Labuan: P.U.(A) 325/2025 – Labuan Business Activity Tax (Requirements For Labuan Business Activity) (Amendment) Regulations 2025

Our Finance Minister II, Datuk Seri Amir Hamzah bin Azizan has on 2nd September 2025 made the gazetted public ruling titling Labuan Business Activity Tax (Requirements for Labuan Business Activity) (Amendment) Regulations 2025 (‘the gazetted Public Ruling”).

 

Highlight of the gazetted Public Ruling are as follow:

 

1) Terminology update (in P.U. (A) 423/2021 – regulation relating to economic substance requirements in Labuan):

  • The term “full time employees” has been amended to “fit and proper full time employees.”

 

2) New Regulation 2A:

  • This regulation prescribes conditions to be met by “fit and proper” full time employees, including:
    1. performance of appropriate work aligned with the Labuan entity’s business activity;
    2. having adequate and appropriate competency and ability to carry out the Labuan entity’s business activity;
    3. absence of personal interests or responsibilities interfering with duties relating to the Labuan entity’s business activity;
    4. employment on a permanent or contractual basis by the Labuan entity; and
    5. physically carrying out work in Labuan.

 

3) Schedules update (in P.U. (A) 423/2021 – regulation relating to economic substance requirements in Labuan):

  • Headings in the First and Second Schedules have been amended to reflect the minimum number of “fit and proper full time employees in Labuan”

 

Please read the public rulings – P.U.(A) 325/2025, for full text of the Regulations.

 

Disclaimer:

Kindly note that we do not provide any official legal and/or tax opinion. Should you require any such official opinion, we will be pleased to assist you in referring to an official tax and/or legal adviser.