us (as foreigner) to incorporate business in Labuan
  • Most importantly they resolved the issue you have with Labuan's authority and bank
  • We are delighted with their professional services for our Labuan international company
  • Highly recommend Trust Labuan Tax Inc, if you require any Labuan company formation
See more testimonies
 


Contact Us
Contact name
Contact number
Email
Confirmed email








Frequently Asked Questions
FAQs about Labuan international company
What is a Labuan Company?
How to incorporate a Labuan Company?

Labuan Company Incorporation :
  • Fill in Labuan incorporation forms and send documents required to us
  • Remit payments

Checklist to incorporate a Labuan company :
  • If the applicant is an individual, please provide :
    Certified passport, certified proof of address, resume, reference letter issued by professionals
  • If the applicant is a company, please provide :
    Certified proof of incorporation, shareholding, directorship, and documents related to each individual as above
What is a Labuan holding company?

A Labuan Investment Holding Company (IHC) holds long terms investments.

One of the key reasons many Labuan business owners acquire overseas businesses, company stocks and even securities while enjoying ZERO tax. Long term stocks holding will also be zero tax on its capital gain.

  • Pure Equity Holding
    • Receive income as dividends or capital gains, by holding shares of a subsidiary
    • Spend RM 20,000 + Visit Labuan once a year = Zero Labuan company tax

  • Non-Pure Equity Holding
    • Receive passive income from long term investments
    • Eg, Shares, interests, royalties, bonds, debt instruments, securities
    • Spend RM 20,000 in Labuan + Hire 1 staff in Labuan = Zero Labuan company tax
What is "Code 23" Labuan business?
    Code 23 is a Labuan business category ("Also known as Labuan other-trading")
    Labuan entity that carries on any one or more of the following Labuan business activities :

  • Administrative services
    • Administrative services mean Labuan services pertaining to employee management, payroll management, property management, human resource management, financial planning, contract or subcontract management, facilities management or proposal management.

  • Accounting services
    • Accounting services mean Labuan services pertaining to recording, analysing, summarizing or classifying financial, commercial and business transactions and information of a person or business.

  • Legal services
    • Legal services mean Labuan business activities related to :
      (a) conveyancing services;
      (b) legal advisory services;
      (c) litigation or legal representation services in any proceedings before any court, tribunal or other authority; or
      (d) legal dispute resolution services including alternative dispute resolution.

  • Backroom processing services
    • Backroom processing services are Labuan services relating to settlements of receivables and payables, clearance, record maintenance, regulatory compliance or information technology (IT) related services which are usually performed by administration and support personnel who do not deal directly with client.

  • Payroll services
    • Payroll services mean Labuan services relating to :
      (a) processing, calculation, payment and deduction of remuneration, benefits, tax and statutory payment; or
      (b) issuance of payslip and tax statement.

  • Talent Management Services
    • Talent management services mean the provision of human resource services to attract, onboard, develop, motivate, and retain employees.

  • Agency services
    • Agency services mean the provision of specific services on behalf of another group, business, or person pursuant to an agency agreement between the agent and its client.

  • Insolvency related services
    • Insolvency related service mean Labuan services related to administering company liquidations or winding up, or personal bankruptcy.

  • Management services
    • Management services cover the organization and coordination of activities of a business in order to provide services to the clients and usually consist of organizing, supervising, monitoring, planning, controlling and directing business's resources such as human, financial and technology.

      For avoidance of doubt, Labuan management services exclude company management as defined in section 129 of the Labuan Financial Services and Securities Act 2010


    Code 23 is exclusive of Labuan activities that are similar to services pertaining to Malaysian intellectual property (IP), trader, wholesaler.

