Labuan Company for Your Tax Efficiency
Labuan jurisdiction is ideal for your corporate tax efficiency! It is gaining momentum on it’s popularity among the businessmen in Asia due to it’s suitability as a tax efficient ‘ profit center’ for international business activities ranging from trading, investment, financial services to personal wealth management. Labuan company for your tax efficiency outlined the key advantages of having a Labuan trading company and why choose Labuan jurisdiction. Labuan Company for Your Tax Efficiency
With easy and freely flow of tax information of CRS by OECD, tax collectors are interested in trading company located at offshore jurisdiction, at such business owners must seek highest protection and evaluate carefully choosing the right venue with affordable costing before setting their trading company.
Below is the unique features of Labuan trading company help to navigate the new tax landscape to suit the international tax structure to avoid unpleasant tax consequences:
Labuan Company tax rate for trading activities is straight forward with a choice to choose tax rate of 3% on audited profit or pay RM20,000 with management account.
Proximity makes sense!
Labuan company is a sensible choice for trading within Asia Pacific due to it’s proximity of location to the growing consumer spending in Asian economies. A trading company located a long distance from it’s markets more likely to attract interest of tax collectors. A trading company located in the same region as it’s market is justifiable act as indicator to support the business purpose.
Good local infrastructure available!
Malaysia ranked one of the top 23 country in ease of doing business in 2017. Labuan being part of Malaysia with good infrastructure with advanced banking and insurances services able to support with competitive rates to meet the needs of Labuan companies with for real functionality. Tax collector will soon catch up with trading company that has no real operational substance in place. Find out what is the CRS solutions for Labuan Company!
Affordability with flexible in expansion!
Malaysia superb quality of life, it’s range of services, rental and it’s ever growing human resource pool, Malaysia provides better value for money than any other Asian jurisdictions. These attributes are added advantage to Labuan company where it can easily start and spread their wings when the business grows at any one time.
Dual tax protection is possible!
Malaysia has vast network of tax treaty with over 70 countries where a Labuan company can tap into and obtain a degree of protection, which is not available for trading companies located in BVI, Seychelles and Cayman where their tax treaty network is weak.
Highest level of control exercised！
Labuan company can have the option to irrevocable elect tax residency to be taxable according to the Malaysia local Income Tax Act 1965. By doing so, Labuan company is paying the local rate of 24% which is same rate as any foreign owned local Malaysia Sdn Bhd company. This will make Labuan company subject to the highest being exercised in Malaysia with same status as Malaysia local Sdn Bhd company governed by Companies Commission of Malaysia (ssm.gov.my). With permanent ITA tax election, the advantage is Labuan company can access to full list of Double Tax Agreements of more than 70 Malaysia tax treaty partners worldwide!
Clarity without disputes on tax!
Malaysia, Singapore and Hong Kong are the possible offshore jurisdictions located within Asia Pacific rim that an investor can chose. Singapore and Hong Kong companies often has disputes with tax collectors on whether the trading activities are onshore or offshore that require activities justification on yearly basis, hence this attract high cost of operations. Such disputes does not happen to Labuan Company who is strictly an offshore entity with business activities in, out and through Labuan with offer low tax with choice of either 3% or pay flat fee of RM20,000 with permissible multiple activities within the company as long as it deals in non-ringgit currency with non-Malaysia residents.
Labuan Company is also permissible to deal with Malaysians, with a tax rate of 24%. The accounting books have to clearly separated for Malaysia non-residents and residents transactions in a single audit report for dual dealings. Labuan Company for Your Tax Efficiency
Tax status undisputable!
Labuan company can also further be established it’s tax status by obtaining the Malaysia Tax Residency certificate from Inland Revenue Board. This will ascertain all incomes earned are taxed in Labuan. Labuan company can opt to apply for yearly for Corporate Tax Certificate from Labuan Inland Revenue Board to validate their tax status in Labuan.
Goods and Service Tax is not applicable for Labuan company dealing in Labuan and Langkawi Island with any companies situated in these designated areas. This exemption will also include all transactions outside of Malaysia. Labuan Company for Your Tax Efficiency
No Withholding Tax
Labuan company payment to non-residents on interest, dividends, royalties and technical fees attract no withholding tax. Dividend paid to Malaysia domestic companies or individual shareholders of a Labuan company will tax exempt.
No Sales Tax
All goods trade by a Labuan company is not subject to any Sales Tax.
No Inheritance Tax and No Gift Tax
In Malaysia including Labuan, there is no inheritance tax and gift tax between family members for estate planning. If the gift involves real estate or shares in real estate company, the Real Estate Property Gain Tax may apply. Labuan Company for Your Tax Efficiency
No Stamp Duty
Stamp duty are exempted for all instruments including transfer of shares of Labuan Company. Labuan Company for Your Tax Efficiency
No Indirect Tax
Labuan is free duty island with no indirect tax such as sales tax, import duties, surtax, excise duties and export duties. Labuan companies are welcome to use Labuan ports to export and import their goods.
Personal Income Tax special treatment!
* No tax on all director’s fees for foreign director- individual or corporate director
* 50% on tax rebate for expatriate employment of managerial position
* Malaysia employees enjoy 50% tax rebate on all allowances including housing
* 65% on tax rebate for professional individual providing accounting, legal and financial services.
Expatriate work permit easily available!
Labuan company is permissible to apply for two(2) years multiple entry work permit visa from Labuan FSA and Labuan Immigration Department for their Directors and Managers to run the businesses as their expand. Labuan work permit is extendable to their family members including spouse, children and parents and it is renewable.