The tax advantages of Labuan companies at a glance:

  • Zero Sales Tax and No Government Service Tax for Labuan Company.
  • Zero Goods & Service Tax (GST) or Value Added Tax (VAT) for Labuan Company.
  • Zero Capital Gain Tax.
  • No Withholding Tax for payment out of Labuan
  • Zero tax on dividend in Malaysia.
  • Zero Stamp Duty for the execution of certain instruments related to the operations of Labuan Company such as M&A and Share Transfer Form.
  • 50% Exemption on Gross Employment Income received from Labuan Company by Non-Malaysian Citizen in Managerial capacity in Labuan.
  • 50% Exemption on Gross Housing Allowance and Labuan Territory Allowance received by Malaysia Resident exercising employment in Labuan for a Labuan Company.

Income Tax Exemption Order for Labuan Company

Income Tax (Exemption) (No.6) Order 2011 [P.U. (A) 418/2011]
65% of the statutory income derived by any person form the provision of qualifying professional services (i.e. legal, accounting, financial or secretarial services) rendered in Labuan to a Labuan entity (as specified in the Schedule to Labuan Business Activity Tax Act 1990 [Act 445]), is exempted from income tax from year of assessment (YA) 2011 to YA 2020.

Income Tax (Exemption) (No.7) Order 2011 [P.U.(A) 491/2011]
Fees received by an individual non-Malaysian citizen as a director of a Labuan entity are exempted from income tax from YA 2011 to YA 2020.

Income Tax (Exemption) (No.8) Order 2011 [P.U (A) 420/2011]
50% of the gross employment income received by an individual non-Malaysian citizen in a managerial capacity with a Labuan entity in Labuan.

Income Tax (Exemption) (No.9) Order 2011 [P.U. (A) 421/2011]
50% of the gross housing allowance and gross Labuan Territory allowance received by an individual Malaysian citizen from exercising an employment in Labuan with a Labuan entity is exempted from income tax from YA 2011 to YA 2020.

Labuan Tax Information & Labuan Corporate Tax Structure

  • The financial year end for Labuan companies is 31st December every year.
  • We will assist the Labuan Company to open corporate tax file (Form C)
  • The Labuan Company may appoint the Labuan¬† Trust Company as the Tax Agent
  • We will assist the Labuan Company to file their yearly tax filing with Inland Revenue Board (IRB) or Lembaga Hasil Dalam Negeri (LHDN)
  • The dateline for Labuan Tax submission is 31st March annually after the year end of previous year ended 31 December and may be extended subject to IRB approval