Do we need office and staff in Labuan?
Can I be the only director and shareholder?
  • Yes. Both Malaysians and foreigners can setup Labuan company
  • Only 1 director
  • Only 1 shareholder
  • Only USD 1.00 paid up capital
  • Nominee director is not needed
Dividend - What tax rate for Malaysian dividend?
  • Dividend - Zero income tax, if paid by the Labuan company to Labuan shareholder
  • Dividend - Zero withholding tax, if paid by Labuan company to Labuan shareholder
  • Salary - Zero withholding tax, if paid by Labuan company to Malaysian resident
Labuan capital gains - What is the tax rate?
  • Capital gains of Labuan company is subject to zero tax (0% tax) - Eg, Disposal of shares

What's the tax deductible expenditure paid to Labuan company, for Sdn Bhd / resident?
Note : Sdn Bhd = Malaysian resident local company
Interest :
  • Interest is 25% non-deductible expenses for Sdn Bhd / Residents
  • Including all payments in connection with financing in respect of commission, facility fee and advance fee
  • 75% is tax-deductible
25%
Leasee's Rental :
  • Rental is 25% non-deductible expenses for Sdn Bhd / Residents
  • 75% is tax-deductible
  • Labuan Leasing
    Applicable to leasing rental income for a Labuan leasing business
  • What's a Labuan leasing business?
25%
Other payments :
  • Other payments are 97% non-deductible expenses for Sdn Bhd / Residents
  • 3% is tax-deductible
97%


Special Exemption (Non-Deductible expenses)
Payments to LITC / GIFT :
  • LITC / GIFT - Labuan company that conducts Labuan commodity trading business. What's a Labuan LITC GIFT business?
  • Malaysian Resident that pays to LITC GIFT is exempted from non-deductible expenses
  • Exempted until 31 Dec 2025
Zero

Labuan leasing - What's the withholding tax?
  • Dividend / interest transferred :
    • From Labuan company to Sdn Bhd / Malaysian individual
    • If operated from Labuan
    • Zero withholding tax
  • Dividend / interest transferred :
    • From Labuan company to other countries / jurisdictions
    • If operated from Labuan
    • Zero withholding tax
  • Rental / leased fee transferred :
    • From Sdn Bhd to Labuan company
    • Zero withholding tax

Note : Sdn Bhd = Malaysian resident local company

What's a Labuan leasing business?

Can we run online business from Labuan?
  • Yes. Labuan company is suitable for online business

    Digital marketing agency, sales commissions, software management that is not related to intellectual property, system integration management,

    Telecommunication management, website management, clickbank agency, ads agency, education portal management, infomercial agency, amazon referral agency, affiliate agency, lifestyle promotor agency,

    Business management, wedding management, product sourcing agency, sales and marketing agent, coaching management, etc
Can i do Fintech business in Labuan?
  • Labuan company must first be approved by the Labuan Authority to conduct Labuan Innovative Financial Services (Labuan IFS) before operating any of these activities. Also, the approval normally comes in a bundle with the Labuan licensing such as Money Broker Licensee.

    Labuan IFS allows you to do Labuan business related to fintech, insurtech, blockchain, bitcoin, cryptocurrency
How to live in Malaysia using a Labuan company?
Do you know anything about MM2H visa?
  • MM2H application - Below 50 years old
  • Liquid asset worth RM 500,000, or more
  • Offshore income RM 10,000 / month, or more
  • Fixed deposit in Malaysian bank RM 300,000
  • Buy a Malaysian property RM 1 million (fully paid) to reduce fixed deposit to RM 150,000

  • MM2H application - 50 years old or above
  • Liquid asset worth RM 350,000, or more
  • Offshore income / pension RM 10,000 / month, or more
  • Fixed deposit in Malaysian bank RM 150,000
  • Buy a Malaysian property RM 1 million (fully paid) to reduce fixed deposit to RM 100,000
Malaysian My Second Home visa - MM2H is a 10 years resident visa. Renewable
Subject to changes from time to time


Who is eligible for Labuan company?

Eligible for Labuan company
  • Malaysian
  • Foreigner
  • Dealing with companies in other countries
  • Dealing with another Labuan company
  • Dealing in foreign currency
  • Elect to pay tax under Malaysian local tax (ITA Act)
Not eligible for Labuan company
  • Dealing with Malaysian resident
  • Dealing in Malaysian currency, Ringgit (MYR)
  • Dealing with very high risk business
  • Sanctioned / blacklisted / high risk countries
  • Apply for work permit without business purpose
  • Holding investment - If annual expenditure in Labuan is below RM 20,000
What if I still have more questions?




