Formation of Labuan company
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
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
Must we be
physically presence in Labuan to incorporate
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
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?
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?
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
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
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
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
How do a LC obtains a tax residency
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
Is there any tax on foreign sourced income and
capital tax gain?