Company registration in Labuan - YB Case 2023

Company registration in Labuan

Company registration in Labuan

Labuan is one of the largest federal territories of Malaysia. It is located in the South China Sea, northwest of Borneo island. Labuan`s area includes 1 large and 6 smaller islands.
Today, this jurisdiction is an actively developing Asian International Business and Financial Centre with a stable circulation of financial flows of Malaysia, the Philippines and the Sultanate of Brunei. The strongest sectors of economy are: banking, financial and insurance services, tourism, oil and gas industry, food industry.
Setting up a company in Labuan can be a good idea both for launching a startup and for a business expansion.

Business advantages

If you are interested in registering a company in Labuan and opening a corporate account in Labuan bank, then here you can take a look at the main advantages of this jurisdiction:

  • Labuan is a part of Malaysia with the 3rd greatest economy in South-East Asia;
  • Malaysia ranked 23rd place on competitiveness in the world;
  • Free Trade Zone and a Free Port;
  • High quality of life;
  • Favorable climate for investment and development of small and medium-sized businesses;
  • Skilled labour;
  • Highly developed banking system (more than 60 financial institutions located in Labuan);
  • 68 DTAs with Switzerland, Belgium, Canada, Australia, Czech Republic, Germany and others;
  • Flexible taxation system.

Legal forms

If you want to set up a company in Labuan remotely you should know that there are only two business types allowed in this jurisdiction: Trading and Non-trading companies.

You can open a Trading Company choosing such business spheres as: import and export operations, banking, financial and consulting services, etc.

And if you want to open a Non-Trading company, you can give preference to dealing with shares, investment, deposits and the like non-trading instruments.

Regulator`s conditions

In the first case, if you want to register a Trading Company in Labuan, you will need to meet the following conditions of the Regulator:

  • Minimum 1 director and 1 shareholder of any nationality (individuals or legal entities);
  • Minimum paid up share capital – 1 USD;
  • Statutory audit for all accounts of the company;
  • No trade license requirements;
  • No requirements for resident director, shareholder or manager;
  • No local registered office requirements.

And, in the second case, if you would like to open a Non-Trading Company in Labuan you should meet all the above conditions, except the statutory audit.

Tax rates

Entrepreneurs, who are planning to register a company in Labuan and open a business account in Labuan bank should know that non-trading companies in Labuan are exempt from the income tax. Also, trading companies are subject to 3% income tax on annual net profits.

As for the other taxes, there are no requirements for:

  • VAT;
  • Custom duties;
  • Stamp duties;
  • Withholding taxes on dividends, interest payments and royalties.

How to open your own business in Labuan

If you are interested in registering a company in Labuan remotely, it is advisable to order legal advice from a competent specialist. YB Case experts can offer you a full range of legal services including: legal advice on opening a corporate account in Labuan, due diligence of the jurisdiction selected for business, legal assistance in preparing documents and much more.
The registration process usually takes 7 days.

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