LABUAN TAX

Why Need A Labuan Company?

3% Labuan tax
Easy to get Labuan licensing - 100% ownership
Easy to do Labuan operation - 100% ownership
Easy to stay and work from Malaysia

How To Start?

1. Register a Labuan company 5 working days

2. Apply for Labuan license (if any) 5 weeks

3. Open a bank account 3 - 6 weeks

4. Setup substance in Labuan 4 - 6 weeks

Benefits of Labuan Company

 100% Ownership + 100% Control
Foreigner can have 100% ownership of the Labuan company incorporated

1 Director + 1 Shareholder + Share capital USD 1.00 + Labuan substance

Easy to get Labuan licensing

Easier & faster licensing in Labuan - In comparison to other international jurisdictions

Labuan leasing of vessel, shipping, aviation | Forex broker | Insurance, re-insurance

Commodities trading, petroleum, minerals, coal, agriculture, chemicals

Labuan banking license | Fund management | Private fund | Securities licensee

Also, you can do any business, that is not related to Labuan licensing as well

Stay in Malaysia & Work in Malaysia

Good food. Good people. Good living conditions. Good working environment

Who could resist living in Malaysia, where quality meets affordability

Apply for Labuan work permit / dependent pass while working for a Labuan company

Labuan Taxes are Easy

Labuan holding company is subject to 0% tax (zero tax)

Labuan professional services / licensed company is subject to 3% tax

Malaysia Double Taxation Agreement, DTA protects your income from being taxed twice

Labuan company tax : 0%, 3%

Personal tax - Dividend : 0%
Withholding tax / Capital gain tax : 0%

Labuan Tax Rates

Labuan Licensed Company
Eg, Labuan leasing, money broker, insurance broker, fund manager

Eg, Securities offer, private fund, forex broker, petroleum trading, more

Compulsory to operate with a Labuan license

3% tax
Must have office, 2 - 3 staff, spend RM 100,000 - 200,000 in Labuan

Accounts must be audited

See more Labuan license types here

Professional Services "Code 23"

Business that are related to administrative, accounting, legal services

Including backroom processing, payroll services, talent management,

Agency services, insolvency related services, management services

3% tax
Must have Labuan office + 2 Labuan staff

Minimum spending in Labuan : RM 50,000

Accounts must be audited

Holding Company : Pure Equity Holding

Labuan investment holding - Hold shares of subsidiary company

Receive dividend from a subsidiary company

Receive capital gains as income 0% tax

Must have central management and control in Labuan

Minimum spending in Labuan : RM 20,000

Holding : Non Pure Equity Holding

Labuan investment holding - Hold investment that has passive income

Eg, interest, rents, bonds, debt instruments, securities, etc

0% tax
Must hire 1 Labuan staff

Minimum spending in Labuan : RM 20,000

Non Classified Business 24% tax
Labuan company that failed to fulfil Labuan substance, or

Labuan company that is not licensed by Labuan Authority, or

Labuan company that is not a holding company, or

Labuan company that is not a service provider listed in "Code 23"

Eg, Trader, manufacturer, wholesaler, intellectual property etc

Labuan substance = Office, full time staff, minimum spending in Labuan

How to Verify These Information?

Inland Revenue Board of Malaysia, IRB is the regulator of Labuan tax system

http://www.hasil.gov.my

Labuan Financial Services Authority, Labuan FSA is the regulator of Labuan company

http://labuanibfc.com

Labuan company formation / renewal

Included assistance to open bank account, internet banking
USD 2,500
Holding company formation / company renewal = USD 2,200

