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Labuan Company Formation Frequently asked questions (FAQs)

1. What is Labuan company tax rate?

3% of Audited Net Profit for trading activities.

No tax for Non-Trading activities.

2. Does Malaysia have any double tax agreements in place
Yes, the country has signed double tax agreements with 65 countries.
3. What is the minimum capital requirement of Labuan entity?
From US$ 1 onward
4. Can a Malaysian incorporate a Labuan company?
Both Malaysian or Non Malaysian can be the director & beneficiary of a labuan company.
5. Is there any requirement to file account for Labuan company?

Only for licensed companies and companies electing to pay 3% tax.

Nevertheless, there is still a requirement to keep accounts that will sufficiently show the financial position of the company. With increased compliance, it is common that most companies will be required to prepare at least management accounts

Read more:

6. Is there any requirement to file an annual return?
Yes but it is simple.
7. Does Labuan Company require Company secretary?

Yes and if more than one is appointed at least one must be a resident secretary.

Only an approved officer of a Labuan trust co or its wholly owned subsidiary may be appointed as a resident secretary.

Read more:

8. Do I need to be physically present in Labuan to incorporate the Labuan Company?
Not necessary.
9. How long will it take to register a Labuan company?
2 - 3 working days upon receiving your full documentation.
10. Do I need to inform Labuan Financial Services Authority when I register a Labuan company?
No. One IBC will assist you in incorporating the Labuan Company from start to end.
11. What are the minimum director and shareholder requirements for a Labuan company?
One director who can either be an individual or a corporate entity and one shareholder who can either be an individual or a corporate entity.
12. Is it possible to open a bank account for Labuan Company in Labuan
Yes, One IBC can assist you.
13. Do Labuan Company need to file annual return?
Yes. Annual returns must be filed not later than 30 days prior to the anniversary of the date of incorporation.
14. Must financial statements of Labuan Company be audited?
Yes for Trading Company. Not required for Holding Company.
15. What are the benefits to do business in Labuan, Malaysia? How to open an offshore company in Labuan, Malaysia?

Malaysia is the third-largest country in Southeast Asia and the 35th in the world. The government of Malaysia has built a friendly business environment and provided a variety of incentive policies for foreign investors and businesses to open an offshore company in Labuan.

Labuan is a Federal Territory of Malaysia and a strategic place to invest in Asia. In recent years, Labuan has become a popular jurisdiction to attract many investors and businesses around the world. Investors and businesses will enjoy a lot of benefits such as low taxes, 100% foreign-owned, cost-effective, and confidentiality secured, etc. to do business in Labuan, Malaysia.

Labuan is not only a famous place to travel but also an ideal place to open an offshore company. In order to do business in Labuan, you need to follow these steps:

Step 1: Choose your business nature and structure that fits your business plan;

Step 2: Decide and propose 3 valid names for your company; 

Step 3: Decide on Paid-Up Capital;

Step 4: Open a corporate bank account for your offshore company;

Step 5: Consider if you need two years’ multiple entry work visas for yourself, partners, and family members.

Together with Singapore, Hong Kong, Vietnam, etc. Labuan has become the new destination in Asia, where global investors and businessmen come to expand their business. 

16. What is the Labuan International Business and Financial Centre?

Labuan is a Federal Territory of Malaysia which was originally established on 1 October 1990 as Labuan Offshore Financial Centre. Later on, it was renamed to Labuan International Business and Financial Centre (Labuan IBFC) in January 2008.

Like some other offshore financial centers, Labuan IBFC offers a wide range of financial services and products to customers including banking, insurance, trust business, fund management, investment holding and other offshore activities.

Incorporation of a Labuan company in Labuan International Business and Financial Centre (Labuan IBFC) must be done through a registered agent. The application should be submitted together with the Memorandum and Articles of Association, consent letter to act as director, statutory declaration of compliance as well as payment of registration fees based on paid-up capital.

17. What is Labuan Financial Services Authority?

The Labuan Financial Services Authority (Labuan FSA), formerly known as Labuan Offshore Financial Services Authority (LOFSA), is a one-stop agency which was established on 15 February 1996 as a single regulatory body to promote and develop Labuan as an International Business & Financial Centre (IBFC). Its establishment further draws the attention of the government’s commitment to make Labuan a premier IBFC of high repute.

Labuan FSA is formed to focus on business development and promotion, process application and supervise business and financial activities, develop national objectives, policies and set priorities, administer and enforce legislation, and incorporate/register Labuan offshore companies.

18. What are the main functions of Labuan Financial Services Authority?

Labuan Financial Services Authority (Labuan FSA) helps in managing and regulating the international business and financial centre and undertakes economy research and development. Labuan FSA also comes out with plans for further growth and greater efficiency of the Labuan IBFC.

