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. 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:
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 Services||Wealth Management||Businesses||Structures|
|Banking||Foundation||Trading Company||Labuan Company|
|Mutual Fund||Trust||Investment Holding|
|Money Broking||Private Trust Company||Shipping||Partnerships LLP/LP|
|Fund Management||Custodian||Trading Company|
12 key advantages of Labuan for affordable operation!
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:
- Office space set up
- Business center secretarial service
- Human resource hiring
- 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!
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