Why Need A Labuan Company?
 
A.Maximum Tax : RM 20K ( USD 6,700 )
 Save tax. You will not be audited too
 
B.Easier To Get Work Permit and Visa
 Help foreigners stay in Malaysia. Easy to get Dependent Visa too
 Not for high risk countries + Must have legitimate business




1. How To Achieve That?

a. You setup a Labuan Company ( 3 business days )

b. You open a Bank Account ( 2 - 3 weeks )
    You will do business and save tax

c. You apply for a Work Permit & Dependent Visa ( 4 - 6 weeks )
    You will stay in Malaysia, optional

d. Also, it depends on who your Labuan Company does business with. See examples below :

Examples
PASSED 1. Business Nature : Non Trading

2. Investment Holding Company

Case A
PASSED 1. Do business with
Non Malaysian company / foreign company

2. Do business in
Non Malaysian currency, Ringgit (RM)

Case B
PASSED 1. Do business with
another Labuan Company

2. Do business in
non Malaysian currency, Ringgit (RM)

Case C
PASSED Do business with
Malaysian and non Malaysian and Labuan Company

1. Transactions (with Non Malaysians / Labuan Company)
pay max RM 20,000 tax

2. Transactions (with Malaysians)
pay 26% Malaysian domestic tax

Case D
FAILED 1. Do business 100% with
Malaysians (Company / Individuals), or

2. Deal with clients in
Malaysian currency, Ringgit (RM), or

3. Apply for Work Permit / Dependent Pass without a business purpose

Case E


2. Who Is Eligible?

Foreigner? Yes
Malaysian? Yes
Anyone? Yes




3. Do You Know You Pay Tax Twice?

1. Corporate Tax - Your company pay corporate tax

2. Personal Income Tax - You pay income tax from salary derived from your company



Benefits

1. 100% Ownership and Control
    Foreigners will totally own the Malaysian business

2. Minimum Requirement
    1 same director + 1 same shareholder

3. Business Nature : Non Trading
    Your Labuan Company will pay zero corporate tax

4. Director Fee
    Foreigners will declare income as director fee / dividend and pay zero income tax

5. Labuan Legislation
    The law is stable and will remain unchanged for many years

6. Double Taxation Agreements, DTAs
    You are protected in avoidance of double taxation

7. Stay in Malaysia + Do Business
    Cheaper method for foreigners to stay in Malaysia.
    See Comparison : What is the cheapest method for foreigners to stay in Malaysia + Do business?




4. Diagram Summary
        Labuan Company's Tax Structure





5. How Do I Verify These Information?
Check it with Malaysian Regulatory Body

Labuan Financial Services Authority,
Labuan FSA

Regulate / Register Labuan Company
http://labuanfsa.gov.my
Inland Revenue Board of Malaysia,
IRB

Regulate tax system in Malaysia
http://www.hasil.gov.my/index.php
Malaysia My Second Home Program,
MM2H

Promote foreigners to stay in Malaysia
http://www.mm2h.gov.my




6. Schedule of Fees

Labuan Company
1. Business Nature ( Trading activities ) : Max tax is RM 20,000 ( est, USD 6700 )
2. Business Nature ( Non Trading activities ) : Max tax is zero ( est, USD 0.00 )
Non trading : Investment and holding companies
USD 3,000


Additional Services

Setup Bank Account
1. Bank Account : Foreign Currency. Eg, USD / EURO
2. Bank Account : Malaysian Ringgit, RM ( for admin expenses )
Note : Require deposits for each bank account

Minimum Bank Deposit :
USD Account : USD 5,000
MYR Account : MYR 10,000
GBP Account : GBP 3,000
AUD Account : AUD 7,000
EURO Account : EURO 4,000
Note : There is no minimum maintenance required
USD 600
Apply for Internet Banking
Login to view bank statements / transaction history / balance online
USD 100
Apply for Work Permit
1. Become Malaysian tax resident - Stay for more than 183 days
2. Easier to get a work permit, visa, dependent visa in Malaysia
3. Conduct oversea business from Malaysia - Go in and out freely
USD 1,100
Apply for Dependent Pass Visa
1. Bring along your immediate family members
2. Go in and out of Malaysia freely
USD 550


Examples of Fees
Note : Annual renewal will be cheaper than below

Purpose : Do Business & Save Tax
1. Labuan CompanyUSD 3,000
2. Bank AccountUSD 600
3. Internet BankingUSD 100
TOTAL :USD 3,700
+ Purpose : If you wanted to stay in Malaysia
4. Work Permit, VisaUSD 1,100
5. Immigration FeeUSD 450
TOTAL :USD 5,250


7. Contact Us

LabuanTax.com

Contact Person : Gary Wong

Contact Number : +6 016 821 8171

Email : gary@labuantax.com

How To Start?