Furthermore, since Labuan’s establishment in 1996, it has reviewed the current legislations for the purpose of making the required and proper changes as well as to plan new activities to enlarge and deepen the financial services industry.

Labuan FSA is also taking measures to draw more interest to a bigger number of professionals and skilled workers to live and work in Labuan IBFC to support the industry.

Besides that, Labuan FSA has come out with policies that help to facilitate and assist the creation of a competitive and attractive business environment in Labuan. Furthermore, Labuan’s legislative framework is not only business-friendly but at the same time it helps to protect Labuan’s international image as a clean and reputable international business and financial centre.

19. How much capital to start a business in Malaysia?

The amount of capital required to start a business in Malaysia can vary widely depending on the type of business, its size, location, and industry. Malaysia offers a range of business opportunities, from small startups to larger enterprises, so the capital required can be flexible.

Here are some key factors that can influence the capital needed to start a business in Malaysia:

  1. Business Type: The capital required will vary significantly depending on whether you're starting a small retail shop, a tech startup, a manufacturing company, or a service-based business.
  2. Location: The cost of doing business in Malaysia can vary by location. Setting up a business in a major city like Kuala Lumpur may require more capital than in a smaller town or rural area.
  3. Legal Structure: The type of business structure you choose (e.g., sole proprietorship, partnership, limited liability company) will impact the initial capital requirements.
  4. Industry and Regulations: Different industries may have specific licensing or regulatory requirements that can affect your startup costs.
  5. Scale and Scope: The scale of your business, the number of employees you plan to hire, and the scope of your operations will also influence your capital needs.
  6. Business Plan: A well-thought-out business plan can help you determine the specific capital requirements for your venture.

To get a more accurate estimate of the capital needed for your specific business idea, it's advisable to consult with a financial advisor or a business consultant who can help you assess your unique circumstances and develop a detailed financial plan. Additionally, you may want to reach out to government agencies or business support organizations in Malaysia, such as the Malaysia Digital Economy Corporation (MDEC) or the Companies Commission of Malaysia (SSM), for guidance and information on starting a business in the country.

20. Can I renew my business license online in Malaysia?

You can renew your business license in Malaysia online in some cases, depending on the type of business and the local regulations. However, the specific process and requirements may vary depending on the location and nature of your business. To renew your business license online, you typically need to follow these general steps:

  1. Check Eligibility: Determine if your business qualifies for online license renewal. Some businesses may still require in-person renewals, while others may have an online option.
  2. Visit the Appropriate Website: Visit the website of the relevant government authority or agency that handles business licenses. This is typically the Companies Commission of Malaysia (SSM) or the local city or municipal council.
  3. Create an Account: If you haven't already, you may need to create an online account on the relevant government website.
  4. Log In: Log in to your account using your username and password.
  5. Locate the License Renewal Section: Look for the section related to business license renewal. This might be under "e-Services" or a similar category.
  6. Provide Required Information: Follow the instructions on the website to provide the necessary information, which may include your business registration number, personal details, and payment details.
  7. Pay the Renewal Fee: Pay the renewal fee online using the provided payment options, which typically include credit/debit cards or online banking.
  8. Review and Submit: Double-check the information you've provided and submit your renewal application.
  9. Receive Confirmation: Once your renewal is processed, you should receive a confirmation or a renewed license via email or by post.

Please note that the process might have changed or evolved, so it's essential to visit the official government website or contact the relevant authority to get the most up-to-date and accurate information on how to renew your business license online in Malaysia. Regulations and processes can change over time, and it's crucial to follow the latest guidelines provided by the authorities.

21. How much is the fee for business license renewal in Malaysia?

The fees for business license renewal in Malaysia can vary depending on the type of business, location, and other factors. The specific fees may change over time due to updates in government regulations. To find out the exact fee for renewing a business license in Malaysia, you should contact the local government authority or the relevant agency in your area.

Typically, you can inquire about business license renewal fees from the following sources:

  1. Local Municipal or City Council: In Malaysia, local government authorities such as municipal or city councils often handle business licenses. You can visit their official websites or contact their offices to get information on the renewal fees.
  2. Companies Commission of Malaysia (SSM): The SSM may be involved in the licensing and registration of certain businesses. You can visit their website or contact their offices for information on fees related to your specific business type.
  3. Local Business Associations: Local business associations or chambers of commerce may also provide information on business license renewal fees and procedures.

It's essential to ensure that you have the most up-to-date and accurate information regarding fees, as they can change over time, and the fees may vary based on your business type and location.

