Labuan jurisdiction is ideal for your corporate tax efficiency! It is gaining momentum on its popularity among the businessmen in Asia due to its 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 company and why choose Labuan jurisdiction. Labuan Company for Your Tax Efficiency
With an easy and free flow of tax information of CRS by OECD, tax collectors are interested in trading companies located at offshore jurisdictions. At such business owners must seek the highest protection and evaluate carefully in choosing the right venue with affordable costing before setting their trading company.
Below are the unique features of Labuan company to navigate the new tax landscape to suit the international tax structure, avoiding unpleasant tax consequences:
Labuan company tax rate for trading activities is straightforward with just 3% on audited profit.
Proximity makes sense!
Labuan company is the sensible choice for trading within the Asia Pacific due to it’s proximity to the growing consumer spending in Asian economies. A trading company located a long distance from its markets is more likely to attract the interest of tax collectors. A trading company located in the same region as it’s market is a justifiable act as an indicator to support the business purpose.
Good local infrastructure available!
Malaysia ranked one of the top 24 countries in ease of doing business in 2018. Labuan being part of Malaysia with good infrastructure and advance banking and insurance services provide competitive rates to meet the needs of Labuan company for real functionality. Tax authority will soon catch up with the trading company that has no real operational substance in place. Find out what is the CRS solutions for Labuan Company!
Affordability with flexibility for expansion!
Malaysia’s superb quality of life, its range of services, rental and ever-growing human resource pool, provides better value for money than any other Asian jurisdictions. These attributes are added advantage to Labuan company where they can easily start and spread their wings when the business grows at any one time.
Dual tax protection is possible!
Malaysia has a vast network of the 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. Labuan company can apply for the corporate tax certificate to validate their tax status anytime.
Highest level of control exercised！
Labuan company can have the option to irrevocable election to be taxed under Malaysia’s Income Tax Act 1965 (ITA). By doing so, Labuan company is paying the local rate of 24% and the subject the company control at the highest being exercised in Malaysia with the same status as Malaysia local private limited company governed by Companies Commission of Malaysia (ssm.gov.my). With permanent tax under ITA, Labuan company can access to full list of Double Tax Agreements of more than 70 Malaysia tax treaty partners worldwide for tax savings!
Clarity without disputes on tax!
Malaysia, Singapore and Hong Kong are all possible offshore companies located within Asia Pacific Rim. Singapore and Hong Kong companies often have disputed whether the trading activities are onshore or offshore with the tax authorities. Such disputes do not happen to Labuan company who is strictly an offshore entity with business activities in, out and though Labuan with an offer of low tax of 3%.
Labuan Company is also permissible to deal with Malaysians. Due to different tax rates, the accounting books have to clearly separate for Malaysia non-residents and residents transaction. Resident activities attract a tax rate of 24%.
Tax Status Undisputable!
Labuan company can also further establish its tax status by obtaining the Malaysia Tax Residency certificate from Inland Revenue Board. This will ascertain all incomes earned are taxed in Labuan.
Comprehensive Direct and Indirect Taxes!
Goods and Service Tax is not applicable to Labuan company deals with all Labuan entities as well as international businesses outside Malaysia.
No Withholding Tax
Labuan company payment to non-residents on interest, dividends, royalties, and technical fees attract no withholding tax. Dividend paid to shareholders of a Labuan company which can be the Malaysia domestic companies of the exempt dividends received from the Labuan company.
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, decide by the local land office. Labuan Company for Your Tax Efficiency
No Stamp Duty
Stamp duty is exempted for all instruments including a transfer of shares of Labuan company. Labuan Company for Your Tax Efficiency
No Indirect Tax
Labuan is a 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 the tax rebate for expatriate employed in a managerial position
* Malaysia employees enjoy 50% tax rebate on all allowances including housing
* 65% tax rebate for professional individuals 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.