The Advantages of Setting up a Company in Labuan
Updated on Tuesday 13th December 2016
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Labuan is a special region of Malaysia, which acts as one of the main offshore centres in Asia. Over the years, the region has become very attractive for the foreign businessmen who wanted to open a company in Malaysia, due to its taxation regime and the business incentives provided to those operating a business in Labuan. Businessmen can incorporate several types of legal entities in this jurisdiction and our team of company formation representatives in Malaysia can offer assistance on the registration of a Labuan company, as well as legal advice on the entities which are suitable for a designated business activity.
Legal entities in Labuan, Malaysia
Foreign investors who are interested in company formation in Malaysia can choose from two main types of companies that can be incorporated in Labuan, as prescribed by the main rule of law available for this jurisdiction, which is the Labuan Companies Act since 1990.
Companies set up here are registered as offshore ones and they can take the following forms:
• trading companies;
• non-trading companies (also referred to as holding companies).
The legal entities are registered following the same simple incorporation procedure, but it is important to know that they are liable to a different taxation system and they need to fulfil different requirements.
Offshore companies that are registered in Labuan can have 100% foreign ownership and our team of company formation agents in Malaysia can provide more details on this matter.
Main advantages of a Labuan company
Companies registered in Malaysia traditionally require a business associate who is a local citizen. The commercial legislation available in Malaysia allows the incorporation of a company with 100% foreign ownership, a regulation which is also applicable in Labuan. An important aspect is that a company in Labuan does not need a director who is a national citizen of Malaysia, as the commercial regulations stipulate that the investor can also act as the company’s shareholder, as well as the company’s director.
The minimum share capital of a Labuan company is established at USD 1. Moreover, the company registration in Malaysia can be completed in maximum two weeks and it is not required for the investor to be present in the country throughout the incorporation stages.
The Labuan legislation does not impose the following taxes:
• sales and services tax;
• goods and services tax;
• withholding tax on dividends;
• withholding tax on interest;
• capital gains tax.
There are also no audit requirements, unless the company is operating in several industries, such as banking or insurance.
Businessmen interested in receiving more details on the advantages of a company registered in Labuan are invited to contact our team of company formation specialists in Malaysia.