Labuan licensing
What business licenses are available in Labuan?
Labuan leasing
  • Labuan leasing is a business of renting out assets like machinery / vessels related to aviation, shipping such as aircrafts, ships, more. Charter on a bare boat basis
  • Minimum Labuan staff : 2 staff for first 10 companies. Add 1 staff for next 10 companies
  • Minimum spending in Labuan : RM 100,000 per company
Labuan money broker
  • Labuan money broker is a forex broking business between buyers and sellers
  • Minimum Labuan staff : 2 staff
  • Minimum spending in Labuan : RM 100,000
Labuan insurance broker
  • Labuan insurance broker is a person who arranges insurance business activities on behalf of policy owners. And, arrange reinsurance business on behalf of insurer
  • Minimum Labuan staff : 2 staff
  • Minimum spending in Labuan : RM 100,000
Labuan insurance company / reinsurance company
  • Labuan insurance issuer is in the business of providing general insurance / life insurance. Reinsurer provides insurance services to insurance issuer / another reinsurer
  • Minimum Labuan staff : 3 staff
  • Minimum spending in Labuan : RM 200,000
Labuan fund manager
  • Labuan fund manager is a person who provides investment advice and securities services
  • Minimum Labuan staff : 2 staff
  • Minimum spending in Labuan : RM 100,000
Labuan securities licensee
  • Labuan securities licensee is a person who provides advice for securities
  • Minimum Labuan staff : 2 staff
  • Minimum spending in Labuan : RM 100,000
.
Labuan commodity trading - LITC / GIFT
  • LITC - Labuan International Commodity Trading is for traders that use Malaysia as their base. (GIFT - Global Incentives for Trading)
  • LITC Product - Petroleum-related products, LNG liquefied natural gas, minerals, agriculture products, refined raw materials, chemicals, base minerals, or coal

  • Minimum staff in Malaysia : 3 staff (including staff in Labuan)
  • Minimum staff in Labuan : 2 staff (for first 5 companies). Add 1 staff for next 5 companies
  • Minimum spending in Malaysia : RM 3 millions / year (include Labuan spending)
  • Minimum spending in Labuan : RM 100,000 / company

Contact Us



Our Customer's Testimonies
Vanni Torelli - Gluon Inc Customer testimony for labuan tax company from Italy
I learned about LabuanTax.com from a common friend. Being from country A, living in country B and working for clients in country C, I knew I needed a "one-stop shop" business arrangement that could work for me, give me the least amount of management burden and be sustainable in the long run. Labuan Tax treats me the way you would expect from a friend, not an accountant. He took me through all the necessary steps to register a Labuan business company and set up the required banking and accounting processes with minimal supervision and hassle from me.

I can safely say that Gary and Ms Chai have provided me with timely, impeccable service, even at short notice and when urgent action was needed. Everything they said or did showed genuine care for their clients, no matter how small their business footprint or revenues. Perhaps most importantly, they have always been one messenger chat away for any query or doubt I had.

I continue to view Labuan Tax as an effective business ally and friends, and I am certain, so does everybody who has been using or will use their services. There is no doubt that Labuan is one of the world's best offshore business platforms for SMEs. There is also no doubt that Labuan Tax is the best gateway to create and help run it.

Garrie Cox - TerraTorque Inc Customer testimony for labuan tax company from America
Trust Labuan Tax Inc helped us set up a Labuan company several years ago. They are very professional and thorough and made the process quite easy to understand. He provided us with guidance every step of the way to ensure that we got our Labuan company up and running quickly and efficiently.

In the years following establishment of our business, Mr. Wong has kept us informed of all our options and all updates regarding Labuan companies. They have assisted us in our yearly company matters. Their personnel are knowledgeable, honest and straightforward and have always operated with our best interests in mind.

They have made operating a Labuan company quite easy, and I am confident you will be very pleased should you elect to use their services. I would not hesitate to recommend Trust Labuan Tax Inc and their team to anyone considering setting up a Labuan company.

Chee Hoong - Velofinity Inc Customer testimony for labuan tax company from Malaysia
They are very dedicated and professional consultant with deep off-shore company formation knowledge in a variety of aspects like finance, company administration, penalty and etc. They always went the extra mile to bring value to both their client's business and company administration.

