Labuan is a premier business hub in Malaysia, attracting entrepreneurs from around the globe, particularly in the Asia Pacific region, due to its business-friendly environment and the implementation of the Common Reporting Standard (CRS). Many international business owners seek Labuan Company Registration to take advantage of its numerous benefits.
Types of Labuan Companies
A Labuan company:
- Company Structure: Can be structured as a company limited by shares, limited by guarantee, or as an unlimited company.
- Business Activities: Can engage in a wide range of business activities while benefiting from favorable tax incentives under the Labuan Business Activity Tax Act 1990 (LBATA).
- Operations in Malaysia: Is allowed to operate any business activity permitted in, from, or through Labuan.
- Licensing Requirements: Requires a license if it undertakes specific regulated activities, as outlined in the Labuan Financial Services and Securities Act 2010 or the Labuan Islamic Financial Services and Securities Act 2010. This includes sectors like banking, insurance, fund management, leasing, factoring, and company management.
Eligibility for Establishing a Labuan Company
Both Malaysian residents and non-residents are allowed to establish Labuan companies. According to Section 7(5) of the Labuan Companies Act 1990 (LCA), a Labuan company may engage in transactions with Malaysian residents, provided that Labuan FSA is notified within 10 working days.
Currency and Transactions
Labuan companies must conduct their transactions in foreign currencies, except for covering administrative and statutory costs, or when receiving fees and commissions.
Ownership and Shipping Operations
Additionally, Labuan companies can own majority shares in domestic Malaysian companies and are also permitted to conduct shipping operations with non-residents.
Labuan Offshore Company – Registration Requirements
Under the LCA, a Labuan Offshore Company is required to appoint a trusted company as its incorporation agent. Services provided by this trusted company may include:
- Offering a registered office and resident secretary.
- Handling secretarial duties, such as filing documents required under the LCA.
- Providing trust officers to serve as resident directors or resident secretaries.
Labuan Offshore Company – Key Characteristics
- Directors: Must have at least one director.
- Resident Secretary: Must appoint a resident secretary.
- Capital Requirements: There are no minimum capital or authorized share capital requirements.
- Shares: Shares issued do not have a par or nominal value.
- Treasury Shares: Treasury shares are permitted.
- Classes of Shares: It can issue shares of different classes and rights, but bearer shares are prohibited.
- Amalgamation: Mergers, allowing two or more companies to amalgamate, are permitted.
- Registered Office: It is mandatory to have a registered office in Labuan, which is typically the office of the resident secretary.
- Confidentiality: Confidentiality is maintained, as no person is allowed to disclose information regarding the shareholding, management, or transactions of a Labuan company.