Offshore Labuan

Open offshore in Labuan

Labuan is a province of the state of Malaysia and consists of several islands located in the South China Sea. Main city – Bandar-Labuan, monetary unit – Malaysian ringgit.

In 1990, an international offshore financial center was established in Labuan and the law on offshore companies was passed. In recent years, this region has become popular with foreign businessmen. Offshore Labuan is attractive primarily for investment purposes. Malaysia has the most double tax treaties in the world and is therefore often used as a vehicle for transnational investment from Europe to Asia. The Labuan Business Tax Law is OECD compliant.

As an offshore area, the zone is in demand for the creation of banks, trusts, insurance, leasing companies. Ukraine does not have an agreement with Malaysia on the exclusion of double taxes, Labuan is on the "black list" not included.

Types and legal forms of companies in Labuan

There are two types of companies in the country, the choice of which determines the tax regime:

• Trade;
• Non-trade.

The difference is that trading companies are subject to taxation.

The Malaysian legislation provides for the following forms: offshore companies; offshore partnerships; trusts; foreign companies; branches; closed companies with limited and unlimited liability, as well as liability that extends to the amount agreed by the shareholder; public limited companies.

Offshore companies can be 100% foreign owned. It is allowed to carry out any activity not prohibited by law, banking and insurance require a license. It is forbidden to carry out any operations related to oil and gas products, as well as maritime cargo and passenger transportation. Offshore companies are prohibited from carrying out transactions in national currency, with the exception of – payment of administrative fees.

Taxes and reporting

If an entrepreneur decides to open a business in Malaysia, it is advisable to do this in Labuan. There are no taxes on goods and services, on goods and services, on interest, dividends, capital gains in the province. Non-trading companies do not pay income tax, for trading – the rate is RM20,000 or 3% on net income.

All legal entities are required to submit an annual financial report. Local auditor certification may be required.

If you have any questions regarding business registration in Labuan – Crystal Tax specialists are always ready to answer them. With us, you can easily buy an offshore company or register a bank account. Call. We will be glad to help you.