Duration : 5 working days

Our Services

Labuan Licensing Application

Labuan money broker, fund manager, private fund, banking

Shipping leasing, aircraft leasing, petroleum trading Ask for Quote

Each licensing requirement is different

Duration : 30 working days

Bank Application
Open foreign currency account - USD, SGD, EUR, AUD, MYR

Minimum bank initial deposit : RM 50,000 (USD 12,500) USD 500

Included assistance to apply for internet banking

Duration : 3 - 6 weeks

Labuan Work Permit - 2 Years

RM 250,000 paid up capital is not required from 2019

Must have Labuan office. Minimum USD 1.00 paid up capital

Monthly salary RM 10,000 + EPF pension + Socso security

USD 1,100
Salary is subject to PCB monthly tax deduction

Compulsory to pay for 2 years Authority fees

Excluded immigration fee USD 350. Pay after visa approval

Duration : 6 - 8 weeks

Labuan Dependent Pass - 2 Years

Bring along your immediate family members USD 550
Excluded immigration fee USD 350. Pay after visa approval

Who is Labuan Tax?

Trust Labuan Tax Inc
License No : LMT0058

Trust Labuan Tax Inc is a Labuan licensed trust company

Approved by the Labuan FSA from 2013 to carry on corporate services business

Provide guidance on license application, work permit, bookkeeping, accounting

Labuan Office
Unit B, Lot 49, First Floor, Block F, Lazenda Warehouse 3, Jalan Ranca-Ranca, Labuan

Email : sales@labuantax.com

Phone / WhatsApp : +6016 821 8171

Our Customer Feedback :

Nelson Tan - Xavier & Charles Advisory Inc
We are very pleased with Trust Labuan Tax Inc's corporate secretarial services

They make it so convenient for us (as foreigner) to incorporate business in Labuan

Most importantly they resolved the issue you have with Labuan's authority and bank

We are delighted with their professional services

Highly recommend Trust Labuan Tax Inc, if you require any company registration at Labuan

See more testimonies

Contact Us
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Contact number

Email

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Frequently Asked Questions

FAQs about Labuan company

How to register a Labuan Company? Labuan leasing - Tax deductible expenditure

What is a Labuan holding company? Labuan leasing - Any withholding tax?

What is "Code 23" business? Can we run online business from Labuan?

We need office and staff in Labuan? Can i do Fintech business in Labuan?

Can I be sole director & shareholder? How to live in Malaysia with a Labuan visa?

Dividend - What is the tax rate? Do you know anything about MM2H visa?

Capital gains - What is the tax rate? Who is eligible for Labuan company?

If run trading and non-trading together?

How to incorporate a Labuan Company?

Labuan Company Incorporation :

Fill in forms and send documents to us

Remit payments

Checklist :

If individual - Certified passport, certified proof of address, resume, reference letter issued by
professionals
If corporate - Certified proof of incorporation, shareholding, directorship, license approval (if
any), documents related to each individual as above

What is a Labuan holding company?

Labuan holding company only holds investment that has passive income
 Pure equity holding

Receive income from dividends and capital gains by holding shares of subsidiary
Spend RM 20,000 + Have central management in Labuan = Zero Labuan tax

Non pure equity holding

Only receive passive income that is not part of pure equity holding
Eg, interest, rents, royalties, bonds, debt instruments, properties, securities, etc
Spend RM 20,000 in Labuan + Hire 1 staff in Labuan = Zero Labuan tax

What is "Code 23" business?

Code 23 is a business category (also known as "other trading"), defined as Labuan entity that
carries out administrative, accounting, and legal services including backroom processing,
payroll services, talent management, agency services, insolvency related services, and
management services

Eg, advertising agency, commission agent

Excluding activities that are similar to procurement trader, wholesaler, services related to
intellectual property (IP), consultancy, advisory

Do we need office and staff in Labuan?

It depends on your business types
You can check here to see, if your business will need an office and employee in Labuan

Can I be the only director and shareholder?

Both foreigner and Malaysian citizen can setup Labuan company
Only 1 director
Only 1 shareholder
Only USD 1.00 paid up capital
Nominee director is not needed

Dividend - What is the tax rate for my dividend?

Dividend - Zero income tax, if paid by the Labuan company to the shareholder

Dividend - Zero withholding tax, if paid by Labuan company to the shareholder

Salary - Zero withholding tax, if paid by Labuan company to Malaysian resident

Capital gains - What would be the tax rate?

