WHAT IS COMPANY MIGRATION OR RE-DOMICILIATION?
Company migration or re-domiciliation occurs when a company undergoes a relocation process from one jurisdiction to another, while retaining its legal identity. The company in its origin country incorporated do not need to go through liquidation process and can be re-domicile to Labuan International Business Financial Centre (IBFC). There is no need to transfer its existing assets and liabilities to a newly incorporated company while we fully recommend to close all banks in the country of origin and to open new bank accounts in Labuan for substance.
WHY SHOULD A COMPANY RE-DOMICILE TO LABUAN IBFC?
There are various reasons for a company to re-domicile to Labuan IBFC. Among them are:
1. Labuan IBFC is a business-friendly legislation.
- It is a well-regulated international business and financial centre conforming to international standards and practices.
- It is based on common law framework.
- Labuan offers comprehensive laws, regulations and guidelines enabling companies to create tailor-made solutions for business needs and growth.
- Labuan IBFC offers simple and easy to understand low tax rate structure
2. Labuan company may establish marketing office in Kuala Lumpur (KLMO) and Johor Bahru.
3. Labuan company may apply and establish co-location office in Kuala Lumpur.
4. Creating tax and economic substance
- Labuan IBFC offers the simplest and lowest tax rate in Asia in which trading companies are taxed at 3% of audited net profit subjected to a maximum tax of MYR 20,000.
- 0% tax on non-trading activities which are Investment holding in nature.
- No foreign exchange control, stamp duty, capital gains tax, inheritance taxes, withholding tax and government services tax (Goods & Service Tax) such or Value Added Tax
- No tax on foreign director’s fee per Income Exemption Order No.7, 2011.
- 50% of the total salary earned by a foreign staff holding managerial position in Labuan.
5. Dividends are Not tax in Malaysia because Malaysia adopt Single Tier Dividend System.
6. Adverse new guidelines, requirement or new law in the country of origin
- With the adoption of more stringent requirements in Europe and Dubai, these factors benefited and present a good alternatively for international client to shift their operations to Labuan.
7. Adverse new requirement set by country of origin service providers
- With the tightening of new banking requirements in other parts of the world such as Hong Kong, Labuan IBFC offer a good choice for re-domicile
8. Access to modern infrastructure
- Take advantage of our business centres located in the town centres.
- Introduction of fibre optics cable in Labuan enhance the speed of telecommunication especially internet with Telekom Malaysia Unifi services.
9. Availability of talent pool and professionals in Labuan IBFC
- Businesses in Labuan can access to a large pool of highly skilled workforce. Every year a large pool of graduates are being produced by University Sains Malaysia Labuan Campus or UMSLC (http://www.ums.edu.my/v5/index.php/en/8-general/2010-umskal). There are also a growing number of fresh graduates from Curtin University Malaysia in Miri, Sarawak ( http://www.curtin.edu.my) and professionals from mainland Sabah who are willing to relocate to Labuan to seek better career opportunities in Labuan IBFC.
- Workforce Malaysia able to speak a few languages especially in English and Bahasa Malaysia. In recent times many Chinese company were able to recruit Mandarin writing and speaking employees to cater for their needs.
- Applicants may apply for Labuan Work permit and dependent visa (Including Parents, Children and Wife) to stay in Labuan and/or West Malaysia
10. Access to international banking, capital markets and financing
- In 2017, the number of banks in Labuan increased to 54, an increase of 5.9% compared to 2016
- Labuan continued to serve the rapidly expanding regional insurance needs. In 2017, there were 203 Insurance and Insurance-Related entities
11. Lower operational cost and overheads
- Labuan boast significantly lower operating and maintenance costs as compared to other jurisdictions such as Hong Kong and Singapore. For example staff costing, office rentals, professional services such as legal, accounting and audit fees are much lower.
12. Close proximate to management base. Labuan also share similar time zone with most countries in Asia, making it an ideal place to deal with Asian businesses
- It is strategically located, with connections to all key markets in Asia
- Labuan is also easily accessible by international flights via Kuala Lumpur and Singapore
- Frequent domestic flights via Kuala Lumpur, Kota Kinabalu and Miri. For example daily flights operated by Malaysia Airlines, MAS Wings, Airasia and Malindo Airlines.
REQUIRED DOCUMENTATION FOR APPLICATION TO RE-DOMICILE TO LABUAN IBFC
- Certificate of Incorporation from its country of origin (to be certified true copy by Commissioner of Oath, Notary Public or Company Secretary)
- Register of Directors Particulars (to be certified true copy by Commissioner of Oath, Notary Public or Company Secretary)
- Register of Members or Shareholders Particulars (to be certified true copy by Commissioner of Oath, Notary Public or Company Secretary)
- Register of Company Secretary (to be certified true copy by Commissioner of Oath, Notary Public or Company Secretary)
- Register of Company Auditor (to be certified true copy by Commissioner of Oath, Notary Public or Company Secretary)
- Particulars of Company Registered Address (to be certified true copy by Commissioner of Oath, Notary Public or Company Secretary)
- Audited Financial Statements (to be certified true copy by Commissioner of Oath, Notary Public or Company Secretary)
- Board Resolution to approved migration to Labuan IBFC
- Board Resolution on the appointment of Authorized Representative of existing company
- Memorandum & Articles from the country of origin (in English);
- Consent of Shareholders
- Consent from Debenture Holders (if any)
- Consent from Creditors (If any) such as Bank giving a credit facilities
- Consent of transfer by the origin jurisdiction
- Letter of Declaration by Director;
- Discontinuance of Deregistration Certificate issue by the Authority from country of origin (to be certified true copy by Commissioner of Oath, Notary Public or Company Secretary)
- Statutory Declaration of Compliance
- Declaration of Director and Shareholder on Fit and Proper person
To apply for registration for re-domicile or alternatively we can also arrange to get a pre-approved from LFSA. Once approved, a certificate confirming the approval will be issued with 12 months grace period to complete the re-domiciliation. For More Information kindly contact:
Corporate Services Trust Co Ltd
Unit B, Lot 49, 1st Floor, Block F,
P O Box 80192
87000 Federal Territory of Labuan,
Tel: 6 087 419 100
Fax: 6 087 419 200