LABUAN COMPANIES GENERAL INFORMATION

SHORT FORMS :
LOC: Labuan Offshore Company
LOFSA: Labuan Offshore Financial Services Authority
OCA: Labuan Offshore Companies Act 1990

1. Company law:

OCA

2. Types of offshore companies:

LOC and Foreign Offshore Company (Branch)

3. Companies with no shares issued:

Not permitted

4. Are bearer shares allowed:

No

5. Capital requirements:

Minimum one unit of share paid up in full for non-licensed entities. For licensed entities, the minimum paid up share capital is on a case-by-case basis

6. Government fees: Stamp duty is not applicable while registration fee is based on authorised capital, payable to
LOFSA

7. Annual fees paid to authorities:

LOC: RM2,600 (US$730)

Branch: RM5,300 (US$1,475)
Licensed entities pay additional fees

8. Applicable taxation rates:

Offshore trading companies may opt to pay 3% on net audited profits or a fixed sum of RM20,000 (US$5,555). Offshore non-trading companies pay no tax. Companies involved in both trading and non-trading activities are deemed to be involved in trading activities and the net audited combined profits are subject to tax as described above.

9. What are the requirements for the use of local representatives/professionals?

The services of a Labuan trust company must be applied to incorporate the offshore company. A resident secretary, who is an approved officer of a trust company or a subsidiary company wholly owned by the trust company, must be appointed.

10. Are shelf companies readily available?

No, this is almost made redundant by the fact that LOCs can be incorporated within one to three working days.

11. Minimum number of members:

One

12. Registered office:

Must be the principal office of a Labuan trust company.

13. Directors and secretary:

Minimum one director, one resident secretary (see no. 9) must be appointed.

14. Are Corporate Directors and Corporate Secretaries permitted:

Yes

15. Meetings:

There is no requirement as to the location of meetings. The OCA permits members’ resolutions to be passed by circularisation or other electronic means.

16. Annual return:

Annual returns must be filed 30 days prior to the anniversary of incorporation date.

17. Must financial statements of a company be audited?

Required for licensed entities, those making public offerings and entities opting to pay 3% tax (see no. 8). Offshore non-trading companies need not be audited.

18. Is disclosure of profits required by filing balance sheets with annual returns?

Accounts do not need to be filed with annual returns. However, if the members of an offshore company adopt audited accounts then it is necessary to file the same with LOFSA (see no. 18)

19. Are there any exchange control or other financial restraints imposed upon an offshore company?

No exchange controls on foreign currency transactions. Offshore companies are not permitted to carry out transactions in Malaysian Ringgit, except for defraying administrative expenses, and making permitted investments in Malaysian securities. Certain licensed companies are permitted to deal in Ringgit subject to license conditions.

20. Offshore companies incorporated or registered in the year 2005:

532

21. Total number of offshore companies formed or registered as at 31 December 2005:

5152

22. How, if any, is migration into and out of the jurisdiction achieved?

Provided for in the OCA through registration and approved by members, creditors and debenture-holders, and the authorities of both jurisdictions.

23. Does Labuan have access to any tax treaties?

Malaysia has signed more than fifty double-tax agreements with its trading partners, most of which also apply to Labuan.