Labuan Company Formation Service
in Hong Kong
Labuan is a part of Malaysia. As a Federal Territory of the Federation of Malaya, laws of Malaysia government which is based on British common law system applies on Labuan. However, Labuan is one of three tax free islands in the country, all goods sold in Labuan is free of Malaysian tax. New commercial laws has been passed giving strength to Labuan as an international financial centre since 1990s. Nowadays, Labuan is a gateway to the market of greater Malaysia, and the hub of international business.
Labuan or “Labuan IBFC”?
Labuan IBFC, standing for Labuan International Business and Financial Centre, is a brand name to promote the offshore financial service sector in Labuan. Labuan IBFC is under the administration of Labuan government. It is not a physical address.
The territorial flag of the Federal Territory of Labuan (a Federal Territory of Malaysia)
| Official Language: | Bahasa Malaysia, English |
| Legal System: | British Common Law (as Federal Government of Malaysia) |
| Currency: | Malaysian Ringgit (RM / MYR) |
| Time Zone: | GMT +8 |
| Government: | Federal Territory of Labuan (one of the 3 Federal Territories of the Federation of Malaya) |
| Offshore Company Regulatory: | Labuan Financial Service Authority |
| Offshore Company Entity: | Company limited by shares (commonly known as “Labuan company”) |
Labuan Company
Two tax systems
Incorporated under Labuan Company Act, Labuan companies are also under the ruling of Labuan Business Activity Tax Act (LBATA). LBATA is designated for attracting non-Malaysian capital (i.e. any currency other than MYR) to construct their international business, so it offers attractive tax benefits to Labuan companies:
- Zero tax when it is doing “investment holding” business; OR
- 3% profit tax on its annual audited account when it is a “trading” company dealing with non-Malaysian entities; OR
- Flat fee of RM20,000 when it is a “trading” company dealing with non-Malaysian entities, but audited account is exempted;
Tax benefits by LBATA is huge. To prevent tax avoidance, LBATA rules that Labuan companies can deal with Malaysian entities if and only if these Malaysian dealings are conducted in non-RM and are taxed under the Malaysia Income Tax Act (ITA), profit tax rate is 24% of audited profit.
Compulsory reporting on dealing with Malaysian
When Labuan company deal with Malaysian entities, it needs to report to Labuan FSA after the transaction is made whether the deal is profitable or not. When the Labuan company has reported deals with Malaysian, it is required to to prepare audited, and the profit sourced from Malaysian entities is subjected ITA tax rate.
Self-election to ITA
Labuan companies can voluntarily make tax election under ITA. If the election is made, it will permanently lose the tax benefits under LBATA, but it will enjoy:
-
- Access to Malaysia’s double taxation agreement network of more than 70 countries including Germany, India, Australia, Japan, United Kingdom, Netherlands, Sweden, Luxembourg, Chile, Indonesia, South Africa, Spain, South Korea, Hong Kong, and mainland China.
Starting offshore financial service
Labuan company can apply for Labuan’s financial service-related licenses such as banking, insurance, factoring, money brokering, securities, fund management, and leasing.
Labuan bank account
| Internet Banking | Initial Deposit (USD) | Physical Presence is required? | |
|---|---|---|---|
| Kuwait Finance House | Yes | 5,000 | No |
| Maybank International | No, only Telegraphic Transfer through fax or email | 25,000 | No, requires signature sighting by MBB-Officer in any branch |
| Public Bank | Yes | 10,000 | No, require signature sighting by the bank’s officer in any branch |
| Ambank | No, only Telegraphic Transfer through fax or email | 10,000 | No |
Requirement
- Minimum one director and one shareholder, director and shareholder can be the same person.
- Corporate directors and shareholders are allowed.
- Nationality (or place of incorporation) of directors and shareholders are not restricted.
Service Scope
- Labuan “Investment Holding” Company incorporation
- Labuan “Trading” Company incorporation
- Labuan incorporation handling
- Local company secretary
- Local registered office address
- Accounting and taxation optimization relating Hong Kong company
Service Fee
Our service fee is based on the combination of 2 factors:
- Time spent
- Level of expertise required
We can incorporate Labuan companies based on your preference. Please contact us to make an appointment, we are glad to provide free initial consultation for you.
We accept payment by
Earn HK$2,500 credits
Earn HK$2,000 credits
Earn HK$500 credits
Earn HK$250 credits