A Labuan Company:
- May be a company limited by shares or by guarantee or an unlimited company.
- May participate in business activities and enjoy attractive tax benefits provided under the Labuan Business Activity Tax Act 1990 (LBATA).
- May carry out any business that is lawful in Malaysia in, from or through Labuan.
- Would need to be licensed if it intends to undertake specific businesses as defined under the Labuan Financial Services and Securities Act 2010 or Labuan Islamic Financial Services and Securities Act 2010 such as banking, insurance/insurance-related, fund management, leasing, factoring and company management.
Residents and non-residents of Malaysia are permitted to establish Labuan companies. Section 7(5) of the Labuan Companies Act 1990 (LCA) allows Labuan company to deal with a resident subject to the filing of notification to Labuan FSA within 10 working days of the transaction.
The business transactions of Labuan companies must be in currencies other than the Malaysian Ringgit, except for the purpose of defraying administrative and statutory expenses as well as receiving fees and commissions.
Labuan companies can own controlling stakes in a Malaysian domestic company and are also allowed to undertake shipping operations with non-residents.
Characteristics of a Labuan company:
- It must have at least one director.
- It must have a resident secretary.
- There is no minimum capital and no authorized share capital requirements.
- The shares issued shall have no par or nominal value.
- Treasury shares are allowed.
- It may issue shares of different classes and of different rights, but no bearer shares are allowed.
- Amalgamation by merging two or more companies into one is allowed.
- It is a requirement to have a registered office in Labuan which is the office of the resident secretary.
- No person may divulge to others any information concerning the shareholding, management and any business, financial or other transactions of a Labuan company.