Facts to know about the registration of a Labuan Company
Approval of the Company name
- The name of the Company must be approved beforehand by the Registrar.
- The procedure of name approval takes up to 24 hours and the approved name is reserved for a period of three (3) months.
- The Company name must be followed by a word or abbreviation denoting that the company is limited by shares (i.e. Corp., Ltd., P.L.C. etc.).
- Minimum Number: One (1) either a physical or a legal person.
- Minimum Number: One (1) either physical or a legal person.
- The Company must have one (1) Resident Secretary.
- The Company must have a registered office in Labuan, which has to be the main office of a trust company.
Requirements for the incorporation
- Signed Memorandum & Articles of Association
- Statutory declaration by an officer of the company (Form 6)
- Consent in writing of the person(s) to be appointed as director(s) of the Company (Form 24)
- Payment of the relevant incorporation fees.
(Time-frame for the incorporation: 24 hours.)
- Minimum paid up capital: one (1) share.
- No par value or nominal value.
- Different classes of shares can be issued.
- Bearer shares are not allowed.
- To determine the capital duty to be paid to the Registrar, please see below:
Share capital less than RM 50,000 (or the equivalent value)
Share capital between RM 50,000 and RM 1 million (or the equivalent value)
Share capital over RM1 million (or the equivalent value)
- The Labuan companies are allowed to carry out their transactions only in foreign currencies.
- The bank account can be opened in any jurisdiction and in any currency (expect Israeli Shekels)
Accounting and Audit Obligations
- Accounting is required and the books shall be stored at the registered office in Labuan.
- Every transaction must be registered within 90 days, after its completion.
- Audit is not required unless the Labuan Company chooses to be taxed at 3% of its net profits and only audited accounts have to be submitted to the Labuan authorities.
- Annual returns must be filed one month before the anniversary date of the incorporation.
Annual Government Fee
- The amount is (RM 2,600.00 – equivalent to about USD 867) and is payable before or on the anniversary date of the registration.
Annual General Meetings and Board Meetings
- Not required, unless otherwise specified in the Articles of Association.
- Board meetings can take place in any jurisdiction, unless the Company has to prove that it is tax resident in Labuan. In the latter case, the meetings must be held in Labuan or anywhere in Malaysia.
- There are not any exchange controls, unless the companies carry out transactions with Malaysian companies or in the Malaysian currency. Also, please note that transactions with Israel are not allowed.
- If the company does not carry out trading activity (i.e. the Labuan company holds shares, stock, securities, deposits on its own behalf), then the income is not taxable.
- If the company undertakes trading activity (including banking, insurance, management, licensing, shipping, consulting, as well as any other non-trading activity that is not Labuan), then the income is taxable at 3 % based on audited accounts or MYR 20, 000.
- Tax forms must be filed within 3 months from the beginning of the year of assessment.
Double Tax Treaties
- Labuan companies can benefit from the double tax treaties that have been concluded between Malaysia and other jurisdictions.
If you are interested in incorporating a company in Labuan, you can get in touch with our corporate team.