1. Fill in the form below

2. We will incorporate your Labuan Company

3. Make payment to our Trust Company directly

4. Get your Labuan Company in 3 business days



8. Enquiry Form

Contact Name :
Contact No :
Email :
Confirmed Email :
How can we help you?


It's free


Someone Asked Questions

Malaysia Flag Malaysia, Charles

1. Can we have a Labuan company to charge management fee to a Papua New Guinea company? Any special requirement?
Yes, you can. No problem receiving income out of Malaysia

2. Do we need to have office, manpower, etc at Labuan?
Not neccesary

3. Is there any tax imposed on dividends to shareholder?
The shareholder will pay no personal income tax on dividends


United Kingdom Flag United Kingdom, David

1. Can foreigners purchase properties in Malaysia?
Yes, foreigners can buy, rent, use the property in Malaysia.
a. West Malaysia ( Minimum Purchase Value ) : RM 1 Million, 2014
b. East Malaysia ( Minimum Purchase Value ) : RM 1 Million, 2014



Australia Flag Australia, Simon

We run a software company and manage our clients around the globe. Currently, we are considering the option of a Labuan Company. However, we will appreciate your assistance to our queries.

1. Can we live in Malaysia?
Yes, you can. You will apply for a work permit / dependence pass

Appendix I : Foreigners Stays and Works From Malaysia
Appendix II : Malaysia My Second Home Program ( Requirement : Show Proof of Wealth )

2. Is my foreign income taxable? How much tax should we expect?
Yes, your foreign income is taxable.
Non trading business is zero.
Maximum corporate tax for trading business is RM 20,000. Anything lower than that is 3% tax and must be audited.


3. How long does it take for the whole thing?
a. Labuan Company - 3 working days
b. Bank Account - 2 to 3 weeks after the setup of the Labuan Company
c. Expatriate Work Permit, Visa - 4 to 6 weeks after the setup of the Labuan Company
Note : You must satisfy the documents required to achieve the above. Easy







Appendix I
Foreigners To Stay In Malaysia + Do Business


  Labuan Company Local Company,
Sdn Bhd
Malaysia My
Second Home
Duration
How long can a foreigner stay in Malaysia?
 
As long as the existence of your Labuan Company Renewable Maximum 10 years
Renewable
Procedure
How to achieve that?
1. Setup a Labuan Company

2. Apply for Expatriate Work Permit. ( Easy procedure )
 
1. Setup a Local Company

2. Apply for a Work Permit
Show evidence of wealth.
See Appendix II : Malaysia My Second Home Program ( Requirement : Show Proof of Wealth )

Minimum Requirement 1. One same Director

2. One same Shareholder

3. Foreigner has 100% ownership of the company

4. No audit for non-trading business

or, opt for RM 20K tax remittance for trading business (will not be audited)
1. At least 2 Directors

2. At least 2 Shareholders

3. Paid up capital RM 500,000

4. Must appoint a Malaysian Auditor

 
Show Evidence of Wealth :

1. Liquid Asset worth at least RM 350K

2. Offshore month income at least RM 10K, and

2. Offshore month income at least RM 10K, and

3. Fixed Deposit with Malaysian bank at least RM 150K
Dependence
What about your spouse, son and or daughter?
Apply for Dependent Visa Apply for Dependent Visa Apply for Dependent Visa
Document Requirement Easy Many documents required, especially for accounting and tax purposes
 
A few documents
+ Medical Report
+ Medical Insurance
Pricing Labuan Company
Bank Account
Work Permit, Visa
USD 5,000
 
Company Formation alone
RM 2,000, and above
RM 450K and more
est, USD 150,000
Do Business Allowed
 
