Redomiciliation: Moving Foreign Entities To Labuan, Malaysia

Labuan Port
Labuan is a mid-shore jurisdiction, as part of Malaysia. It is well- supported by a robust, modern and internationally-recognised legal framework enforced by its regulator, Labuan Financial Services Authority (Labuan FSA). This jurisdiction provides a wide range of business and investment structures for cross-border transactions, international business dealings and wealth management demands.
TAX HEAVEN
Previously, reason of people setting up an offshore company is to take advantage of favorable tax law or its less stringent regulatory provisions. However, the growing international push for transparency and exchange of information amongst jurisdictions for tax purpose, with the implementation of common reporting system by most of the country now has push the paper company about to end. Business founder need to prove their operation is truly located in that jurisdiction to enjoy the tax. If you have a business in offshore jurisdiction that with high operation cost, far from your mother, you should consider Labuan, Malaysia. If you have a business in offshore jurisdiction that with high operation cost, you should consider Labuan, Malaysia.
If you have a business in offshore jurisdiction that with high operation cost, you should consider Labuan, Malaysia.

WHY SHIFT TO LABUAN

Tax frаmеwоrk
  • 3% tаx is charged fоr a уеаr оf assessment оn thе net audited profits
  • Withhоlding taxes on рауmеntѕ tо non-resident реrѕоnѕ
  • Mоrе thаn 70 tаx trеаtiеѕ раrtnеrѕ (Dоublе Tax Agreement)
  • 100% fоrеign ownership without extra tax

Low Operation Cost

Monthly Expenses Items Average Price
Fully furnished office includes utilities RM1300/month USD325/month
Salary for fresh graduate RM1500/month USD375/month
Salary for skilled worker RM2800/month USD700/month
Company backed support (account, HR, admin) RM1500/month USD375/month
Total RM7100 USD1775
Additional Cost Average Price
Air ticket from Kuala Lumpur - Labuan (both way) RM350 USD88
Accommodation /night RM160 USD40
Company backed support (account, HR, admin) RM8000 USD2000

Conclusion

Labuan is considerably more affordable than other off/mid-shore destinations. The island is well situated between China and India as well as many of ASEAN’s financial hubs to take advantage of trade by sea as well as offshore services. If you are the owner of a foreign company looking for a jurisdiction that is low tax regime, low operation cost with access to skilled workers, reasonable price for substance creation, stable political environment and looking to establish in ASEAN, you may look to Labuan as an establishing platform. You can redomiciling your company, set up a brunch or subsidiary in Labuan.
Disclaimer: The information provided does not constitute legal advice. You should obtain specific legal advice from a lawyer before taking any legal action. Although we try our best to ensure the accuracy of the information on this website, you rely on it at your own risk.
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