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Company Formation Costs in Labuan

Company Formation Costs in Labuan

Investors who open a company in Labuan will often be interested in the fees for the various procedures before starting the incorporation. The Labuan incorporation cost is comprised of the fees owed to the authorities and the regulators with which certain registrations are mandatory, as well as nay additional fees and costs for services requested specifically by foreign investors from a team of incorporation experts, such as our own.

Overall, the Labuan company formation cost is not prohibitive for foreign investors and the welcoming business climate, along with the low tax regime, are string attributes for starting a business in this special financial center, compared to Mainland Malaysia, for example.

What are the main types of fees for opening a company in Labuan?

The Labuan company cost can be divided into several distinct categories:

  • – General fees: included here is the name reservation fee, 50 RM or 15 USD;
  • – Capital fees: these differ according to the company’s capital; the lowest applies when the Labuan company has the capital at or below 50,000 RM – then the fee is 1,000 RM or 300 USD;
  • – Registration fees: only applicable for the registration of a foreign company in Labuan, 6,000 RMN or 2,000 USD:
  • – Others: included here are any fees for additional documents, for specialized incorporation assistance, as well as fees for translations or notarized documents, as may be required in each particular case; teh costs for opening a bank account in Labuan are also included here; they cannot be clearly estimated as they differ from one provider to another.

The Labuan company formation cost does not include special fees for registering the Articles of Association or for submitting the statutory declaration of compliance or the consent to act as company director.

The cost associated with the company name reservation is mandatory, given the fact that the name needs to be checked and approved before the company can be registered. During this stage, we recommend that entrepreneurs prepare more than one name. Once approved, the chosen name is reserved for three months (in most cases, the Registrar issues the name approval within 24 hours).

Please keep in mind that these fees were valid at the time this article was last updated. We recommend reaching out to our Labuan company formation agents for complete information on the latest fees, any additional costs, as well as an estimate provided by our experts.

Can I pay the Labuan company formation cost through a proxy?

when foreign investors cannot be present in Labuan for the entire company formation procedure, one of our Labuan company formation specialists can act as a representative, prepare and submit the documents, along with making the relevant payments.

Our company formation packages include several services, tailored to the needs of our clients, so that the company can be duly registered, following all of the incorporation and registration procedures, including the payment of the relevant Labuan incorporation cost, expressed in the fees presented earlier.

Is there a post-incorporation Labuan company cost?

Companies in Labuan are expected to comply with the payment of the annual fees. These differ according to whether or not the company is a local or a foreign one:

  • – 2,600 RM or 800 USD for a Labuan company;
  • – 5,300 RM or 1,500 USD for a foreign Labuan company.

No form is filles in when making the annual payment. Our  team can give you more details on the time limits for paying this Labuan company cost.

The company formation process in Labuan is a straightforward one. Once all of the documents have been prepared and submitted and the fees have been received by the authorities, the Labuan Financial Services Authority commences a verification process.

Depending on the sector in which they activate, companies in Labuan are subject to additional license fees. According to 2020 data on these fees provided by the Financial Services Authority, the fee for Labuan companies in involved in insurance was 15,000 USD.

Companies in Labuan are, apart from the relevant fees, subject to a tax according to their profile, for trading or non-trading activities. Companies that are subject to taxation are charged at a rate of 3% in their net profits derived from Labuan activities. For the purpose of taxation, a legal entity is a Labuan entity if, during a given year of assessment, it has its main place of control and management based in Malaysia.

If you would like to know more about the Labuan incorporation cost, as well as the general incorporation and licensing procedure (where applicable), our team of company formation experts can help you. Contact us for more information about our services.