A gateway to international markets, wealth and corporate opportunities globally.
Labuan Company
A Labuan company is a business entity incorporated under the Labuan Companies Act 1990 and governed by the Labuan Financial Services Authority (Labuan FSA). Labuan companies are primarily designed to support international business, offering a tax-efficient and flexible platform for holding, trading, and financial operations.
Benefits
Low tax regime (0% for non-trading entities OR 3% of audited net profits for trading entities)
No withholding tax on dividends, interest, or royalties
Access to more than 70 double tax treaties (subject to the Economic Substance Requirements)
Ease of incorporation and minimal regulatory burden
Re-domiciliation possible from and to other jurisdictions
Cost-effective compared to onshore companies
Labuan companies are broadly categorized as:
1. Trading Companies – Actively engaged in business involving buy and sell.
2. Other Trading Companies – Offering services involving administrative, accounting, legal, backroom processing, payroll, talent management, agency and management services.
3. Non-Trading Companies (Holding Companies) – Passive entities that hold investments such as shares or real estate outside Malaysia.
Economic Substance Requirements
Under Section 2B of the Labuan Business Activity Tax Act 1990 (LBATA), a Labuan entity must have adequate full-time employees and operating expenditure in Labuan to enjoy preferential tax rates; otherwise, it will be taxed at 24% on net audited profits.
Comparison: Labuan Company vs Local Company (Sdn Bhd)
Head Office
Unit Level 11(A), Main Office Tower, Financial Park Labuan, Jalan Merdeka, 87000 FT Labuan, Malaysia
Marketing Office
19A-25-1, Business Suite, UOA Centre, No.19, Jalan Pinang, 50450 FT Kuala Lumpur, Malaysia
