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Labuan

Labuan

Executive Summary:
The Government sees Labuan's future in terms of its financial sector, and in 1990 created the Labuan Offshore Financial Services Agency (although 'Offshore' has since been dropped from the title) alongside a batch of 'offshore' laws. Labuan companies can make use of Malaysia's extensive double tax treaty network, and as a result the island has become a preferred conduit for FDI to a number of ASEAN countries.

A stock exchange was established in 2000, aiming particularly at the listing of Islamic financial debt issues, and has had considerable successes.

Malaysian taxes are moderately high, although on a territorial basis, but Labuan offshore companies engaged in trade pay 3% tax or can elect to pay a fix sum of RM20,000 (approx. US$6,500); all other offshore companies are exempt. There are many incentives and exemptions which make it possible for most mainland Malaysian profits to be repatriated through Labuan without tax. Many expatriate workers can take advantage of personal tax incentives.

LOFSA is determined that Labuan should become a successful e-commerce hub, and has built e-commerce infrastructure which can be used by incoming e-commerce operations, as well as by the island's new financial markets.

Country:
Labuan
Region:
Asia-Pacific
Currency:
US dollar (USD) (US$), Malaysian Ringgit (MYR) (RM)
Languages:
English, Malay, Chinese, Tamil
Time Zone:
UTC +8
Phone Code:
+608
Communications:
Very Good
Formation Cost:
3200 - 4600 USD$
Formation Time:
1 - 2 days
Maintenance cost:
2200 - 2800 USD$
 

Suitable for:

  • Wealth Management,
  • Wealth Management,
  • Banking, Insurance,
  • Fund Management,
  • Shipping,
  • Aviation,
  • Trading Goods,
  • Trading Financial,
  • Intellectual Property/Licensing,
  • Holding Companies

Vehicle Types:

  • Limited companies,
  • public limited companies,
  • branches,
  • trusts,
  • foundations,
  • general partnerships,
  • limited partnerships and protected cell companies

Capital primary business districts:
Labuan Town, Kuala Lumpur

Good Relationships:
China, India, Indonesia, Japan, Malaysia, Singapore, United States

Bad Relationships:
Cuba, Iran, Korea (Democratic People's Republic of), Libya, Somalia

Tax Burden - Business:
Very Light

Tax Burden - Individual:
Light

Headline tax rates:
CIT 25% (offshore trading company 3%; non-trading 0%), PIT 26%, VAT 0%

Treaty Jurisdictions:
Albania, Australia, Austria, Bahrain, Bangladesh, Belgium, Brunei, Canada, China, Croatia, Czech Republic, Denmark, Egypt, Fiji, Finland, France, Hong Kong, Hungary, India, Iran, Ireland, Italy, Jordan, Kazakhstan, Korea, Republic of, Kuwait, Kyrgyzstan, Laos, Lebanon, Malta, Mauritius, Mongolia, Morocco, Myanmar, Namibia, New Zealand, Norway, Pakistan, Papua New Guinea, Philippines, Poland, Qatar, Romania, Russia, San Marino, Saudi Arabia, Singapore, Sri Lanka, Sudan, Switzerland, Syria, Taiwan, Thailand, Turkey, Turkmenistan, United Arab Emirates, Uzbekistan, Venezuela, Vietnam, Zimbabwe

TIEA Jurisdictions:
Bermuda

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