LABUAN TAX

Why Need A Labuan Company?
 
  • 3% Labuan tax
  • Easy to get Labuan licensing - 100% ownership
  • Easy to do Labuan operation - 100% ownership
  • Easy to stay and work from Malaysia




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




Benefits of Labuan Company
 
100% Ownership + 100% Control

  • Foreigner can have 100% ownership of the Labuan company incorporated
  • 1 Director + 1 Shareholder + Share capital USD 1.00 + Labuan substance
Easy to get Labuan licensing

  • Easier & faster licensing in Labuan - In comparison to other international jurisdictions
  • Labuan leasing of vessel, shipping, aviation | Forex broker | Insurance, re-insurance
  • Commodities trading, petroleum, minerals, coal, agriculture, chemicals
  • Labuan banking license | Fund management | Private fund | Securities licensee
  • Also, you can do any business, that is not related to Labuan licensing as well
Stay in Malaysia & Work in Malaysia

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

  • Labuan holding company is subject to 0% tax (zero tax)
  • Labuan professional services / licensed company is subject to 3% tax
  • Malaysia Double Taxation Agreement, DTA protects your income from being taxed twice




 
 
Labuan company tax: 0%, 3%
Personal tax - 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 offer, private fund, forex broker, petroleum trading, more
  • Compulsory to operate with a Labuan license
  • Must have office, 2 - 3 staff, spend RM 100,000 - 200,000 in Labuan
  • Accounts must be audited
  • See more Labuan license types here

 
3% tax
Professional Services "Other Trading"

  • Business that are related to administrative, accounting, legal services
  • Including backroom processing, payroll services, talent management,
  • 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

 
3% tax
Holding Company : Pure Equity Holding

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

 
0% tax
Holding : Non Pure Equity Holding

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

 
0% tax
Non Classified Business

  • Labuan company that failed to fulfil Labuan substance, or
  • Labuan company that is not licensed by Labuan Authority, or
  • Labuan company that is not a holding company, or
  • Labuan company that is not a service provider listed in "other-trading"
  • Eg, Trader, manufacturer, wholesaler, etc
  • Labuan substance = Office, full time staff, minimum spending in Labuan

 
24% tax




How to Verify These Information?
 
Inland Revenue Board Malaysia, IRBM
Labuan Financial Services Authority, Labuan FSA / LFSA
  • Labuan Financial Services Authority, Labuan FSA is the regulator of Labuan company
  • http://labuanibfc.com




 
 
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

  • 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 : 3 - 6 weeks
USD 500
Labuan Work Permit - 2 Years

  • RM 250,000 paid up capital is not required from 2019
  • Must have Labuan office. Minimum USD 1.00 paid up capital
  • Monthly salary RM 10,000 + EPF Pension + Socso security
  • Compulsory to pay for 2 years incorporation / company renewal
  • 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




 
 
Who is Labuan Tax?
 
Trust Labuan Tax Inc

  • License No : LMT0058
  • Trust Labuan Tax Inc is a Labuan licensed trust company
  • Approved by the Labuan FSA from 2013 to carry on corporate services business
  • Provide guidance on license application, work permit, bookkeeping, accounting
 
 
 



Labuan Office

 
 
Our Customer Feedback :
Nelson Tan - Xavier & Charles Advisory Inc
Customer testimony for labuan tax company from Singapore
  • 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
  • Highly recommend Trust Labuan Tax Inc, if you require any company registration at Labuan
See more testimonies
 


Contact Us
Contact name
Contact number
Email
Confirmed email








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

Labuan Company Incorporation :
  • Fill in forms and send documents to us
  • Remit payments
Checklist :
  • If individual - Certified passport, certified proof of address, resume, reference letter issued by professionals
  • If corporate - Certified proof of incorporation, shareholding, directorship, license approval (if any), documents related to each individual as above
What is a Labuan holding company?

