Frequently Asked Questions about Labuan company formation
Does Malaysia have any double tax agreements in place?
Yes, the country has signed double tax agreements with 65 countries.
Do I need to be physically present in Labuan to incorporate the Labuan Company?
No, this is not necessary.
Is a local director or shareholder required?
No. A Labuan Company can be owned by 100% foreign members and appoint 100% foreign directors without prior approval from any authority. The shareholder(s) and director(s) can be the same person. The minimum requirement to incorporate a Labuan Company is with ONE (1) shareholder and ONE (1) director.
What is the corporate tax rate for Labuan company?
The corporate tax rate is 3% on net profits provided the substance requirements are met. Otherwise, it will be 24% on net profits. All accounts must be audited.
Is appointment of the auditor mandatory?
Yes, it is mandatory. Auditors are required to inspect the accounting records and to calculate the corporate tax payable to Inland Revenue.