Allowed Not Allowed
Recommendation
What is your opinion?
Best . Cheapest - -


Appendix II
Malaysia My Second Home Program

Application Requirement : Show Proof of Wealth

Age : Below 50 years old

a. Liquid Asset worth RM 500,000, or more
b. Offshore Income RM 10,000 / mth, or more
c. Fixed Deposit with Malaysian bank RM 300,000 (Min maintenance : RM 150,000)
d. Or, buy a Malaysian property RM 1 million ( Fully Paid ) to reduce Fixed Deposit to RM 150,000

Age : 50 years old and above

a. Liquid asset worth RM 350,000, or more
b. Offshore income / pension RM 10,000 / mth, or more
c. Fixed deposit with Malaysian bank RM 150,000 (Min maintenance : RM 100,000)
d. Or, buy a Malaysian property RM 1 million ( Fully Paid ) to reduce Fixed Deposit to RM 100,000





DEFINITIONS

Labuan : A low tax jurisdiction located in Malaysia - Beautiful island ( See : Labuan Tourism )
MYR / RM : Malaysian Ringgit ( Malaysia Currency )
USD : United States Dollar
Currency Conversion : USD 1.00 = RM 3.40 ( Accurate Conversion : Google Currency Converter )
Tax : Refer as Malaysian tax. Regulated by Inland Revenue Board of Malaysia, IRB
Withholding Tax : Refer as tax withheld during fund transfer out of Malaysia. Regulated by Inland Revenue Board of Malaysia, IRB
Paid Up Capital : The actual amount of capital contributed / paid to the company
Source of Income : Where the income / money comes from. Eg, Which countries : Foreign or domestic income source
Management and Control : Where the business is managed / controlled from. Eg, Which nation
Labuan Company : A Malaysian Tax Resident - Considered a non domestic company.
Non Trading Activities : Consist of Labuan Company that is running business as Investment Company / Holding Company
Trading Activities : Consist of Labuan Company that is running any business, apart from non trading activities
Trust Company : A company that assists to incorporate a Labuan Company. It is mandatory to use a trust company
Holding Company : A company that buys shares of another company
Investment Company : A company that invests on behalf of its shareholders
Sdn Bhd : Sendirian Berhad - Private Limited Company in Malaysia
Jurisdiction : Refer as Labuan jurisdiction located in Malaysia
Offshore / Oversea : Refer as non Malaysian jurisdiction
Malaysian Resident : Malaysian citizen, permanent resident or foreigners - Stays more than 183 days in Malaysia
Foreigner : Refer as non Malaysian resident - Staying less than 183 days in Malaysia
Dependent Visa : Visa for foreigner's spouse and or children to stay in Malaysia
Work Permit : A legal permit that allows foreigners to be employed in Malaysia. Or, called Employment Pass / Expatriate Work Permit
Labuan FSA : Labuan Financial Services Authority - Regulate / Register business of Labuan Company
Labuan IBFC : Labuan International Business and Financial Centre - A marketing body to sell Labuan's benefits
MM2H : Malaysia My Second Home Program - Regulated by Ministry of Tourism Malaysia
IRB : Inland Revenue Board of Malaysia - Regulate Malaysia and Labuan's tax system
LBATA : Labuan Business Activity Tax Act 1990 (Act 445) - Max corporate tax : RM 20,000 for Labuan Company
ITA : Income Tax Act 1967 - Max tax : 25% for source of income from Malaysia only
DTA / DTAs : Double Taxation Agreement is an agreement between two countries seeking to avoid double taxation
DTA List : Malaysia / Labuan has DTAs with 70 countries ( Accurate listing : Malaysia DTAs )
LCA : Labuan Companies Act 1990 (Act 441) - The Act that governs Labuan Companies
LTA : Labuan Trusts Act 1996 (Act 554) - The Act that governs Labuan Trusts
OECD : Organisation for Economic Co-operation and Development - International organisation consists of members from a few countries





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1. Use the materials in this site at your own risk.

2. We make no claim on its accuracy

3. We accept no liability of any form from the use of this material

4. Hey, remember to quote LabuanTax.com for the use of any part of this material.
    This is basic courtesy :-)




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Email : gary@labuantax.com / Tel : +6 016 821 8171