Often most foreigners confuse the type of business entity in Malaysia they should own when starting a business in Malaysia. Basically, there are two commons entities which widely adopted by foreigners and this also depends on the nature of their business for license eligibility. For those intending to set-up shops, restaurants in Malaysia, setting up the local Malaysia Sdn Bhd company is ideal as this type of business nature required permission from various local government departments and the local town council for various types of licenses to operate.

With effective 1st Jan 2019, the new tax rate will be 3% for Labuan Trading Company trading with Malaysia companies or residents with the requirement to report the transactions with the Labuan Authority. Pure investment holding company, the tax rate remains unchanged at zero while investment holding company on Intellectual Property attracts a new tax rate of 24%.

Below is the table of information outlined in the comparison of Labuan Company and Malaysia Sdn Bhd for import, export, advisory, trader, consultancy and advisory business.