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Labuan company

Formation of Labuan company

Labuan IBFC

Labuan trust company

Labua Labuan company

Incorporation of Labuan company

FAQ on LC (Secretarial):  

What should I do if I want to set up a LC?
a)     Email us, call us or send us a facsimile;
b)     Complete our standard application form and furnish us with the all the required documents as listed therein;
c)     Courier all documents to our office together with a copy of the bank remittance advice (once payment has been made into our bank account)

What is the duration to incorporate a LC?
Approximately 2 working days, upon receipt of all the required documentation.

Must we be physically presence in Labuan to incorporate the LC?
Not necessary, but it would be our pleasure to meet up with you.

What is the minimum number of director and shareholder required to form a LC?
One.  Both director and shareholder can be of the same person.

Can the director and shareholder be a corporation?
Yes. There is no restriction on corporate directorship nor corporate shareholding.

Is it mandatory to appoint a Resident Director (i.e. a trust officer of a trust company duly approved by the Labuan FSA)?
No.  However, it is mandatory for a LC to appoint a Resident Secretary who is an approved trust officer.

Is the information on the LC publicly accessible?
No.

Can a third party conduct a company search on the LC?
Yes, if written authorisation for the company search is granted by the officer, director or shareholder of the LC.

Must the directors and shareholders be physically presence in Labuan to attend meetings?
Not necessary.

Is the appointment of auditor mandatory?
The appointment of auditor by a LC is optional, unless it is a licensed entity registered with the Labuan FSA.  A LC carrying on a Labuan business activity which is a Labuan trading activity may appoint an auditor if it elects to pay 3% of the net audited profits for taxation purposes.

Can a Malaysian incorporates and owns a LC? 
Definitely.  Dividends paid by the LC is tax exempted when received by Malaysian shareholders.

As the shareholder and/or director would I have to register for and contribute to Employee Provident Funds and/or Social Security Organisation of Malaysia?
No. Registration is only compulsory to Malaysian and Malaysia Permanent Residents.

How do we terminate the LC?
It is recommended that a member's voluntarily winding up procedure be undertaken to wind up the affairs of the LC.

When would a LC be struck off the register of companies?
Upon failure to pay its annual fee and penalty imposed by the Labuan FSA.

FAQ on LC (Taxation):

Who will be Tax Agent of the LC?
It is recommended that we act as the tax agent, whilst acting as Resident Secretary for the LC.

What are the tax options available for a LC?
a)    A Labuan non-trading company is not subject to tax;
b)    A Labuan trading company will be taxed at a rate of 3% of its net audited profits or at a flat rate of RM20,000 pursuant to the Labuan
       Business Activity Tax Act ("LBATA") upon election by the Company for that year of assessment;
c)    A Labuan company may elect to be taxed under the Malaysian Income Tax 1967 in order to access Malaysian's Double Tax Treaty.

Can a LC elect to be taxed under the Income Tax Act 1967?
Yes and it is an irrevocable election.

What is a Labuan trading company?
It is a LC carrying on a Labuan trading activity, which includes banking, insurance, trading, management, licensing or any other activity which is not a Labuan non-trading activity.

What is a Labuan non-trading company?
It is a LC carrying on a Labuan non-trading activity, which includes the activity relating to the holding of investments in securities, stocks, shares, loans, deposits and immovable properties by a LC on its own behalf.

How do a LC obtains a tax residency certificate?
The LC must prove that during that basis year the management and control of its business was being exercised in Malaysia.

When is the deadline for tax return filing?
31 March annually or any extension of time as may be allowed by the Inland Revenue Board Malaysia.

Can a LC apply for further time extension for tax return filing?
Yes, but the approval is subject to the discretion of the Inland Revenue Board Malaysia.

Why should a Labuan trading company closes its first financial year end at 31 December?
To avoid the absence of basis-period.

What is basis-period?
It refers to the accounting period or periods ending in a calendar year immediately preceding that year of assessment.

What is year of assessment?
It means calendar year.

Is there any withholding tax on dividends and trust distributions?
No.

Is there any tax on foreign sourced income and capital tax gain?
No.

 

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