Labuan Company Registration

Labuan is a federal territory of Malaysia, located on an island in the South China Sea off the eastern coast of the country. In October 1990, the Malaysian government declared its intention to develop Labuan into an international financial center.

As a result, some investors choose to establish companies in Labuan. Malaysia enjoys a strong international reputation and holds membership in key global and regional organizations such as APEC, ASEAN, WHO, IFC, IMF, the United Nations, and the Asia/Pacific Group on Money Laundering.

Additionally, its central location in Asia provides convenient transportation and shared time zones with many neighboring countries. English and Malay are the primary languages, and the official currency is the Malaysian Ringgit.

I. Advantages of Labuan Company Formation

1. 100% Foreign Ownership
   Foreign investors can fully own and control their Labuan-based business without the need for local partners.

2. Favorable Tax Regime
   Companies in Labuan benefit from a fixed annual tax of RM20,000 or a low tax rate of 3% on audited net profits.

3. Simple Establishment Requirements
   Only one director and one shareholder are required to set up a company in Labuan, making the incorporation process straightforward.

4. No Tax on Director’s Fees or Dividends
   Director remuneration and dividend distributions are not subject to Malaysian tax.

5. Tax Exemption for Investment Holding Companies
   Investment holding companies are exempt from taxation and audit requirements in Labuan.

In addition to assisting clients in company formation, Inter Area—a professional service provider—offers comprehensive support tailored to investor needs. This includes document preparation, business appointment coordination, and on-site assistance. Services also cover help with opening bank accounts and connecting clients with certified international accountants and legal professionals for verification and compliance.

 

II. Labuan Financial License Application

Labuan, Malaysia’s international offshore financial center, offers attractive tax incentives that draw numerous businesses and investors. If you intend to establish a company in Labuan for financial-related activities, it is essential to obtain the appropriate financial license from the Labuan Financial Services Authority (LFSA).

Types of Financial Licenses

1. Insurance-Related License

• Types Covered: General insurance, life insurance, reinsurance, and captive insurance

• Applicable Businesses: Companies providing insurance services or managing risk capital through various insurance solutions

2. Fund Management License

• Applicable Businesses: Entities involved in managing investment funds or offering investment advisory and portfolio management services

3. Money Broking and Payment Systems License

• Applicable Businesses: Companies offering digital wallet solutions, payment processing services, or foreign currency exchange operations

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