Overview of Labuan International Business and Financial Centre (IBFC)
Labuan, a Federal Territory of Malaysia, is an island off the coast of Sabah in East Malaysia. It is emerging as a prominent financial hub in Asia, thanks to its pro-business regulations, low taxes, and adherence to international standards of due diligence and transparency. Labuan IBFC offers an attractive tax regime for companies conducting certain business activities with economic substance in Labuan.
Benefits of Incorporating in Labuan
Tax Incentives:
Concessionary Tax Rate: Companies engaged in qualifying business activities in Labuan are eligible for a 3% tax rate, compared to the standard Malaysian tax rate of 24%.
Qualifying Activities: Include insurance and reinsurance, takaful operations, banking, trust company operations, leasing, fund management, securities licensing, company management, and more.
Business with Malaysian Residents: Transactions with Malaysian residents may be subject to a 24% tax rate and limited deductibility of expenses.
Qualifying Business Activities for the 3% Tax Rate
Insurance and Reinsurance:
Labuan insurer, reinsurer, takaful operator, retakaful operator
Labuan underwriting manager, insurance manager, takaful manager
Labuan insurance broker, takaful broker, captive insurer, captive takaful
Banking and Financial Services:
Labuan bank, investment bank, Islamic bank, Islamic investment bank
Labuan trust company, leasing company, Islamic leasing company
Labuan development finance company, Islamic development finance company
Labuan building credit company, Islamic building credit company
Labuan factoring company, Islamic factoring company, money broker, Islamic money broker
Labuan fund manager, securities licensee, Islamic securities licensee, fund administrator
Labuan company management, Labuan International Financial Exchange
Self-regulatory organization, Islamic self-regulatory organization
Other Services:
Holding company, administrative, accounting, and legal services
Labuan Limited Company Formation Services
Incorporation Services Include:
Government and registration fees (Labuan Financial Services Authority)
Preparation and filing of the Memorandum and Articles of Association (M&AA) with the LFSA
Certificate of Incorporation and LFSA-filed M&AA
Directors’ Declaration and Consent Letters, Shareholders’ Declaration Letters
Share certificates, Subscriber Declaration of allotted share capital
First Board Resolution for the appointment of directors, registered office, and other corporate matters
Certificate of Incumbency for bank account opening
Resident Corporate Secretary services for one year
Registered Office Address for one year
Annual Return filing, updating and lodging directors and shareholders to the LFSA
Email forwarding of correspondence from LFSA, Inland Revenue, and other related bodies
Certified copies of corporate documents delivered via courier
Time to Form a Labuan Company
Pre-Incorporation Documents: Preparation takes 2 to 3 days.
Filing with LFSA: Once signed documents are received, the LFSA takes 3 to 5 business days to issue the Certificate of Incorporation and release the stamped M&AA.
Incorporating a company in Labuan provides significant tax benefits and streamlined administrative processes, making it an attractive destination for international businesses looking to expand in Asia.
For more detailed information or to start the incorporation process, please contact us. We are here to guide you through every step of setting up your business in Labuan.
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