How to incorporate a company in Malaysia through a Labuan company
For most of our Clients who are interested in doing business from Malaysia, Healy Consultants Group PLC recommends entering the market through a Labuan company to ensure a straightforward incorporation process that can be completed in four weeks. Our Client will not be required to travel during the engagement as our local representative will complete all mandatory steps from A to Z.
Consequently, the steps for starting business in Malaysia through a Labuan company include:
- Consultation: Following personal meeting or conference call, Healy Consultants Group PLC and the Client agree upon the following: i) specific business activity and license requirements; ii) target company names and their availability, and iii) share capital requirements;
- Name reservation: Once formally engaged our dedicated Labuan relationship manager will conclude a business name search with the Labuan Companies Registrar (IBFC) and reserve several options in order of preference. If available, we file name reservation Form 9 and settle the reservation fee of RM50;
- Document preparation: As a next step our team prepares i) Memorandum and Articles of Incorporation; ii) Declaration of compliance Form 6; and iii) director/shareholder consent Form 24. In addition, we prefill all other required forms and email them to our Client for their e-signature. The Government fees for form submission amounts to RM6,000;
- Company Incorporation: Once signed and received, we submit the same to the IBFC in order to complete the incorporation of the new company. The company is registered within eight business days, after which we email the certificate of Incorporation (COI) to our Client.
- Tax registration: Following company formation, Healy Consultants Group PLC registers our Client’s Labuan company for tax by completing and submitting Form CP600C with the Inland Revenue Board;
- Corporate bank account opening: Once above is completed, we open a local Malaysian corporate bank account with our Client’s preferred local or international bank. Thereafter, Healy Consultants Group PLC and our Client agree upon and courier the original corporate bank account forms to the company’s agent in Labuan. We work with internationally recognized banks including Standard Chartered, DBS and local banks such as Maybank and CIMB. Immediately after bank account opening, our Client deposits the initial share capital of the company;
- Internet banking activation: After receipt of corporate bank account number, we request the bank to activate internet banking and issue tokens to the company’s directors. We expect this process to be completed within a business week;
- Support services: Upon our Client’s request, our team can supply various support services, including i) securing multiple employee visas; ii) locating office premises; and iii) registering trademarks;
- Engagement completion: Labuan incorporation engagement is considered as completed. We courier a company kit to our Client, which includes the company’s original corporate documents, unopened bank correspondences and a Client feedback survey.
- All Labuan companies can lease office premises in Kuala Lumpur and/or Iskandar Malaysia, Johor Bahru;
- As per the LBATA Amendments 2019, a Labuan company can now issue sales invoices to Malaysia customers and conduct sales in Malaysian Ringgits as well.Moreover, all other global income can be booked in the Labuan company;
- All Labuan trading companies dealing with Malaysia resident companies are subjected to pay corporate taxes at the rate of 17% for chargeable income below MYR 500,000 and 24% for incomes above this threshold;
- All Labuan companies can secure Malaysia employment visas for staff. The number of staffs in the Malaysia Marketing Office should not exceed four;
- All Labuan companies must always secure and maintain an office space in Labuan, if they plan to hire expatriate staff;
- In addition to the annual Labuan Government fees, an annual fee of MYR7,500 will be payable to the Malaysia Government.
Work permit considerations
- To be eligible for Malaysia work permit, the employee of a Labuan company must be one of the following:
- Top managerial officer e.g. Managing Director, Principal Officer;
- Executive Officer, Chief Financial Officer, Chief Operating Officer;
- Middle management e.g. Manager, Assistant Manager;
- Professional e.g. Accountant, Lawyer, Consultant, Underwriter;
- Technical expert e.g. IT Specialist or other specialist related to Labuan trading activity.
- The employer must have a valid address in Malaysia;
- The applicant must have the technical and academic qualification, professional certificate or relevant working experience related to the position applied.