Capital gains of Labuan company is subject to zero tax (0% tax) - Eg, Disposal of shares
Labuan leasing - What's the tax deductible
expenditure for Sdn Bhd?
Payments transferred by Sdn Bhd to Labuan company :

Interest :
67% tax deductible. 33% not deductible expenses for Sdn Bhd

Leasee's Rental :
67% tax deductible. 33% not deductible expenses for Sdn Bhd

Other expenses :
3% tax deductible. 97% not deductible expenses for Sdn Bhd

Note : Sdn Bhd = Malaysian local company

What's a Labuan leasing business?

Labuan leasing - What's the withholding tax?

Dividend / interest transferred :
From Labuan company to Sdn Bhd / Malaysian individual
If operated from Labuan
Zero withholding tax

Dividend / interest transferred :

From Labuan company to other countries / jurisdictions
If operated from Labuan
Zero withholding tax

Rental / leased fee transferred :

From Sdn Bhd to Labuan company
Zero withholding tax

Note : Sdn Bhd = Malaysian local company

What's a Labuan leasing business?

Can we run online business from Labuan?

Yes. Labuan company is suitable for online business

Drop shipping, digital marketing agency, sales commissions, software development unrelated
to intellectual property, system integration management,

Telecommunication management, web designer, clickbank sales commissions, online ads

agency, online education portal management, infomercial ads agency, amazon sales referral
agency, lifestyle business promotor,

business management, wedding manager, product sourcing agent, sales and marketing agent,
coaching management, etc
Can i do Fintech business in Labuan?
Labuan company must first be approved by the Labuan Authority to conduct Labuan Innovative
Financial Services (Labuan IFS) before operating any of these activities. Also, the approval
normally comes in a bundle with the Labuan licensing.

Labuan IFS allows you to do Labuan business related to fintech, insurtech, blockchain, bitcoin,
cryptocurrency

How to live in Malaysia using a Labuan company?

Apply for work permit. And bring your family along under dependent pass
You can check here to see how to apply for work permit

Do you know anything about MM2H visa?

MM2H application - Below 50 years old
Liquid asset worth RM 500,000, or more
Offshore income RM 10,000 / month, or more
Fixed deposit in Malaysian bank RM 300,000
Buy a Malaysian property RM 1 million (fully paid) to reduce fixed deposit to RM 150,000

MM2H application - 50 years old or above

Liquid asset worth RM 350,000, or more
Offshore income / pension RM 10,000 / month, or more
Fixed deposit in Malaysian bank RM 150,000
Buy a Malaysian property RM 1 million (fully paid) to reduce fixed deposit to RM 100,000

Malaysian My Second Home visa - MM2H is a 10 years resident visa. Renewable

Who is eligible for Labuan company?

Eligible for Labuan company

Malaysian
Foreigner
Dealing with companies in other countries
Dealing with another Labuan company
Dealing in foreign currency

Not eligible for Labuan company

Dealing with Malaysian resident

Dealing in Malaysian currency, Ringgit (MYR)
Dealing with very high risk business
Sanctioned / blacklisted / high risk countries
Apply for work permit without business purpose
Holding investment - If annual expenditure in Labuan is below RM 20,000
Other-Trading business - Annual profit below USD 100,000 is less suitable
What if the Labuan company carried out both
trading and non-trading together?
If the Labuan company carried out both trading and non-trading business activities at the same time,
it will be treated as trading activity (according to Inland Revenue Board, IRB).

What if I still have more questions?

Write email to us : sales@labuantax.com
Phone / WhatsApp : +6016 821 8171

Labuan licensing
What business licenses are available in Labuan?

