1-1. About Labuan
Labuan is one of Malaysia's federal territories, an island floating in the South China Sea offshore of Sabah, east Malaysia. The area is about 85 square kilometers, it takes about 1 hour by car, it is the size can make one lap.
Labuan port was proclaimed a free port since 1956 and the entire island is designated as a duty free zone.
In addition, because Labuan is in a very important position from a defensive point of view despite being a very small island, Brunei and British rule, and the history governed by the Japanese Army during the wartime and always dominated by other countries.
Labuan has belonged to Sabah state after Malaysia independence, then became Federal Territory in 1984, and became a duty-free port in 1990, and a lot of visitors are coming from neighboring countries such as Brunei or Singapore today.
Labuan belongs to East Malaysia due to geopolitics, on the other hand, Labuan belongs to West Malaysia due to administration since Labuan was designated as Federal Territory of the Malaysian government since 1984.
Due to the existence of this small island, Malaysia’s “geopolitical east-west boundary line” and “administrative east-west boundary line” are different, here is a very interesting place.
Labuan belongs to East Malaysia in geopolitical terms and takes approximately 2 hours and 20 minutes by airplane from the capital Kuala Lumpur. In addition, it is possible to go from Kota Kinabalu in East Malaysia in about 30minites by airplane.
1-2. About Labuan Offshore Financial Centre
Labuan was founded in 1990 as the International Offshore Financial Centre ("IOFC") and the name has been changed to International Business Finance Center ("IBFC") in January 2008. Labuan is also a place attracting attention as a tax haven in recent years.
IBC is an abbreviation for International Business Company.
The IBC employs a tax incentive system on the condition that domestic transactions are not conducted within its territory, and corporate tax is lower than domestic corporations. All entities established within the Labuan Special Economic Zone are generally classified as IBC.
As an exception, Labuan accepts transactions in Malaysia for professional fees, office rent payments, and employee salary payments. Fiat currency Ringgit is also available.
Labuan Financial Services Authority (Labuan FSA) is a body corporate established to promote and develop Labuan as an international centre for business and financial services.
It is also entrusted to develop national objectives, policies for the development and administration of the international business and financial services in Labuan.
On October 1, 1990, Labuan was declared an International Offshore Financial Centre (IOFC). In an effort to develop Labuan into a successful IOFC, Malaysian Government established Labuan Offshore Financial Services Authority (LOFSA) on February 15, 1996 as a one-stop agency to focus on business development and promotion, process application and supervise offshore activities, and incorporate or register offshore companies.
Labuan International Business and Financial Centre (Labuan IBFC) presents a comprehensive midshore solution (Intermediate service between onshore and offshore
) striking the ideal balance between client confidentiality and compliance with international best standards and practices.
Its business-friendly environment, anchored by a simple and attractive tax system, is well-supported by a robust, modern and internationally-recognised legal framework enforced by its regulator, Labuan Financial Services Authority (Labuan FSA).
Labuan IBFC boasts a wide range of business and investment structures facilitating cross-border transactions, business dealings and wealth management needs. These unique qualities offer sound options for regional businesses going global or global businesses looking at penetrating Asia's burgeoning markets.
Strategically located in the heart of Asia Pacific, Labuan IBFC is well positioned to tap into one of the fastest growing regions in the world, presenting the perfect opportunity for businesses seeking to connect with Asia’s economies and beyond.
Labuan offers the lowest tax rate financial center in Asia with an effective tax rate of 3%. Compared to Hong Kong (16.5%) and Singapore (17%), we are in a better environment to reinvest profits.
In addition, any company that invests or a foundation that does not conduct business is non-taxable. In this case, the audit is exempted.
1-3. About Labuan Trust Company
A Labuan company refers to a company established in accordance with the Labuan Company Act. 1990 or a company established outside Malaysia as a foreign company registered under the law. It is stipulated you must use the services of the Labuan Trust Company in order to do.
Currently, over 50 trust companies are operating in Labuan.
You can check the details from the following site.
Labuan companies are obligated to establish a company secretary. "Company secretary" means "the position to prepare and store documents related to corporate registration, and prepare minutes of shareholders' meetings and board meetings". In the case of a Labuan company, a trust company is to perform company secretarial business.
It is possible. However, since the company secretary is an annual contract in principle, it is a business practice that the secretary fee paid before the change is not refunded. Therefore, it is recommended to change at the time of annual renewal.
The trust company may resign from the company secretary if the managed entity violates the contract or the company secretary fees are not paid for a certain period.
Trust officer is a professional who act for beneficiary and has the role and responsibility of a so-called fiduciary, such as a duty of good care and faithfulness.