The preferred company type is a company limited by shares, the Labuan Company. Protected Cell Companies, Limited Partnerships, Foundations and Trusts are also provided for.
What are the requirements for company formation in the jurisdiction?
A company must have at least one shareholder and at least one director. Both of these may be resident outside of Labuan and Malaysia, and both may be corporate entities. There is no minimum capital requirement and shares have no par value.
What is the general taxation rate for incorporated companies?
"Non-trading companies", those holding passive investments, receiving dividends, interest and capital gains are exempt from taxes. "Trading Companies", which covers all the other activities, are subject to either a lump-sum tax of MYR20"000 (around USD6"500) per yearor 3% on the net profit as shown in the audited financial statements.No audit is required, unless the company opts to pay the 3% tax.
Can the regulatory authorities request information about the background and identity of company officers, or company accounting details?
The authorities are aware of the registered shareholders and the directors. Nominee arrangements are possible. The Financial Statements don"t have to be filed with the authorities, unless they are audited.
What are the fees associated with company incorporation and what length of time is required to open a company?
The government fees for a basic incorporation are MYR1"150 (about USD370) if the capital is not more than the equivalent of MYR50"000 (about USD16"000). The annual fees are MYR2"600 (about USD850). Total costs for incorporation are around USD1"500, total annual costs around USD2"000.
It takes one day to check the availability of the name and once all the documents have been completed it takes about one more day to incorporate the company.
Does the jurisdiction have a DTAA with China or HK? what other major DTAs are in place? What about TIEAs?
Malaysia has signed around 70 tax treaties, including treaties with China, Taiwan and recently Hong Kong. China, Taiwan and more explicitly Hong Kong accept Labuan entities as counterparties that can fully benefit from the relevant double tax treaties these countries have signed with Malaysia. Some countries like Japan and the UK have excluded Labuan entities from the treaty benefits.