22. How long does the company incorporation process take in Malaysia?

The process for incorporating a company in Malaysia can vary in duration depending on several factors, including the type of company, the completeness of your documentation, and the efficiency of the government agencies involved. On average, it can take anywhere from 1 to 2 months to complete the incorporation process. Here is a general timeline and overview of the steps involved:

  1. Name Search and Reservation: This is the first step and typically takes 1-2 business days. You need to choose a unique name for your company and submit it for approval.
  2. Preparation of Documents: Once your company name is approved, you'll need to prepare the necessary incorporation documents, including the Memorandum and Articles of Association (M&A), statutory declarations, and other required forms. The time required for this step depends on how quickly you can gather and prepare the documents.
  3. Submission of Documents: After your documents are ready, you can submit them to the Companies Commission of Malaysia (SSM) or via the MyCoID online system. The processing time for document submission can vary, but it usually takes a few weeks.
  4. Approval and Registration: Once the documents are submitted and reviewed, you will receive the certificate of incorporation if everything is in order. This step can take several weeks, depending on the workload at the SSM.
  5. Post-Incorporation Procedures: After receiving your certificate of incorporation, you'll need to complete additional post-incorporation procedures, such as applying for business licenses, registering for taxes, and opening a company bank account. The time required for these procedures can vary based on the specific requirements.

It's important to note that there are various business structures in Malaysia, such as sole proprietorships, partnerships, and different types of companies (e.g., private limited, public limited, etc.), and the incorporation process may vary slightly for each. Additionally, any changes in government regulations or backlogs at government agencies can impact the timeline.

To ensure a smooth and efficient incorporation process, it's recommended to work with a professional service provider or consultant who is knowledgeable about the process and can assist with the necessary paperwork and compliance requirements. They can help expedite the process and ensure that you meet all legal requirements.

23. How do I check my company registration number in Malaysia?

To check your company registration number in Malaysia, you can follow these steps:

  1. Visit the SSM (Companies Commission of Malaysia) Website: Go to the official website of the SSM, which is the regulatory body responsible for company registrations in Malaysia. The website is
  2. Access e-Services: Look for the "e-Services" or "Online Services" section on the website. This is where you can access various online services, including checking your company registration number.
  3. Register for an Account (If Needed): If you don't have an account on the SSM e-Services portal, you may need to register for one. Follow the registration process, which typically involves providing your personal and business information.
  4. Log In to Your Account: Log in to your account using the credentials you've just created.
  5. Access Company Information: After logging in, look for the option to access company information or perform a company search. This can usually be found in the e-Services menu.
  6. Search for Your Company: Enter the relevant details about your company, such as the company name, registration number, or other identifying information. You should be able to find your company's registration details.
  7. View Registration Information: Once you locate your company, you can view and verify the registration information, including your company registration number (also known as the company registration or business registration number).

Please note that the exact steps and details may change, so it's a good idea to refer to the SSM website for the most current and accurate information on checking your company registration number in Malaysia. Additionally, you may need to pay a small fee for accessing this information through the online service. If you encounter any difficulties, you can also consider contacting the SSM directly for assistance.

24. Do I need to be in Malaysia to set up a Malaysian company?

No, you do not need to be physically present in Malaysia to set up a Malaysian company. Malaysia allows foreign individuals and entities to establish businesses in the country, and the process can be initiated from abroad. Here are the general steps to set up a Malaysian company as a foreigner:

  1. Choose the Business Structure: Decide on the type of company structure you want to establish, such as a private limited company (Sendirian Berhad or Sdn Bhd).
  2. Reserve a Company Name: Check and reserve a unique company name through the Companies Commission of Malaysia (SSM) online portal.
  3. Appoint Directors and Shareholders: Identify the directors and shareholders for your company. At least one director must be a resident of Malaysia.
  4. Register the Company: You can engage a company secretary in Malaysia to help you with the registration process. They will assist in preparing the necessary documents and filing them with SSM.
  5. Minimum Paid-Up Capital: Ensure that the company meets the minimum paid-up capital requirements, which can vary depending on the business activities.
  6. Registered Office: You will need to provide a registered office address in Malaysia.
  7. Apply for Necessary Licenses: Depending on your business type, you may need specific licenses or permits. Check with relevant authorities to ensure compliance.
  8. Bank Account: Open a company bank account in Malaysia to handle financial transactions.
  9. Taxation: Register your company for taxation with the Inland Revenue Board of Malaysia (LHDN).
  10. Compliance: Comply with annual filing and reporting requirements, such as the submission of annual returns and financial statements.

While you can start the process from abroad, you may need to visit Malaysia for certain steps, like opening a bank account, meeting with local authorities, or signing certain legal documents. Additionally, having a resident director is a requirement for most company structures, but there are services available that can provide a nominee director if needed.

It's highly advisable to seek legal and professional assistance, such as engaging a company secretary or a business consultant in Malaysia, to ensure that you follow all the necessary procedures and meet the legal requirements. Laws and regulations may change, so it's essential to stay up to date with the latest information when starting a business in Malaysia.

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