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Open a Construction Company in Labuan

Open a Construction Company in Labuan

Labuan is an international business and financial center, with many companies providing services in areas like banking, insurance, wealth management, and other financial services. However, establishing a business is not restricted to the financial sector, and companies in Labuan are generally included in two distinct categories, trading, and non-trading.

In order to open a construction company in Labuan, investors will need to follow the procedure for the Labuan International Company because of the advantages it offers to foreign investors and the general taxation advantages.

Our team of Labuan company formation experts can provide complete assistance to investors interested in opening a company in Labuan in different business sectors, trading or non-trading activities alike.

Construction companies in Labuan and Malaysia

The construction industry in Malaysia is developed into four different subsectors and it has a number of other industries linked to it.

The four main types of services that can be provided by a construction company in Labuan include the following:

  1. Professional services: construction services offered by professionals such as engineers, building control, architects, etc.
  2. Onsite construction: the common type of service, includes actual construction, site preparation, building installation, etc.
  3. Manufacturing: of construction materials, includes suppliers of building products or components, most often wholesalers. 
  4. Real estate: includes the different sub-sector of real estate services, closely linked to the construction development projects.

Companies in this field that are engaged in onsite construction will typically provide services for one or all three of the main stages, the pre-construction phase, the construction or on-site phase, and the post-construction phase. 

Investors who are interested in commencing construction projects in Malaysia and its federal territory should know that the Construction Industry Development Board is the agency that regulates this field.

Foreign companies that provide these services are required to register for every project. It is advisable to seek proper assistance for the purpose of understanding the regulatory regime in this business field. 

Obtaining relevant permits and licenses is mandatory in the construction sector. Our Labuan company formation agents can provide complete details on the license application according to the region and the governing authority. For example, in the case of Kuala Lumpur, Labuan, and Putrajaya, the statue authority for compliance procedures is the Ministry of Federal Territory. 

You must also know that foreign companies can benefit from the provisions of the double tax treaties signed here. This will also apply for Labuan offshore businesses, which can benefit from many tax deductions.

It is also important to know that offshore business can benefit from simpler reporting obligations. Additional tax exemptions can apply based on the field of activity (offshore banking, insurance, etc.).

Advantages for construction companies in Labuan

Investors who open a company in Labuan have a set of benefits, as per the applicable regime in the Federal Territory of Malaysia. Investors have the following advantages when they incorporate here:

  • – Simple incorporation: a Labuan company can be easily incorporated by drafting the required documents; the founders do not need to be present during the entire incorporation procedure.
  • – Fast incorporation: companies can be incorporated in Labuan in approximately three days when all of the documents are in order.
  • – Low tax: companies in Labuan that deal with Malaysian companies are subject to a 3% tax.
  • – Simple requirements: the company can be formed by only one shareholder who can also act as the company director.
  • – Low costs: the overall costs for the incorporation of the business are low, with the minimum capital being at least 1 USD; other fees apply for licenses.

As they are able to trade with Malaysian clients, investors can choose to open a Labuan construction company and enter into projects developed in several regions throughout Malaysia. The taxation advantages are among the most important ones, however, investors are also interested in the fast-track incorporation process. 

Because Labuan is a jurisdiction preferred mainly by investors in the financial sector, we do advise entrepreneurs who wish to explore different business options to reach out to one of our Labuan company formation agents for complete information on the licensing requirements. 

Malaysia construction sector is a dynamic one, as shown by the following statistics:

  • – the sector recorded an approximate growth value of 37.4 billion RM in the first quarter of 2019;
  • – the private sector dominates the statistics, with a share of 56% and approximately 20.9 billion RM.
  • – the gross output value in the sector for 2017 had a growth of 7.2 percent, to approximately 204.4 billion RM, compared to 2015.

Investors who are interested in the formation of Labuan offshore companies can contact us for complete details and assistance for incorporation.