Labuan, located at the northwest coast of Borneo, north of Brunei and south of Kota Kinabalu, comprises several islands. There are various offshore jurisdictions in the Asian region, but hardly one can be compared to Labuan.
Labuan in Malaysia gained its traction as one of the few offshore financial centers in Asia that attract multinational companies and investors across the globe by using Malaysia as their international business hub.
Labuan turned into an International Offshore Finance Centre by the Malaysian government in 1989. Then the Offshore Companies Act was formed in 1990 to create offshore corporate laws. Also, the Offshore Banking Act 1990 was created, along with the Labuan Trust Companies Act 1990.
Labuan is an ideal location to establish an offshore company because it is a common-law jurisdiction and not constrained by any rule outside Malaysia. In other words, it provided wide latitude to govern its affairs.
An investor can gain a lot through offshore company formation in Malaysia; some benefits apart from the core benefits are:
- Laws are fundamentally based on the English legal system
- Shelf companies can be incorporated into Labuan
- Exchange controls are liberal
- Political stability is in abundance in Malaysia
- Local banking facilities are also excellent
Why Choose Malaysia (Labuan) for Offshore Company?
Labuan, a federal territory of Malaysia, is an independent state with its laws but protected by the sovereignty of Malaysia. Just like many other low tax jurisdictions, Labuan imposes a no-tax regime for the majority of companies with non-Malaysian sourced income.
Malaysia's strategic location presents an excellent opportunity for investors looking for company registration in Malaysia.
Regardless of the Islamic impact in Malaysia, Labuan primarily uses common law, and non-Muslims are exempt from any Islamic financing dictates. Labuan incorporation offshore companies offer a full suite of cost-efficient back workplace services to staff operations with qualified employees.
Read more about How to start an offshore company in Malaysia on our blog!
Malaysia Offshore Company Requirement for Registration
The registration requirements to establish an offshore company include:
- One director (minimum)
- One secretary
- One shareholder (minimum)
- A registered office address in Labuan
The minimum deposit for the bank account opening will vary depending on the bank you choose. Moreover, the formation of an offshore company will complete within a week. The opening of a bank account will take approximately the same time since the banks must conduct due diligence checks. Also need to fulfill the following requirements:
- Determine your company name and identity. You must prepare at least three names to submit for approval.
- Determine the nature of your business and company structure align with compliance and tax.
- Determine the suffix for your company name. Your options include Co. Ltd, Limited, Ltd, LLC, Labuan or Inc.
- Determine the ownership portion for your shareholders.
- Prepare the minimum authorized capital
- Complete your bank account opening
- Prepare the registration fee
- Foreigners will be eligible for a two-year multiple-entry business visa. This visa can extend to include dependents. With that visa, you can choose to reside anywhere else in West Malaysia if you desire.
Why is Labuan Malaysia's Best Offshore Jurisdiction?
Malaysia's Labuan offshore company incorporation has gain attraction over the years as an international business hub. It is one of the top choices of countries for offshore incorporation.
It has become prominent as among the few offshore financial centers in Asia, attracting multinational businesses from all over the world. Because of its common-law offshore jurisdiction, it is the ideal location to form an offshore company. The advantages of a Labuan offshore have over other locations are:
- Labuan has no tax policies in place for any Asian and foreign company which draws investment into the region.
- 100% company ownership for foreigners
- Can trade with a Malaysian company at a low tax rate of 25%, provided the transaction reported to the Labuan Authority.
- Investment holding companies don't require audits. They are not taxed either.
- It not bounded by rules outside Malaysia gives it more freedom to govern its affairs.
- A properly structured offshore company is legitimately tax-exempt from several business areas, including investment holding, trust management, insurance, fund management, and offshore banking.
- Despite being an independent state with its set of laws, Labuan is still protected by Malaysia's sovereignty.
- Corporate tax rates as low as 3%.
- Director's fees and dividends are not taxed.
- No trade licenses requirement for most business
- Investor's families are eligible for a 2-year business visa.
- The flexibility of trading in Ringgit Malaysia or foreign currency bank accounts
- The Labuan Legislation law will remain unchanged and stable for the foreseeable future.
- Protected from double taxation, gratitude to Malaysia's Double Taxation Agreements with several countries.
The offshore banking system in Malaysia is also very fruitful. There are multiple benefits of having an offshore bank account in Malaysia. It is also essential for an offshore business to have an active offshore bank account to start its day-to-day operations.
Once you decide to move ahead with an offshore company formation plan, it is always advised that you first take the help of an incorporation advisor to make your entire setup process burden-free.
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Contact us today to get started with your company incorporation in a jurisdiction of your choice.
Our business experts hold industry knowledge and experience to offer tailored solutions to suiting business needs. To start an offshore company in Malaysia, contact us today-we'd be glad to assist.