A Labuan company is an entity incorporated in Labuan to do any trading or non-trading activity. Trading activity can be an activity which is licensed by the Labuan Financial Services or any normal trading company involved in international business. A non-trading company is an investment holding company.
As of 1 January 2019, trading companies who are licensed by LFSA are entitled to 3% tax. Normal trading companies are not entitled to tax benefits.
On the other hand, Labuan Other Trading Entities are entities / companies that are eligible to 3% tax and they are Labuan entity that carries on any one or more of the following business activity:
- administrative services;
- accounting services;
- legal services;
- backroom processing services;
- payroll services;
- talent management services;
- agency services;
- insolvency related services;
- management services other than Labuan company management
Other advantages of having a Labuan company includes:
- Low tax regime
- NO requirement for Malaysian nationality
- NO requirement for company directors to reside in Malaysia
- NO need for foreign currency accounts or remittance licenses
- Not subject to the Forex Exchange Policy when your company deals with foreign currencies other than MYR (Ringgit Malaysia)
