Success tips when doing business in Labuan in 2021
- Although English is widely used for business in Labuan, we recommend our Clients to learn a few basic phrases in Malay. “Pleased to meet you” in Malay Bahasa is “selamat berkenalan” and “thank you” is “terimah kasi”;
- Labuanese will be offended if they are called Sabahan. Labuan is no longer a part of Sabah since 1984, and has its own flag and state anthem;
- Business attire in Labuan is formal. Ladies should wear long skirts and always cover their shoulders;
- Clients should be careful about drinking alcohol in Malaysia, as the country is predominantly Muslim;
- Foreign Clients should never bring up topics regarding ethnic relations or the political system in Malaysia;
- Government agencies play an important role in doing business in Labuan. All businesses deal with government agencies on a regular basis, and foreigners registering an offshore business in Labuan should exercise restraint and be patient as much as possible, despite having to potentially deal with extensive red tape, as authorities will always have the final say in any administrative matter;
- As not all local companies are well-versed with international trade, we encourage our Clients to consistently use and sign contracts of service with their suppliers and counterparties during company incorporation;
- When you are starting a business in Labuan, it is important to find out which registrations and licenses apply to your Firm. Navigating this system can be a complex task, as different branches of the government will handle Labuan business registration and licensing for various aspects of your business.
Interesting facts about Labuan
- In 2012, the GDP of Labuan was MYR 3.63 billion (US$1 billion). The main economic sectors that contributed to 94% of the GDP include i) finance and insurance ii) real estate iii) business services iv) manufacturing in the oil and gas industry;
- Since the declaration of Labuan as an international offshore financial center in 1990, it has become a base for more than 6,500 offshore companies and more than 300 licensed financial institutions;
- Labuan’s main trading partners include peninsular Malaysia, India, Sarawak and South Korea;
- In the 19th century, Labuan was a British naval base. The British were interested in Labuan because they wanted to subdue piracy in the South China sea and they thought it could be the next Singapore;
- Labuan has a population of around 90,000;
- English and Malay are the main languages in Labuan;
- Labuan is rich in marine life. It attracts many sport-fishing enthusiasts and scuba divers throughout the year;
- Labuan is one of the safest areas in Malaysia, with a very low crime rate.
Frequently asked questions
Am I required to visit Labuan to open a company there?No. Healy Consultants can legally register your company without you needing to travel.
What is the minimum number of directors required for a start a company in Labuan?Under statutory regulations, a Labuan company requires a minimum of one director.
Is a resident director required?There is no resident director required.
What is the minimum number of shareholders required?A minimum of one shareholder is required.
Can my company be 100% foreign-owned?Yes.
Are shareholder/director details available for public viewing?No.
What are the minimum capital requirements?There is no minimum share capital requirement.
Is a company required to submit an annual tax return and/or financial statements in Labuan?All companies in Labuan are not obligated to submit an annual tax return and offshore companies is required to keep a set of accounting records in Labuan. In addition, companies, which elect to pay RM20,000 (approximately US$6,515), are not required to file financial statements.
What are the tax implications of a Labuan company registration?An offshore company in Labuan is liable to pay either 3% tax on net audited profits, or a fixed sum of RM20,000 (approximately US$6,515). A company, which does not trade, is not required to pay tax.