To set up an LLC in Labuan one must comply with the registration procedures specified in the Labuan Companies Act 1990. Both Malaysian residents and non-residents have the authorization to open limited liability companies in Labuan. Our team of experts in company formation in Labuan can offer professional assistance to everyone interested in starting a business in this region.
Capital requirements to open an LLC in Labuan
A Labuan limited liability company has a minimum requirement of one share and no specific minimum capital for incorporation.
The minimum number of shareholders for a Labuan offshore company is one and the shareholder can be an individual, a corporation, or a trust company acting as a nominee or in a trustee capacity. Labuan companies have the flexibility to issue shares in currencies other than the Malaysian Ringgit.
For an in-depth introduction to opening an LLC in Labuan and capital requirements, please contact one of our specialists in company formation in Labuan. You can also contact us for information regarding opening a joint-stock company in the country.
Incorporating a Labuan Limited Liability Company
To open a Labuan limited liability company, you must follow these requirements:
- You must have at least one company secretary from a Labuan Trust Company;
- Have a registered address that is the principal office of a Labuan Trust Company;
- Submit audited financial statements as part of the tax filing requirements;
- Meet the prescribed minimum employee number and annual operating criteria based on the specific activity conducted by the Labuan LLC.
Additionally, when setting up a Labuan limited liability company, it is important to plan the company’s business structure in compliance with Labuan’s regulations and tax requirements.
A company formation specialist in Labuan can provide valuable guidance and ensure that all necessary steps are followed correctly.
Taxes and financial statements for a Labuan LLC
Labuan limited liability companies must conduct an annual audit of their financial statements. The accounts need to be finalized and approved by the Board of Directors no later than March each year.
The corporate tax rate for trading activities is 3% on chargeable income, while non-trading activities like holding investments are exempt from taxation. Intellectual property income is subject to tax under the Income Tax Act 1967. Companies must demonstrate their economic activity to qualify for the 3% corporate tax rate; otherwise, a 24% corporate tax rate may apply.
Labuan LLCs also enjoy tax exemptions, including no indirect taxes, stamp duty exemptions, no exchange control restrictions, and various exemptions for dividends, distributions, withholding tax, and certain payments to non-residents.
These tax advantages make Labuan an attractive option for foreign investors seeking favorable tax treatment and business opportunities. Additionally, considering the following data and information about Labuan’s financial ecosystem, it represents a promising investment destination for those looking to open a company in Labuan:
- There was a total of 5,151 active companies operating in Labuan in 2021;
- Out of the total, 2,924 companies are engaged in trading activities;
- Additionally, there are 1,869 non-trading companies established primarily for holding investments;
- The Labuan International Financial Exchange saw a total of six new listings in 2021, generating a substantial amount of 5,2 billion dollars in funds;
- During 2021, there was a notable increase of 22.9% in total assets under management.
For expert guidance and assistance in setting up a Labuan LLC, we recommend contacting our experienced team of company formation specialists in Labuan. Contact us today to explore the opportunities and benefits of starting your business in Labuan.