Best vehicle for cross border investments from Europe into Asia
Labuan is economically strong. Being centrally located on the major shipping and air routes of the Asian region, Labuan is roughly equidistant from the major cities of South East Asia: Bangkok, Hong Kong, Jakarta, Kuala Lumpur, Manila and Singapore. Labuan is linked to Kuala Lumpur, the Malaysian capital, by daily return flights, flying time is two-and-a-half hours.
More than 50 of the world's top banks have branches in Labuan. Offshore companies in Labuan are required to conduct business mainly in foreign currency. Labuan has a very liberal policy in relation to exchange control for offshore business activities.
The Federal Territory of Labuan is part of Malaysia and consists of seven small islands, of which Pulau Labuan is the largest. Labuan is situated near the northwest coast of Borneo, not far from Brunei. At its nearest point, Labuan is only about 10 km off the coast of the Eastern Malaysian state of Sabah.
The Offshore Companies Act 1990 amended in 2010 as the Labuan Companies Act regulates the Offshore Company formation and registration. It is designed such that both a resident and a non-resident are allowed to start an offshore company in Labuan. A company may or may not be limited. The beneficial ownership details are not disclosed. Bearer shares are not permitted. A registered office and an agent must be in Labuan. The minimum issued capital is one share, which may be fully or partly paid. Registered shares of par value, preference shares, redeemable shares and shares with no voting rights are all permitted. Annual returns need to be filed. Accounting records must be kept in the registered office in Labuan.
The Labuan Offshore Act 2010 has introduced – Protected Cell Company and Companies Limited by Guarantee.
The Labuan Offshore Limited Partnership Regulations 1999 regulates the Limited Partnership. A limited partnership must contain a minimum of one and can go up to 20 partners. One general partner is required.
Registration fees are to be paid according to the fixed amount of capital. Fees for Stamp and file are to be paid during document submission. A company should have 2 directors and a secretary with Malaysia being the principal residence. Register of directors need to be placed in the registered office and will be available to the public.
One director required who may be represented as a corporate or an individual, he may or may not be a resident director. But has to hold an annual meeting, which is mandatory.
The details of shareholders can be held in privacy under a legislation provided by the Labuan government. Bearer shares are not allowed and a minimum of one shareholder is required, who may be an individual or a corporate entity. Companies need to hold frequent meetings.
The time period to incorporate a Labuan company is usually between 24hours to 48hours.
An offshore company name can be in a foreign language provided that they are written in Latin. Names that resemble an existing companies name or that has been registered under the Company Act 1965, are not accepted. The registrar may consider a few names to be undesirable and thereby can reject it.
The company should end with the following suffixes to determine that they are a limited liability company – Corporation, Society Anonyme, Sociedad, Incorporated, limited, or their abbreviations. A company that is named in Malaysian, as Berhad can either be a limited or an unlimited company and needs to be denoted with an L (for written in Labuan)
Names including the words “Bank, Building Society, Insurance, Assurance, Reinsurance, Fund management, Investment Fund, Trust, Trustees, Chamber of Commerce, University, Municipal or their foreign language equivalents” will require a consent or a licence. Names that are approved and registered will be maintained up to a period of three months.
Labuan offers 2 options to the trading businesses:
The advantage being that every year the company may choose from either of the options that suits best for them.
Investment holding companies are not subject to tax.
Labuan follows the money laundering legislation, and as such by law, all licensed service providers must have a KYC before a transaction is accepted.
Labuan government offers a liberal immigration policy that issues multiple entry visas to expatriates who are given employment permits to work with offshore companies.Compare Jurisdictions Talk to a consultant