Labuan company registration


Since 2003, Healy Consultants Group PLC has assisted our Clients with starting their business in Labuan. Our services include i) Malaysia Labuan international company registration; ii) government license registration; iii) business bank account opening; iv) employee recruitment; v) visa strategies and vi) office rental solutions.

Summary table of Labuan company registration

SummaryLegally tax-exempt companyTurnkey solutionMoney broking companyRepresentative officeTrust
Also known asIBCShelf companyForex companyROTrust
Best use of company?International tradingClose a customer deal nowFinancial servicesMarketing & researchAsset protection
How soon can you invoice Clients/sign sales contracts?3 weeks2 weeks8 monthsCannot tradeCannot trade
How soon can you hire staff?3 weeks2 weeks3 weeks4 weeksCannot hire
How soon can you sign a lease agreement?1 week1 week1 week1 weekCannot lease
How long to supply corporate bank account numbers?6 weeks4 weeks8 months6 weeks6 weeks
How long to supply company registration/tax numbers?3 weeks2 weeks3 weeks4 weeks4 weeks
Corporate tax rate on annual net profits?3%3%3%Cannot tradeCannot trade
Limited liability entity?YesYesYesNoNo
Government grants available?YesYesYesNo

Government approval required for foreign owners?NoNoNoNoNo
Resident director/partner/manager/legal representative required?NoNoNoYesNo
Minimum paid up share capital?US$1US$1US$130,000US$1US$60,000
Can bid for Government contracts?YesYesYesNoNo
Corporate bank account location?BNP ParibasCIMB BankCitibankDBSMaybank
Can secure trade finance?YesYesYesNoNo
VAT payable on sales to local customers?Cannot trade locally0%0%Cannot tradeCannot trade
Average total business set up engagement costs?US$12,000Request a proposalUS$31,025Request a proposalRequest a proposal
Average total engagement period?3 months2 months8 months3 months3 months

Labuan company registration summary

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  • Advantages and disadvantages

    Advantages of Labuan company registration

    Labuan business registration advantage

    1. It is possible to register a Labuan offshore company with only 1 director and 1 shareholder, who can be of any nationality. The minimum paid-up share capital required is US$1 and our Clients do not need to travel to complete engagement;
    2. Our Clients enjoy several tax benefits with their offshore company registration in Labuan including:
      • Labuan companies i) enjoy 3% corporation tax on annual net profits but ii) must submit financial statements to independent statutory annual audit
      • Companies conducting non-trading activities, such as holding companies, are exempt from corporate tax in Labuan;
      • There are also no sales tax, VAT, custom duties and stamp duties;
      • Our Clients will not have to pay withholding taxes on i) dividends; ii) royalties and iii) interest payments;
      • Non-resident directors of a Labuan offshore business do not have to pay personal income tax on director fees, unlike non-resident directors of onshore Malaysian companies who have to pay personal income tax on their director fees at a rate of 26%;
      • Labuan based companies can take advantage of Malaysia’s double tax avoidance treaties with 68 countries including Canada, China, India, Singapore, and the United States;
      • Our Clients’ offshore companies in Labuan will not be seen as evading taxes, since Labuan is a CRS and BEPS compliant jurisdiction. Malaysia is in fact listed on the OECD “White list” of jurisdictions that have adopted international standards of transparency and exchange of information between countries.
    3. Businesses in Labuan enjoy easy registration procedures and compliance requirements including:
      • Our Clients do not need a local Malaysian shareholder. One of the advantages of registering a Malaysia Labuan International company is that it can be 100% foreign owned;
      • Our Clients’ personal details remain confidential, as there are no public records of companies registered with the Labuan International Business and Financial Center;
      • Our Clients can be the sole director of their Labuan Company even if they do not reside in Malaysia;
      • There are no trade license requirements for several industries including i) e-commerce ii) import/export and iii) consultancy businesses;
      • Labuan offshore companies can open a marketing office in Kuala Lumpur and Johor Bahru, to i) facilitate meetings with Clients and ii) to build relationships with potential Clients. This enables our Clients to find Clients in Malaysia through a Labuan Company.
    4. Labuan is a well-known financial hub for companies that are willing to enter and expand their operations into the Asian market economy. This is owed to Labuan’s IBFC regime that provides the investors with the added benefit of its modern Shariah-compliant financial infrastructure, thereby enabling the companies to provide finan
      cial services to all the Islamic nations round the world.

    Disadvantages of Labuan company registration

    1. Although Labuan is not blacklisted as a tax haven, Labuan companies still face some discrimination such as:
      • Labuan offshore companies are less reputable than offshore companies in neighboring Singapore and Hong Kong;
      • All Labuan companies are required to have an “(L)” in its name, which is undesirable for Clients who do not wish to reveal that their company was incorporated in Labuan;
      • Some countries including Australia, the U.K, and Japan that have a DTA with Malaysia, have excluded Labuan from double taxation treaty benefits;
      • Under the banking and insurance regimes list of the 2017 OECD BEPS Action Report, Labuan was entered as a jurisdiction having harmful tax practices. The current status of Labuan on this list is in the process of being amended.
    2. Labuan is not an efficient place to do business in Malaysia because:
      • Based on the principal activities of the company, a Labuan company is required to maintain certain number of staff and operating expenditure;
      • A Labuan company cannot open a Malaysian Ringgit corporate bank account. Hence local payments cannot be made or received in the local currency.
    3. It is difficult to register a financial services company in Labuan because:
      • The annual financial license fees can be up to US$30,000;
      • Our Clients will struggle to find and retain talented employees. Because Hong Kong’s and Singapore’s financial industries are ranked the 3rd and 4th best in the world respectively, employees are eager to migrate to these neighboring countries;
      • Malaysian assets held by Labuan companies may not be attractive to foreign buyers. Assets valued in Malaysian Ringgit are likely to lose value, because the Ringgit is a volatile currency.
  • Best uses of Labuan company

    1. Our Clients can conduct business in Asia through a Labuan offshore company because:
      • With a Labuan company, our Clients can open a foreign currency corporate bank account anywhere in Malaysia;
      • Through a Labuan company, our Clients’ can lease Malaysian office premises and secure Malaysia visas for expatriate staff;
      • Labor costs in Labuan are low, as the minimum wage is only US$225 per month;
      • Our Muslim Clients can take advantage of Labuan being a hub for Islamic finance. There are more than 40 Shariah compliant foundations in Labuan.

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Contact us

For additional information on our company registration services in Labuan, please contact our in-house country expert, Mr. Simon Guidecoq, directly:
client relationship officer - Simon
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