Labuan holding company only holds investment that has passive income
  • Pure equity holding
    • Receive income from dividends and capital gains by holding shares of subsidiary
    • Spend RM 20,000 + Have central management in Labuan = Zero Labuan tax

  • Non pure equity holding
    • Only receive passive income that is not part of pure equity holding
    • Eg, interest, rents, royalties, bonds, debt instruments, properties, securities, etc
    • Spend RM 20,000 in Labuan + Hire 1 staff in Labuan = Zero Labuan tax
What is "other-trading" business?
  • Labuan other-trading is a business category that carries out administrative, accounting, and legal services
  • Including backroom processing, payroll services, talent management, agency services, insolvency related services, and management services
  • Eg, advertising agency, commission agent
Do we need office and staff in Labuan?
Can I be the only director and shareholder?
  • Both foreigner and Malaysian citizen can setup Labuan company
  • Only 1 director
  • Only 1 shareholder
  • Only USD 1.00 paid up capital
  • Nominee director is not needed
Dividend - What is the tax rate for my dividend?
  • Dividend - Zero income tax, if paid by the Labuan company to the shareholder
  • Dividend - Zero withholding tax, if paid by Labuan company to the shareholder
  • Salary - Zero withholding tax, if paid by Labuan company to Malaysian resident
Capital gains - What would be the tax rate?
  • Capital gains of Labuan company is subject to zero tax (0% tax) - Eg, Disposal of shares
Labuan leasing - What's the tax deductible expenditure for Sdn Bhd?

Payments transferred by Sdn Bhd to Labuan company :
  • Interest :
  • 67% tax deductible. 33% not deductible expenses for Sdn Bhd

  • Leasee's Rental :
  • 67% tax deductible. 33% not deductible expenses for Sdn Bhd

  • Other expenses :
  • 3% tax deductible. 97% not deductible expenses for Sdn Bhd

Note : Sdn Bhd = Malaysian local company
What's a Labuan leasing business?

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 local company
What's a Labuan leasing business?

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

    eCommerce, drop shipping, digital marketing, sales consultancy, online coaching, software development, system integration, IT related business, engineering,

    VOIP telecommunication, web designer, clickbank, online ads, online education, infomercial ads, amazon sales, lifestyle business, membership subscription, consultancy,

    business management, wedding designer, commodities trading, traders, product sourcing, sales and marketing business, coaching, 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.

    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


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
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
  • Other-Trading business - Annual profit below USD 100,000 is less suitable
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 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 private fund
  • Labuan private fund is a mutual fund whose securities are held by investors
Labuan commodity trading
  • Labuan International Commodity Trading (LITC) is for traders of physical products and related derivatives, that primarily uses Malaysia as their base
  • Eg, Petroleum related, liquefied natural gas, LNG, minerals, agriculture, refined raw materials, chemicals, base minerals, coal

  • Minimum Labuan staff : 2 staff for first 5 companies. Add 1 staff for next 5 companies
  • Minimum spending in Malaysia : RM 3 millions per company (include Labuan spending)
  • Minimum spending in Labuan : RM 100,000 per 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. Considered non resident in Malaysia
Labuan : A 3% low tax jurisdiction located in Malaysia that provides corporate secretarial services
Withholding tax : A tax rate that is withheld during fund transfer out of Labuan. Withholding tax 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 is consisted of pure equity holding, and non pure equity holding
Non trading - Pure equity holding : Labuan pure equity is holding the shares of a subsidiary company
Non trading - Non pure equity holding : Labuan non-pure equity is holding investments, other than shares of a subsidiary company. Eg, securities, stocks, bonds, debts
Labuan trading : Labuan trading company consists of Labuan licensed company, regular trading, and "administrative, accounting, legal services"
Holding company : A Labuan company that buys (holds) shares of another company (subsidiary), or holds any other passive investment types
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 at 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 called Employment Pass / Expatriate Work Permit
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 : Labuan Business Activity Tax Act 1990 - Labuan corporate tax : 3% of audited profit, if substance is fulfilled
ITA : 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




 
 
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