Their relentless customer focus and solution-oriented attitude, complimented by the friendly and easy-going personalities have always made it a true pleasure for me to get consultation and services from. I can recommend Labuan Tax very highly.

Alex - Silverberry Inc Customer testimony for labuan tax company from Australia
It is with great pleasure to write a testimony for Trust Labuan Tax Inc. They provided corporate secretarial services for my Labuan company in Malaysia

Over the years, I have known them to be an extremely dedicated, efficient and trustworthy persons. They have good and serious attitude towards their works, and they treat all his clients with great respect and professionalism.

I am certain that you will find them to be a worthy asset to have in your company should you engage their corporate secretarial services. For any information that you may need regarding this recommendation, please do not hesitate to contact me.










Definitions
Labuan trust company : Trust Labuan Tax Inc is a licensed trust company in Labuan to provide company secretarial services from company formation, bank account opening, work permit application, and Labuan licensing application
Labuan company : A company incorporated at Labuan international business financial center, Labuan IBFC. Considered non resident in Malaysia
Labuan : A low tax jurisdiction located in Malaysia, either subject to zero tax or 3% tax
Withholding tax : A tax rate that is withheld during fund transfer out of Labuan. Withholding tax rate is usually lower, if there is a double taxation agreement signed between Malaysia and intended countries
Paid up capital : The amount of share capital fully paid up into the Labuan company
Source of income : Jurisdiction where income is mainly earned from. Eg, Foreign income source (overseas) / domestic income source (Malaysia)
Management and control : Jurisdiction where core business activities are mainly performed and decisions are made
Labuan non trading activities : Labuan non trading activity consists of pure equity holding, and non pure equity holding
Non trading - Pure equity holding : Labuan pure equity holds the shares of a subsidiary company
Non trading - Non pure equity holding : Labuan non-pure equity holds long term investments. Eg, shares, securities, stocks, bonds, debts
Labuan business activities : Labuan company that conducts licensed business activities, or activities that are permitted under Labuan Companies Act 1990 (LCA). And subject to Labuan Business Activity Tax Act 1990 (LBATA)
Holding company : A Labuan company that buys (holds) shares of another company (subsidiary), or holds long term investments that generate passive income. Eg, shares, securities, stocks, bonds, debts
Audit in Labuan : Labuan company must be audited (and must appoint an auditor), except for non-trading activities conducted
Sdn Bhd : Sendirian Berhad, Private Limited in Malaysia - A Malaysian local company
Jurisdiction : Jurisdiction here refers to Labuan, Malaysia
Offshore : Offshore company here refers to company formation in countries like Singapore, Hong Kong, UK, BVI, Cayman, Seychelles
Malaysian resident : Malaysian citizen, permanent resident or foreigners that stays more than 183 days in Malaysia
Foreigner : Non Malaysian resident that stays less than 183 days in Malaysia
Work permit : A legal permit that allows foreigners to work and reside in Malaysia. Sometimes also known as Employment Pass / Expatriate Work Pass
Dependent visa : Visa for work permit holder's spouse, children or parents to stay in Malaysia
Labuan IBFC : Labuan International Business and Financial Centre. A marketing arm that promotes Labuan's benefits
LBATA 1990 : Labuan Business Activity Tax Act 1990 - Labuan corporate tax (3% tax if substance are fulfilled, 24% tax if substance are not fulfilled)
ITA Act : Income Tax Act 1967 - 24% corporate tax, if source of income is derived from Malaysia
DTA / DTAs : Double Taxation Agreement is an agreement between two countries seeking to avoid double taxation
LCA : Labuan Companies Act 1990 (Act 441) - The Act that governs Labuan companies and its business activities
OECD : Organisation for Economic Co-operation and Development - International organisation that consists of members from several countries




 
 
Company Registration
Labuan Company Guides

Disclaimers :
1. Content posted on the website is not intended for tax advice or financial advice
2. We make no claim of its accuracy
3. Use the content posted at your own risk


Trust Labuan Tax Inc.
Unit B, Lot 49, First Floor, Block F, Lazenda Warehouse 3, Jalan Ranca-Ranca, Labuan

LabuanTax.com © 2022