Labuan is a Federal Territory of Malaysia and makes up for the most part of the island along with six other islands. The Mining Industry (Gas & Oil Production continue to remain the major economic contributors followed closely by the Manufacturing Industry, Tourism and Hospitality and Retail Industry. It is the International Offshore Financial Centre (IOFC). The proliferation of offshore companies in Labuan has resulted in Finance turning up as a significant contributor. Company Formation in Labuan is advantageous as it enjoys a Double Taxation Avoidance Agreement signed by Malaysia with more than 70 countries such as India, the United Kingdom, Singapore, Ireland, Hong Kong, Hungary etc.
Taxes are levied at a flat rate of 3% on the net profits (subject to fulfillment of substance requirements by business with falling under the specified business activities).
There are no taxes levied if the company is an Investment Holding Company.
Exempt from paying Withholding Tax on Interest, Sales and Service Tax, Goods and Service Tax, Capital Gains Tax and Withholding Tax on dividends.
REQUIREMENT TO OPEN A COMPANY
Minimum one Director (There is no requirement for a Local Director).
Minimum one Shareholder (Director and the Shareholder can be the same person).
Affordable Labuan incorporation cost which sums up to a Nominal Share Capital at USD 1, however banks may require a minimum deposit of USD 10,000/-.
The companies in Labuan should have a Local Registered Office Address.
There is a mandatory requirement to have a Resident Secretary.
There is a mandatory requirement to audit the books.
List of proposed names.
For Individual Shareholders: Copy of passport and identification documents, address proof and contact details.
For Corporate Shareholders: Details of Authorized person, Copy of Certificate of Incorporation, AoA, MoA and PAN card or similar document, Shareholding pattern and address proof.
For Proposed Directors: Copy of passport and identification documents, address proof, contact details, Curriculum Vitae.
Professional letter from the Bank.
Name search and name reservation.
Preparing relevant resolutions, incorporation documents and company setup.
Registering with Tax Authorities.
Assistance in opening a bank account.
Other Maintenance & Compliance Services:
Provision of Company secretary.
Providing a registered office address.
Bookkeeping, Filing tax and annual returns.
Labuan company formation takes approximately 2 - 3 weeks to incorporate.