Labuan leasing
Labuan leasing is a business of renting out assets like machinery / vessels related to
aviation, shipping such as aircrafts, ships, more. Charter on a bare boat basis
Minimum Labuan staff : 2 staff for first 10 companies. Add 1 staff for next 10 companies
Minimum spending in Labuan : RM 100,000 per company

Labuan money broker

Labuan money broker is a forex broking business between buyers and sellers
Minimum Labuan staff : 2 staff
Minimum spending in Labuan : RM 100,000

Labuan insurance broker

Labuan insurance broker is a person who arranges insurance business on behalf of policy
owners. And, arrange reinsurance business on behalf of insurer
Minimum Labuan staff : 2 staff
Minimum spending in Labuan : RM 100,000

Labuan insurance company / reinsurance

company
Labuan insurance issuer is in the business of providing general insurance / life insurance.
Reinsurer provides insurance services to insurance issuer / another reinsurer
Minimum Labuan staff : 3 staff
 Minimum spending in Labuan : RM 200,000

Labuan fund manager

Labuan fund manager is a person who provides investment advice and securities services
Minimum Labuan staff : 2 staff
Minimum spending in Labuan : RM 100,000

Labuan securities licensee

Labuan securities licensee is a person who provides advice for securities
Minimum Labuan staff : 2 staff
Minimum spending in Labuan : RM 100,000

Labuan private fund

Labuan private fund is a mutual fund whose securities are held by investors

Labuan commodity trading

Labuan International Commodity Trading (LITC) is for traders of physical products and
related derivatives, that primarily uses Malaysia as their base
Eg, Petroleum related, liquefied natural gas, LNG, minerals, agriculture, refined raw
materials, chemicals, base minerals, coal

Minimum Labuan staff : 2 staff for first 5 companies. Add 1 staff for next 5 companies
Minimum spending in Malaysia : RM 3 millions per company (include Labuan spending)
Minimum spending in Labuan : RM 100,000 per company

Contact Us
Write email to us : sales@labuantax.com
Phone / WhatsApp : +6016 821 8171

Our Customer's Testimonies

Vanni Torelli - Gluon Inc

I learned about LabuanTax.com from a common friend. Being from country A, living in country B
and working for clients in country C, I knew I needed a "one-stop shop" business arrangement that
could work for me, give me the least amount of management burden and be sustainable in the
long run. Labuan Tax treats me the way you would expect from a friend, not an accountant. He
took me through all the necessary steps to register a Labuan business company and set up the
required banking and accounting processes with minimal supervision and hassle from me.

I can safely say that Gary and Ms Chai have provided me with timely, impeccable service, even at
short notice and when urgent action was needed. Everything they said or did showed genuine
care for their clients, no matter how small their business footprint or revenues. Perhaps most
importantly, they have always been one messenger chat away for any query or doubt I had.

I continue to view Labuan Tax as an effective business ally and friends, and I am certain, so does
everybody who has been using or will use their services. There is no doubt that Labuan is one of
the world's best offshore business platforms for SMEs. There is also no doubt that Labuan Tax is
the best gateway to create and help run it.

Garrie Cox - TerraTorque Inc

Trust Labuan Tax Inc helped us set up a Labuan company several years ago. They are very
professional and thorough and made the process quite easy to understand. He provided us with
guidance every step of the way to ensure that we got our Labuan company up and running quickly
and efficiently.

In the years following establishment of our business, Mr. Wong has kept us informed of all our
options and all updates regarding Labuan companies. They have assisted us in our yearly
company matters. Their personnel are knowledgeable, honest and straightforward and have
always operated with our best interests in mind.

They have made operating a Labuan company quite easy, and I am confident you will be very
pleased should you elect to use their services. I would not hesitate to recommend Trust Labuan
Tax Inc and their team to anyone considering setting up a Labuan company.

Chee Hoong - Velofinity Inc

They are very dedicated and professional consultant with deep off-shore company formation
knowledge in a variety of aspects like finance, company administration, penalty and etc. They
always went the extra mile to bring value to both their client's business and company
administration.

Their relentless customer focus and solution-oriented attitude, complimented by the friendly and
easy-going personalities have always made it a true pleasure for me to get consultation and
services from. I can recommend Labuan Tax very highly.

Alex - Silverberry Inc

It is with great pleasure to write a testimony for Trust Labuan Tax Inc. They provided corporate
secretarial services for my Labuan company in Malaysia

Over the years, I have known them to be an extremely dedicated, efficient and trustworthy
persons. They have good and serious attitude towards their works, and they treat all his clients
with great respect and professionalism.

