CRS Solutions For Labuan Offshore Company

With CRS (common reporting system) already kicked in, all offshore jurisdictions will be affected. CRS requires sharing of financial and ownership data by the financial institutions with one another. So what are the available CRS solutions for Labuan Offshore Company? Although the dominant purpose of CRS is to combat tax evasion, it may affect your presence in a particular jurisdiction where you set up your business entity. For example, if you claim to be doing business in one jurisdiction but your actual substance in the jurisdiction is generally not in line with your business performance, you may be suspected. As such, every businesses in Labuan jurisdiction will need to consider a CRS solution. 

The CRS solution is to justify to Tax Department basically that you are having the appropriate commercial substance for your business.  The business operating substance serves to validate their business’ presence in that particular jurisdiction. For example, if you own a BVI company, your office including banking, meetings, staff employment should operate from BVI. For Labuan jurisdiction, we glad to outline the CRS solutions for Labuan offshore company for your better understanding. Six (6) key elements of commercial substance for tax proofing your Labuan set up which the Tax Department would like to see:

Permanent Office
Local Employment
Key Management Decisions are Made In That Jurisdiction
Payment of Taxes
Annual Compliance In Order
Bank Account Location In That Jurisdiction

There are factors that make creating your commercial substance in certain jurisdiction more challenging than the others. Therefore, you will find out that not every jurisdiction has the same advantages or efficiencies in creating commercial substance. Here are three (3) major concerns about CRS solutions:

  • Too far or a long distance to travel or fly for meetings and managing operations in cases of Cayman, BVI, Seychelles jurisdictions where it is generally isolated from major flight routes.
  • Too expensive or costly to maintain commercial substance for a jurisdiction like Mauritius, Hong Kong, and Singapore. It is not cost efficient to relocate certain operations to these jurisdictions because you can do it cheaper elsewhere.
  • The time difference can also be an added stress to the management on top of managing the operational substance.
  • One possible disruption would be discontinued banking facilities in your jurisdiction

 

Many companies uses banking facilities in other jurisdictions for their business needs. There will be a chance that their banking account in other jurisdictions, may  attract closure in the future. This is because it is fit and proper for their bankers to commit their clients to to meet their CRS and internal compliance policies. In cases where the companies is just operating a banking account in a jurisdiction other than its registered jurisdiction, these companies will be first to called to comply with CRS or face bank account closure.

Apart from the bank closure of banking facilities, the tax Department of your jurisdiction, may not issue Corporate Tax Certificate should the substance criteria is not fulfilled. This certificate is crucial for corporations to proof their fulfilment of their tax liabilities. In summary, while companies want to fulfil their required substance requirements because of CRS implementation, there are challenges that they may face and these are real challenges that can severely disrupt their business operations. 

Many companies have relocated to Labuan and part of the reasons is that Labuan jurisdiction itself can easily fulfil the substance requirements. For a start, it is having the advantage of being  in a perfect location in Asia. This location is well suited for cross border businesses and it has a lower cost of operation, strategic location with full infrastructures readily available. Complete solutions in one place! Let’s take a closer look at what Labuan Jurisdiction has to offer! 

Financial ServicesWealth ManagementBusinessesStructures
BankingFoundationTrading CompanyLabuan Company
Mutual FundTrustInvestment Holding

Protected Cells

Money BrokingPrivate Trust CompanyShippingPartnerships LLP/LP
Securities ManagementTrusteeInsurance 
Fund ManagementCustodian Trading Company 
Credit Token   

12 key advantages of Labuan for affordable operation!

Labuan is a white-list OECD compliant jurisdiction recognized by exchanges like HK, SGX and Australia
Labuan Jurisdiction provides all vehicles for all types of businesses you need in one place!
Labuan Jurisdiction allows 100% foreign ownership!
Labuan is low tax jurisdiction of 3% (subjected to substance requirements)
Labuan is a midshore jurisdiction that allows you to tap into the Malaysian local market!
Labuan is a jurisdiction allows on shore and off shore bankers in Malaysia!
Labuan jurisdiction permits application of work visa for companies to hire expatriates and their families to stay in Malaysia!
Labuan jurisdiction permits setting up of marketing office in main cities of Malaysia like Kuala Lumpur and Iskandar Johor with Labuan as the management office!
Labuan entities able to get Tax and Good Standard Certificates and it is fully compliant with Annual Return and Tax Filings!
Labuan is located within Asia Pacific where most time zones are similar and easy to travel between!
Labuan offers full tax exemption for profit dividend pay to shareholder and directors fee!
Labuan is fully exempted from Sales Tax, Service Tax, GST and Withholding Tax!

So how much does it cost to set up a substance @ Labuan?

Office Rental (50-300 sq ft.)RM300-RM800
Graduate Basic Salary (per month)RM1200
Experienced Basic Staff (per month)RM2000
Telephone & Electricity (per month)RM150-RM200 
Air Ticket from KL to Labuan (return)RM300-RM400

We provide complete CRS solutions for Labuan offshore company to assist you to comply with the current CRS guidelines to kick start your office operations in Labuan as follows:

  1. Office space set up
  2. Business center secretarial service
  3. Human resource hiring
  4. Billing assistance. 

 

Validate your business with engaged office space @ Labuan! Being our clients, we will help you to get started easily with an affordable solution at the point of incorporation of your Labuan Company! With the valid address in Labuan, bankers will be confident to build a

Start your new Labuan Company set up or have your current company to re-domicile to Labuan. We work both ways. Feel free to send us your inquiry for better advice to meet your business objectives in Malaysia. We provide a “One Labuan Platform” service to simplify your investment in Labuan!

Name

Email

Nationality

Product/Services You Intend to Sell

Target Market
Malaysia OnlyWorldwide

Capital Amount

Company Structure (present or intended)
100% Foreign-OwnedJoint-Venture with Malaysian

Do You Intend to Set Up Physical Office/Shop in Malaysia?
YesNo

Do You or Your company Require Expatriate Visas?
YesNo

Other Info You Need Us To Know

My contact number in Malaysia:

Trade Without Barriers

Tap into ASEAN Market Through Labuan

Labuan Blockchain and Crypto

Labuan Wealth Planning

Labuan Businesses

Labuan Tax Matters

Simplifying Complexities

Property Investment

We are offshore and onshore business advisory expert to assist you in your business set up in Malaysia!

Get advantage being our clients to have free to access for complete advise from us on latest regulations, updates and requirements for your business and residency opportunities in Malaysia anytime, anywhere!

For everything about business investment in Malaysia for foreigners as well as onshore business business expertise, check out our complete information at www.MalaysiaBizAdvisory.com