The Finance Act 2018 incorporating the removal of ceiling tax of MYR 20,000 has been gazetted with effective 01 January 2019.  Going forward all Labuan Trading Company will be taxed at 3% of Audited Net Profit. Malaysia’s government are commitment to International Tax Standard Practise and are Associate Members of the Organization for Economic Cooperation and Development (OECD) Inclusive Framework (IF) on Base Erosion and…More

The Impact to Labuan Leasing Company of the new Malaysia Finance Bill 2018 passed on 10 December 2018 The amended Finance Bill 2018 passed by the Dewan Rakyat on 10 December 2018 prescribe that a tax deduction will not be allowed on payments by Malaysian residents to Labuan companies, subject to any rules that may be prescribed by the Minister of Finance. It is expected…More

The new Malaysia Finance Bill 2018 passed on 10 December 2018 now removes the reference to a 97% deduction limitation of the expenditure incurred by Malaysian residents in relation to payments to Labuan company. On 10 December 2018, the lower house of the Malaysia parliament passed the below Bills which concerned Labuan International Business Financial Centre in particular: Finance Bill 2018 Labuan Business Activity Tax…More

We would like to examine the Impact of the Proposed New Labuan Tax measure that allows a Labuan Company to transact with Malaysia Resident but with limited to 3% of the allowable expenditure. To recap the new Pakatan Harapan government first Budget 2019 announced on 02 November 2018 that it will continue to enhance Labuan’s competitiveness by removing restrictions on trade in ringgit, transactions between…More

The Inland Revenue Board of Malaysia or the Lembaga Hasil Dalam Negeri has issued many tax incentives for Labuan Companies.  We explore some of these Income Tax Exemption Orders. 1. Income Tax (Exemption) (No.2) Order 1998 Rental income for the rent of any asset in Malaysia payable to none resident of Malaysia are subject to Witholding Tax in Malaysia.  Witholding Tax is a tax amount…More

On Friday, 02 November 2018 during the 2019 Budget delivered by the Minister of Finance Mr Lim Guan Eng in the Malaysia Parliament titled “A Resurgent Malaysia, A Dynamic Economy, A Prosperous Society” it was announced that: Tax ceiling of RM 20,000 under the Labuan Business Activity Tax Act 1990 will be removed and the current tax rate of 3% will be maintained. Nevertheless, the…More

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…More

One of the most questions we received on top of “how to incorporate a Labuan company“ is “how close a Labuan company“ “How to close a Labuan company” is more of a simple layman terms which should be used as “how to dissolve a Labuan company“.  There are two ways on how to dissolve a Labuan company: 1. Voluntary Winding Up Under Section 131A of…More

A Labuan company means a company incorporated under the Labuan companies Act 1990. A Labuan company may be limited by shares or by guarantee or an unlimited company. Residents and Non-Residents of Malaysia (or foreigners) are permitted to establish Labuan companies. Business transactions of Labuan companies must be made in currencies other than the Malaysian Ringgit, except for the purpose of defraying administrative and statutory…More

If you’re thinking of setting up a company and you’re looking for somewhere to incorporate your business and manage your wealth, there is a place where doing business can save you enormous amounts on company tax: Labuan. Located off the northwest coast of Borneo, Labuan is one of Malaysia’s federal territories. Strategically positioned in the heart of the Asia-Pacific region, Labuan offers a comprehensive solution,…More