I am certain that you will find them to be a worthy asset to have in your company should you
engage their corporate secretarial services. For any information that you may need regarding this
recommendation, please do not hesitate to contact me.
Definitions

Labuan trust company : Trust Labuan Tax Inc is a licensed trust company in Labuan to provide company secretarial services from company formation,
bank account opening, work permit application, and Labuan licensing application

Labuan company : A company incorporated at Labuan international business financial center. Considered non resident in Malaysia

Labuan : A low tax jurisdiction located in Malaysia, either subject to zero tax or 3% tax

Withholding tax : A tax rate that is withheld during fund transfer out of Labuan. Withholding tax rate is usually lower, if there is a double taxation

agreement signed between Malaysia and intended countries

Paid up capital : The amount of share capital fully paid up into the Labuan company

Source of income : Jurisdiction where income is mainly earned from. Eg, Foreign income source (overseas) / domestic income source (Malaysia)

Management and control : Jurisdiction where core business activities are mainly performed and decisions are made

Labuan non trading activities : Labuan non trading activity is consisted of pure equity holding, and non pure equity holding

Non trading - Pure equity holding : Labuan pure equity is holding the shares of a subsidiary company

Non trading - Non pure equity holding : Labuan non-pure equity is holding investments, other than shares of a subsidiary company. Eg, securities, stocks, bonds,
debts

Labuan trading : Labuan trading company consists of Labuan licensed company, professional service providers within code 23 (Also knowns as
"other-trading"). Labuan trading is presently excluding activities similar to reseller / wholesale / software license fee /

intellectual property

Holding company : A Labuan company that buys (holds) shares of another company (subsidiary), or holds long term investments that generate

passive income

Audit in Labuan : Labuan company must be audited (and must appoint an auditor), except for non-trading activities conducted

Sdn Bhd : Sendirian Berhad, Private Limited in Malaysia - A Malaysian local company

Jurisdiction : Jurisdiction here refers to Labuan, Malaysia

Offshore : Offshore company here refers to company formation at countries like Singapore, Hong Kong, UK, BVI, Cayman, Seychelles

Malaysian resident : Malaysian citizen, permanent resident or foreigners that stays more than 183 days in Malaysia

Foreigner : Non Malaysian resident that stays less than 183 days in Malaysia

Work permit : A legal permit that allows foreigners to work and reside in Malaysia. Sometimes also called Employment Pass / Expatriate
Work Pass

Dependent visa : Visa for work permit holder's spouse, children or parents to stay in Malaysia

Labuan IBFC : Labuan International Business and Financial Centre. A marketing arm that promotes Labuan's benefits

LBATA : Labuan Business Activity Tax Act 1990 - Labuan corporate tax (For professional service provider within code-23 = 3% of

audited profit, if substance is fulfilled) (If non-trading investment holding = zero tax, if substance is fulfilled). Otherwise, 24% tax

ITA : Income Tax Act 1967 - 24% corporate tax, if source of income is derived from Malaysia

DTA / DTAs : Double Taxation Agreement is an agreement between two countries seeking to avoid double taxation

LCA : Labuan Companies Act 1990 (Act 441) - The Act that governs Labuan companies and its business activities
OECD : Organisation for Economic Co-operation and Development - International organisation that consists of members from several

countries

Company Registration Labuan Company Guides

Register Labuan company Labuan tax rates

Labuan license application Labuan business & substance

Bank account opening Benefits of Labuan company

Work permit application Types of Labuan licensing

Complaint to us

Disclaimers :

1. Content posted on the website is not intended for tax advice or financial advice

2. We make no claim of its accuracy

3. Use the content posted at your own risk

Trust Labuan Tax Inc.

Unit B, Lot 49, First Floor, Block F, Lazenda Warehouse 3, Jalan Ranca-Ranca, Labuan

Email : sales@labuantax.com

Phone / WhatsApp : +6016 821 8171

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