Why Set Up a Labuan Company?
A Labuan company is a flexible business structure designed for both trading and non-trading (investment holding) activities, offering global entrepreneurs a strategic base for international business.
What Can a Labuan Company Do?
Trading Companies
These include any business engaged in international trade or licensed activities under the Labuan Financial Services Authority (LFSA).
✅ Licensed trading companies enjoy a low 3% corporate tax rate.
❌ Non-licensed trading companies are not entitled to tax benefits.
Non-Trading Companies
Typically set up for investment holding purposes — ideal for wealth management or ownership of global assets.
Special Category: Labuan Other Trading Entities (LOTEs)
These are companies that qualify for the 3% tax rate and are engaged in specialised service-based businesses, such as:
Administrative services
Accounting and bookkeeping
Legal services
Backroom processing
Payroll management
Talent and HR services
Agency and representation
Insolvency services
General management (excluding Labuan company management)
Why Choose Labuan? ✅ Low 3% tax regime (for qualifying entities)
✅ Open to foreign ownership – No local shareholder or director required
✅ No residency requirement for directors
✅ Freedom to operate in foreign currencies
✅ Not subject to Bank Negara’s Foreign Exchange rules when dealing in non-MYR currencies
✅ No remittance restrictions or need for special foreign currency accounts
