Formation of A Labuan Company and Tax- An Overview
Totally new to Labuan Midshore Company? Here is the the formation of Labuan company and tax guide for your understanding. The Labuan Company formation is straight forward and it done within 5-7 days upon receiving complete documents from you! There are two main types of Labuan Company structure of either Trading or Non- Trading which differs based on the tax liability and flexibility. All Labuan Companies must transact in foreign currency, not in Malaysia Ringgit.
Formation of A Labuan Trading Company
Labuan Trading Company defined trading activity that includes import, export, trading, consultancy, management, shipping, financial services, banking, insurance or any other business activity other than non- trading activity.
Under the Labuan Business Activity Tax Act 1990, Labuan Trading Company has an option of either paying a flat tax of RM20,000 annually or 3% tax on net profit. All Labuan Trading Companies’ accounts needed to be audited, except if it opted to pay RM20,000 flat rate, only management account is required.
You may also make an irrevocable election to be taxed under the onshore Malaysia Income Tax Act 1967 if you deal with Malaysian companies or residents. The corporate tax rate will be 24% on net profit. All billings have to be in foreign currencies, except Ringgit and yearly audit has to be done for the accounts.
Formation of A Labuan Non Trading Company
A Labuan Non Trading Company is a structure relating to non trading activities as holding of investments in securities, bonds, stock, shares, loans, deposits or any other properties. No tax and no yearly audit, except management account, will be required for annual tax compliance.
Real estate investment in Malaysia hold by a Labuan Company is considered as non trading activity. However, if there is rental income receivable, the company will be subjected to onshore Malaysia Income Tax of 24% with audited report required.
All Labuan Companies shares are issued at par value of your choice with direct allotment. These shares are issued to the shareholders can be an individual, a corporation or holding the shares by your appointed nominee or by a trust. The shares can be of different classes with different rights but non bearer shares are allowed. All shares has to be in denominated in any foreign currency except Malaysian Ringgit.
Depends on your needs, there are three (3) tiers of the shares capital you can choose to form your Labuan Company:
<USD 12,000 (RM50,000)Are you one of the High Risk Jurisdiction Nationality?
<USD 250,000 (RM1 million)
>USD 250,000 (RM1 million)
Most clients will opt for first tier of USD 14,000 for their formation of their Labuan at the initial stage. There will be additional registration fee payable to Labuan FSA will be required for higher tier. At any one time, you can change to higher tier after your Labuan Company is formed.
We specialize in Labuan company formation ranging from simple registration to a more comprehensive structure to your meet your objectives. Feel free to plug on anyone of our support services for your daily operation:
- Advisory on the right entity to match your business nature
- Advisory of company structure to realign to your group objectives
- Advisory on wealth protection and succession
- Advisory on fund raising activities and the structure
- Power of AttorneyView complete Support and Services for Labuan Company, click here!
- Auditor appointment and management
- Annual tax filing and compliance
- Company strike off management
- Accounting services and billing
- Tax Residence certificate
- Daily operation management service for your operation
- Mail management and forwarding
- Telephone answering and forwarding
- Office space solutions and secretarial service
Should you require special service do let us know to specially tailor one for you. We simply “simplify the complexities” your Labuan Company formation to meet your business objectives! Feel free to contact us at email@example.com or call +603 2161 0354.