About Labuan Incorporation
Bona Trust Corporation provides Labuan Company Incorporation and Management Service.
1. Features of Labuan company
The main features of Labuan company are as follows:-
| ● Time to establishment | Around 4 – 6 working days |
| ● Dormant Company | Yes |
| ● Legal effective tax rate |
3% (Asia region minimum tax rate) |
| ● Accounting audit system | Yes |
| ● Secretarial service system | Yes |
| ● Nominee shareholder | Yes |
Labuan company refers to “A company established in compliance with Labuan Companies Act 1990” or “A company established outside Malaysia as a foreign company under the same law” and conduct business activities in compliance with laws and regulations, it is stipulated the service of the Trust Company must be used.
Labuan company does not have a minimum capital system, it is possible for 1 shareholder and 1 director (even a non-resident), but employment of a secretary (company secretary) is mandatory.
The company secretary is “a title that creates and keeps documents related to corporate registry, creates minutes of shareholders meetings and board meetings.” In the case of Labuan, the trust company is supposed to perform the company secretary business.
Almost Labuan companies are established as a limited liability company [*1], but bearer shares (share certificates not listed) are not allowed.
Regarding the tax rate, it is 3% of the accounting audited income. Accounting audits are conducted by the auditor authorized by Labuan Financial Service Authority (LFSA). Declaration and tax payment must be done by the end of March the following year.
In addition, since the registration address of Labuan company is stipulated to be located in the office of Labuan Trust Company, the registration address of the company must use Trust Company’s address. Furthermore, it is stipulated records of accounting audits must be kept in Labuan.
* 1 As corporate name of limited liability company, “Incorporated (Inc.)”, “Limited (Ltd.)”, “Corporate Limited (Co., Ltd.)” etc must be attached after coeporate name.
* 2 There are 2 address concepts in Labuan company. One is “the registered address (head office address)”, and the other is “the business office address (Management Office Address)”. Management office is optional.
| Share Capital | Permitted Currencies | Any Foreign Currency except Ringgit Malaysia |
| Standard Currency | USD | |
| Minimum Issued Capital | One (1) in domination in foreign currency | |
| Authorised Capital | N / A | |
| Directors | Minimum | One (1) |
| Corporate Directors | Allowed | |
| Local Directors Requirements | Optional | |
| Publicly Accessible Records | Not in public | |
| Others | Possible for the same person as the shareholder | |
| Migration to the mainland of Malaysia is possible with work permit | ||
| Shareholders | Minimum | One (1) |
| Bearer Shares | No | |
| Corporate Shareholders | Allowed | |
| Local Shareholders Requirements | Optional | |
| Location of Meeting | Anywhere | |
| Minimum Numbers of Meeting | One (1) Annually | |
| Publicly Accessible Records | Not in public | |
| Others | possible for the same person as the director | |
| Company Secretary | Minimum | One (1) |
| Requirements | A resident secretary who must be a trust officer of a trust company or Labuan / Malaysian domestic company wholly-owned by the Labuan trust company | |
| Registered Office | Requirements | Principal office of a trust company in Labuan |
| Accounts | Records | Must keep in Labuan |
| Preparation of Accounts | Yes | |
| Audit Requirements and filing | Optional, but required for Labuan companies opting to pay tax at 3% p.a. on the audited net profits and also, licenced companies | |
| Publicly Accessible Records | Not in Public | |
| Annual Requiments | Annual Return | Not later than 30 days from the anniversary date of incorporation of the Labuan company |
| Annual Government Fee | On or before the anniversary date of incorporation of the Labuan company | |
| Tax Filing | Annual tax return needs to be filled with Malaysian Director General of Inland Revenue by 31 March of that year of assessment. Normally, an extension of time for filling is allowed by the Inland Revenue. | |
| Taxation | Trading Activities | 3% of net audit profits |
| Non Trading Activities | Nil | |
| Trading and Non Trading Activities | 3% of net audit profits | |
| Others | No withholding tax, no capital gain tax, no stamp duty on offshore instruments | |
| General | Legal System | Common Law |
| Corporate Redomiciliation | Yes | |
| Double Taxation Treaty Access | Yes (* Excluded from tax treaties with Australia, Chile, Germany, India, Indonesia, Japan, Luxembourg, Netherlands, South Africa, Spain, Sweden, Seychelles, and the United Kingdom.) | |
| Foreign Exchange Control | No |
2. About Labuan Company Incorporation
Kindly refer to “Labuan Company Incorporation” on how to incorporate Labuan company.
3. About Labuan Company Annual Renewal
Kindly refer to “Labuan Company Operation” about how to operate Labuan company.