About Labuan

It is a small island of 92 sq. km and lies around 10 km toward southwest of Sabah. By air, it is 30 minutes away from Kota Kinabalu, Sabah and slightly over two hours from Kuala Lumpur. It has a population of about 78,000 made up of Malay Brunei and Kadayan, Chinese, KadazanDusun and foreign nationals e.g. Filipinos and Indonesians and few expats.

Labuan is home to Malaysia’s only deep-water port and shares the same time zone as many major Asian cities, offering convenience for business dealings throughout the region. The oil and gas industries and construction sectors are the main drivers of the island’s economy. Petronas has a large methanol plant and is now building an even bigger one. We were told that once the second one is completed, Labuan would be the third largest producer of methanol in the world. Labuan also possess a gas terminal, a crude oil terminal, a hot briquetted iron plant, a flour and animal feed factory, a reviving shipyard, a sea product processing factory, a ceramic tile factory and a host of local and global oil and gas service support service providers, It has also been identified as a one of the new petrochemical hubs of the country.

Labuan is also home to Offshore Banks, Trust Companies, Insurance Firms and thousands of non-trading Labuan firms. Since 1990, Labuan was known as an International Offshore Financial Centre (IOFC) but recently the government had rebranded it which is known as Labuan International Business and Financial Centre (IBFC).

Business Benefit In Labuan

Labuan, has attracted numerous multi-national businesses and entrepreneurs throughout the world by using Malaysia as the hub for their international business. The obvious key benefit  is the low tax regime. The Labuan International Company is the most straightforward form in Malaysia, where foreigners can own 100% share in the company. Labuan is a mid shore jurisdiction allows trading activities for both local and international trade.

  • The main points of fascination of owning a Labuan Company:
  • Incorporation of Labuan Company can be 100% own by individual without resident partner.
  • Paid-up capital of the company minimum USD1.00
  • Require only one Director and one Shareholder. Furthermore, both position can be the same person.
  • Incorporation is fast, within 2 or 3 working days.
  • Favourable tax regime means no tax is payable on non-trading activities and Labuan trading activities taxed at 3% of net audited account.
  • Foreign directors receiving fee as income fully tax exempted.
  • Labuan Work Permit application can be done after the incorporation of Labuan company.
  • Office and residential address to be set up in Labuan once the application of work permit has been approved.
  • Robust legislation and Guidelines.Tax residency certificate available for company and individual shareholder.
  • Time zone for Asian Market.
  • Double Tax Treaties (DTA) with more than 70 countries.
  • No withholding tax.