Co-Location of Labuan Holding Company

In line with the Malaysian government’s move to liberalise the financial sector, Labuan Holding companies were permitted to set up an operational and management office in the capital city of Kuala Lumpur. This is to facilitate the business of the Labuan Holding Company (“LHC”) by leveraging, amongst others, on the infrastructure, human capital, professional services and service providers, as well as recreational and residential facilities that are available in Kuala Lumpur.

“LHC” here refers to a Labuan company incorporated under the Labuan Companies Act 1990 (“LCA”) that carries on permitted activities mentioned in this document.

APPLICATION FOR CO-LOCATION OF LABUAN HOLDING COMPANY

Application for approval to set up an operational and management office should be submitted to the Labuan FSA prior to establishment of the office.

Kensington Trust Labuan Limited is a licensed trust company in Labuan and is able to assist you with the application, establishment and administration of your Labuan company.

WHO QUALIFIES

Applicant must have international and/or regional operations/businesses

PERMITTED BUSINESS ACTIVITIES

  1. The LHC must carry on business with non-resident of Malaysia and in foreign currency, except as permitted under the LCA and the Exchange Control Act 1953.
  2. Subject to Labuan FSA’s approval, the LHC is allowed to carry on any one or a combination of the following business activities from its office in Kuala Lumpur -
  • Holding of investment in securities, stocks, shares, loans, deposits or immovable properties.
  • Providing management services including administrative, human resource, accounting and backroom support services to:-
    -  related companies within Malaysia; or
    -  related or non-related companies outside Malaysia
  • Managing surplus funds and providing credit facilities to related companies within the group in and outside Malaysia.
  • Trading or invoicing activities outside Malaysia.

TAXATION

The LHC must make an irrevocable election to be taxed under the Malaysian Income Tax Act 1967 pursuant to Section 3A of Labuan Business Activity Tax Act 1990. Hence, the LHC is required to -

  • comply with the provisions of the Malaysian Income Tax Act 1967
  • submit an annual audited accounts to Labuan FSA; and
  • conduct an Annual General Meeting in Malaysia

LABUAN FSA’S FEES

  • Processing fee (once-off): RM1,000
  • Annual fee: RM10,000. The annual license fee is payable once approval to co-locate is given by Labuan FSA and remains valid until 31 December of the year of approval. Subsequent annual fee is payable on or before 15 January of each calendar year.