Malaysia Hotline: +603-2141 8908
Building an offshore company
can be a complicated process, but if you want to reduce the tax burden, this is
also an amazing idea. Many of us don't know that Labuan is a thriving tax haven. Labuan has a
simple and attractive low tax system, its unique tax system allows companies to
achieve cost reduction, and regional operational flexibility also greatly
enhances the convenience of business operations.
Labuan holding companies do
not need to pay taxes and do not need to audit, which saves the company a lot
of company maintenance fees. For industries in trading and service with foreign business, it is also
possible to consider setting up a Labuan trading company to reduce the tax
burden and enhance the international image.
1. Taxation system
The Labuan Company
established under the Labuan Company Law is subject to the Labuan Business
Activity Tax Act (LBATA). According to the Tax Act 1990, Labuan developed a relevant tax system
based on the business activities of its company and divided it into two types:
1.1 Non-Trading Activities
Engaged
in overseas investment holdings or non-trade commercial activities set up
overseas, overseas
investment, holding stocks or bonds or real estate are also belong to this non-trading
company.
1.2 Trading Activities
Engaged
in related commercial activities other than investment holding, such as trading
company, consulting firms, insurance and trust company and other related
overseas commercial activities. This type of business activity is subject to a tax
of 3% of the company's net profit.
1.3 On-Shores Trading Activities
In
order to prevent tax avoidance, LBATA also stipulates that Labuan trades with
Malaysian or foreign companies. This type of commercial activity is subject to
a tax of 3% of the company's net profit.
|
Labuan Companies
|
Business
|
Tax Rates
|
|
Non-Trading
|
Holding company,
investment company, bonds, stocks, foundations
|
No audit required, 0% tax
rate
|
|
Trading
|
Trading company,
consultancy services, banking, insurance, management, licenses, ship
operations
|
3% of net profit
|
|
On-Shores Trading
|
Trading with Malaysia or
foreign companies
|
3% of net profit
|
2. In addition, there are some benefits you don't want to miss:
2.1 100% ownership of
company – foreigners can fully own Malaysian companies;
2.2 No stamp duty, value
added tax, consumption tax, service tax, withholding tax;
2.3 Without foreign exchange
control regulations, ease of fund flow;
2.4 Double Taxation
Agreement (DTA) - you can avoid double taxation;
2.5 Most businesses do not
require a trading license;
2.6 Flexible to operate in Malaysia
or foreign currency bank accounts;
2.7 All directors are not
subject to personal income tax.
The Labuan International
Business Finance Centre in Malaysia has a simple and attractive tax system.
Its flexibility and
low taxation have attracted a lot of foreign investment in Labuan. For investors who want to
enter the Malaysia market, Labuan is definitely your best option.
If you want to invest in or
register a company, Tannet can handle and help you, because Tannet is familiar
with Labuan company registration and can provide you with a practical solution.
For more information, please feel free to call the Tannet service hotline:
603-2141 8908 or email tannetmy@gmail.com, Malaysia company address: Unit 6.06,
Level 6, Amoda 22, Jalan Imbi 55100 Kuala Lumpur.