Labuan IBFC, located in Malaysia is strategically located in the heart of the Asia Pacific region, sharing a common time zone with many major Asian cities, complementing the financial centres of Hong Kong, Singapore and Shanghai.

Its regulator, Labuan Financial Services Authority (Labuan FSA) promotes a robust, modern and internationally recognised regulatory regime.

Labuan IBFC boasts Asia’s widest range of business and investment structures for cross border transactions, business dealings and wealth management needs.

It also offers straightforward and simple tax framework and with access to Malaysia’s extensive double tax treaty network with more than 70 countries.

Malaysia is a leader in Islamic finance and Labuan IBFC is the pioneer amongst international centres by having the world’s first omnibus legislation governing Islamic finance transactions in an international business and financial centre.

WHERE IS LABUAN?

LABUAN IBFC PRODUCTS AND OFFERINGS

Labuan IBFC’s comprehensive legal framework provides for a wide range of legal entities and varies choices of products & offerings.

LABUAN IBFC TAX REGULATORY FRAMEWORK

Labuan Business Activity Tax Act 1990 (“LBATA”) governs the imposition, assessment and collection of tax on a Labuan business activity carried on by a Labuan entity in, from or through Labuan. Only Labuan entities carrying on a Labuan business activity are chargeable to tax under the LBATA.

“Labuan business activity” means:

• a Labuan trading or a Labuan non-trading activity carried out by a Labuan entity;
• activities carried on in, from or through Labuan;
• business currency other than Malaysian currency;
• activities carried out with non-resident or with another Labuan entity

“Resident” means:

• in relation to a natural person, a citizen or permanent resident of Malaysia; or
• in relation to any other person, a person who has established a place of business, and is operating in Malaysia
• and includes person who is declared to be a resident pursuant to s.43 of the Malaysian Exchange Control Act 1953

LABUAN NON-TRADING ACTIVITY

• Zero tax

“Labuan non-trading activity” means an activity relating to the holding of investments in securities, stock, shares, loans, deposits or any other properties by a Labuan entity on its own behalf.

LABUAN TRADING ACTIVITY

• 3% of audited net profits OR flat rate of MYR20,000 per year of assessment, upon election annually

“Labuan trading activity” includes banking, insurance, trading, management, licensing, shipping operations or any other activity which is not a Labuan non-trading activity.

LABUAN TRADING & NON-TRADING ACTIVITIES

• 3% of audited net profits OR flat rate of MYR20,000 per year of assessment, upon election annually

NON-LABUAN BUSINESS ACTIVITIES

• Subject to provisions of the Malaysian Income Tax Act, 1967

LABUAN IBFC POPULAR USES

LABUAN INVESTMENT HOLDING

LABUAN INTERNATIONAL TRADING

LABUAN LEASING

LABUAN CAPTIVE INSURANCE

LABUAN PRIVATE FUND

• MAXIMUM 50 INVESTORS
  First time investment by each investor is NOT LESS than RM 250,000 (equivalent in Non-Ringgit);
  OR
  UNLIMITED NUMBER OF INVESTORS
  First time investment by each investor is NOT LESS RM 500,000 (equivalent in Non-Ringgit)
• Not offered to general public
• Fund Manager need not be licenced
• No approval required from Labuan FSA
• Notification to Labuan FSA prior to launching of fund by submission of fund offering documents
  

LABUAN ISLAMIC FINANCE

LABUAN FOUNDATION

LABUAN TRUST

WHY LABUAN INTERNATIONAL BUSINESS AND FINANCIAL CENTRE (IBFC)

• Strategically located in Malaysia, sharing common time zone with major Asian cities, complementing financial centres of Hong Kong, Singapore & Shanghai
• A leading business and financial centre in Asia Pacific with growing reputation and track record
• Striking an ideal balance between client confidentiality and compliance with international best standards
• Robust and well-balanced legal and regulatory framework
• A tax-efficient jurisdiction to facilitate businesses
• Access to Malaysia’s double taxation treaty network with more than 70 countries
• A complete range of solutions for business and investment structures for cross border transactions, business dealings and wealth management needs

TAX EXEMPTION

• Stamp duty on all instruments executed by Labuan entity in connection with Labuan business activity, including M&A and transfer of shares instruments in Labuan entity
• Dividends received from Labuan entities
• Distributions received from Labuan trusts and foundations by the beneficiaries
• Distributions of profits by Labuan partnerships
• Royalties received from a Labuan entity by a non-resident person or another Labuan entity
• Interest received from a Labuan entity by another Labuan entity, resident or non-resident person (other than interest accruing to a business carried on by a non-resident person in Malaysia where that non-resident person is licensed to carry on business under the Malaysian Banking and Financial Institutions Act 1989, Islamic Banking Act 1983, Insurance Act 1996 or Takaful Act 1984)
  
  

TAX INCENTIVES

Applicable up to year of assessment 2020:

• Tax exemption on directors’ fees received by a non-Malaysian citizen as director of a Labuan entity
• Tax exemption on 50% of gross income received by an individual non-Malaysian citizen from exercising an employment in a managerial capacity with a Labuan entity in Labuan, co-located office or marketing office
• Tax exemption on 50% of gross housing and Labuan Territory allowances received by Malaysian citizen from exercising an employment in Labuan with a Labuan entity
• Tax exemption on 65% of the statutory income of any person providing qualifying professional services eg. legal, accounting, financial and secretarial services, rendered in Labuan to a Labuan entity
  
  

OTHER ATTRACTIONS OF LABUAN IBFC

• NO Withholding Tax
• NO Capital Gains Tax
• NO Inheritance Tax
• NO Indirect Tax
• NO VAT / goods and services tax (GST)
• NO import duty / sales tax
• NO exchange control