Our website uses  cookies for statistical purposes.

  • Block A, Lot 7, 1st Floor, Pertama Industrial Estate, 87000 F.T Labuan, Malaysia
  • clients(at)labuancompanyformation.com
  • +6011 6334 3949
Our Articles

Company Liquidation in Labuan

Company Liquidation in Labuan

Company liquidation in Labuan is done following the legislation applicable in this jurisdiction. The main procedures concerning this derive from the Labuan Companies Act 1990, the same legislation that regulates the manner in which investors can open a company in Labuan.

One of the main ways to close a company in Labuan is through voluntary winding up, which must be completed following certain steps. Our specialists can present the steps that must be completed in this case and can assist investors throughout the entire procedure.

Winding up a company in Labuan – voluntary procedure

Voluntary winding up is the main procedure through which business owners opt to close a company. In order to initiate this process, it is necessary to obtain a set of documents, mainly which present the current financial state of the company and show that the debts have been paid to the creditors and, if there is any cash surplus, they were redistributed to the company’s shareholders.

Some of the main steps to complete in this case are presented in the list below. These steps are applied to all types of companies, including the Labuan offshore company:

  1. investors have to close the company’s bank account;
  2. the company must pay its creditors and pay any other debts;
  3. provided that the company has any cash surplus, it must be redistributed to the shareholders, in accordance with the stipulations of the Articles of Association;
  4. the procedure must be done by a liquidator, who must be paid for this service;
  5. winding up a company in Labuan implies the payment of certain fees, charged by the Labuan Financial Services Authority (LFSA).

Regarding this method of liquidation, it must be noted that it can be initiated only if the company is solvent, meaning that it still disposes of capital that can be repaid to the creditors. The procedure also implies the following:

  • it is done following the rules of the Section 131A of the Labuan Companies Act 1990;
  • the entire procedure for company liquidation in Labuan will take around 6 to 8 months;
  • after the documents are sent to the interested parties, if they issue a no objection document, the LFSA will approve the dissolution in 2 months;
  • companies that are liquidated are issued with a Declaration of Dissolution Notice, which is valid for a period of 6 years.

Is there another way to close a company in Labuan?

Yes, besides the above-mentioned method, companies can be closed through the strike off method. The strike off method refers to the decision to not pay the annual fee, which is mandatory for all companies after they have completed the procedure for company incorporation in Labuan.

According to the law, those who have set up a company in Labuan are required to pay the annual fee within 1 month prior to the anniversary date of the incorporation of the legal entity. Provided that a company fails to pay the annual fee after 6 months since the anniversary date, the LFSA will add a 50% penalty fee (calculated from the value of the due fee).

In the case in which the company still won’t pay the fee, the LFSA will notify the company that if the fee is not paid in 1 month since the notification, the company will enter the procedure of company liquidation in Labuan.

If the company will still not pay the fee, the institution will strike off the company’s trading name from its registers, and this will have as a direct effect the inability to carry out any further business activities from the moment when the company’s name is deleted from the registers.

Our consultants can offer information on other legal obligations will derive from this, therefore do not hesitate to address us. We also welcome you if you want to re-initiate the process of company formation in Labuan or if you want to register a Labuan offshore business. Please contact us for any other details concerning the registration of a business or its liquidation.