LABUAN COMPANIES GENERAL INFORMATION

 

SHORT FORMS :
LC: Labuan Company
FLC: Foreign Labuan Company (Branch)
LFSA: Labuan Financial Services Authority
LCA: Labuan Companies Act 1990


1. Company law:

 

LCA

 

2. Types of offshore companies:

 

LC and FLC.

 

The LC can be in the form of:

 

  1. company limited by shares;

  2. company limited by guarantee; and

  3. unlimited company.

 

3. Companies with no shares issued:

 

Not permitted

 

4. Are bearer shares allowed:

 

No

 

5. Capital requirements:

 

LC: Minimum one share for non-licensed entities. For licensed entities, the issued capital requirement depends on type of licence.

FC: Dependent on its place of incorporation.

 

6. Government fees: Stamp duty is not applicable while registration fee is based on authorised capital, payable to
LFSA

 

Authorised Capital

(equivalent in foreign currency)

Fee
LC
Up to RM50,000 RM1,000
Between RM50,000 – RM1 Million RM2,000
Over RM1Million RM5,000
Lodgement of M&A RM100
Incidental filing fees RM100 - 200
FLC
Registration RM6,000
Incidental filing fees RM500

 

7. Annual fees paid to authorities:

 

LC: RM2,600

FLC: RM5,300
Licensed entities pay additional fees

 

8. Applicable taxation rates:

 

Labuan trading companies may opt to pay 3% on net audited profits or a fixed sum of RM20,000. Labuan non-trading companies pay no tax. Companies carrying on both trading and non-trading activities are deemed to be carrying on trading activities taxed accordingly. From Year of Assessment 2008, Labuan companies may elect to be taxed under the Malaysian Income Tax Act 1967 to secure more certainty to Malaysia's treaty benefits. Such election shall be irrevocable.

 

9. What are the requirements for the use of local representatives/professionals?

 

The services of a Labuan trust company are required to incorporate the Labuan entity and for statutory filings of the Labuan company. An officer, who is an approved officer of a Labuan trust company or a subsidiary company wholly owned by the Labuan trust company, must be appointed as the Resident Secretary of the Labuan company.

 

10. Are shelf companies readily available?

 

No, this is almost made redundant by the fact that Labuan companies can be incorporated within one to three working days.

 

11. Minimum number of members:

 

One member who can either be an individual or a corporate entity.

 

12. Registered office:

 

Must be the principal office of a Labuan trust company.

 

13. Directors and secretary:

 

Minimum one director who can either be an individual or a corporate entity. One resident secretary (see no. 9) must be appointed. Additional secretaries may be appointed.

 

14. Are Corporate Directors and Corporate Secretaries permitted:

 

Yes

 

15. Meetings:

 

There is no requirement as to the location of meetings. The LCA permits members’ resolutions to be passed by circulation or other electronic means.

 

16. Annual return:

 

Annual returns must be filed not later than 30 days prior to the anniversary of the date of incorporation.

 

17. Must financial statements of a company be audited?

 

Required for licensed entities, those making public offerings and entities opting to pay 3% tax (see no. 8).

 

18. Is disclosure of profits required by filing balance sheets with annual returns?

 

Accounts not required to be filed with annual returns . However, if the members of a Labuan company adopt audited accounts then it is necessary to file the same with LFSA (see no. 17)

 

19. Are there any exchange control or other financial restraints imposed upon an offshore company?


No exchange controls on foreign currency transactions. Labuan companies are not permitted to carry out transactions in Malaysian Ringgit, except for defraying administrative expenses, and making permitted investments in Malaysian securities. Certain licensed companies are permitted to deal in Ringgit subject to licence conditions.

 

20. Labuan companies incorporated or registered in the year 2013:

 

865

 

21. Total number of Labuan companies formed or registered as at 31 December 2013:

 

10,352

 

22. How, if any, is migration into and out of the jurisdiction achieved?


Provided for in the LCA through registration and approved by members, creditors and debenture-holders, and the authorities of both jurisdictions.

 

23. Does Labuan have access to any tax treaties?


Malaysia has signed more than sixty double-tax agreements with its trading partners, most of which also apply to Labuan.

 

24. What are the fees for incorporation of Labuan companies and other trust company services?


Range of Fees

 

Incorporation: USD700 - USD1,200

 

Annual Management Fee: USD500 - USD1,500

 

Nominee Shareholder: USD200 - USD500

 

Opening of bank accounts: USD500 - USD2,000

 

Other services depending on time and skills involved

 

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