DOING BUSINESS IN LABUAN

Transcription

1 DOING BUSINESS IN LABUAN 07/2017 shinewingtyteoh.com

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3 About Labuan Summary of Quick Facts Location Land Area Time Zone 8km off the coast from the state of Sabah, East Malaysia, on the island of Borneo. 92 sq. km. GMT + 8 Hours. Climate Tropical weather with an average 30. Population Language Currency Legal System Constitution Economic Sector Accessibility 95,500 comprising of a mix of Malays (50%),Chinese (40%), Indians and the indigenous people of Sabah & Sarawak, East Malaysia. Malay is the national language but English is commonly spoken. Malaysian Ringgit (MYR). English Common law, British Legal System. Parliamentary democracy. Oil and Gas, Business and Financial Services. Several daily flights to Kuala Lumpur and Kota Kinabalu with connection to USA, Europe, Asia and Australia. Labuan Companies Businesses in Labuan are regulated by modern Acts. These Acts enhance its competitiveness in the offering of financial product and services. Labuan IBFC also adheres to international standards and best practices including anti money laundering and exchange information set by the Organisation of Economic Cooperation and Development. Acts which govern the businesses in Labuan as follows:- a. Labuan Business Activity Tax Act 1990 b. (Amendment to the Labuan Business Activity Tax Act (Finance (No.2.) Bill 2011) c. Labuan Companies Act 1990 d. Labuan Trusts Act 1996 e. Labuan Financial Services Authority Act 1996 f. Labuan Financial Services and Securities Act 2010 g. Labuan Islamic Financial Services and Securities Act 2010 h. Labuan Foundation Act 2010 i. Labuan Limited Partnerships and Limited Liability partnerships Act 2010 Labuan company can engage in multi type of business activities and serve as many different purposes as below:- a. Investment holding b. International trading c. Banking and finance institution d. Leasing e. Insurance f. Fund management g. Trust and Foundation h. Shipping and Oil & Gas Page 3 of 8

4 Labuan Companies Characteristics Company Name I. Under the Labuan Companies Act, 1990, the name of the Company may have the word (L) as part of its name and shall also have the word: a) Bhd or Berhad, where the company name shall in addition have the word (L) or (Labuan) ; b) Corporation or Corp ; c) Incorporated or Inc ; d) Limited or Ltd ; e) Public Limited Company or PLC ; f) Societe Anonyme or Sociedad Anonima or S.A ; g) Aktiengesellschaft or the abbreviation A.G ; h) Naamloze Vennootscap or the abbreviation N.V ; i) Perseroan Terbatas or the abbreviation P.T. II. The words Royal, Bank, Finance, Fund or Trust shall be avoided, except for specific business activities which required the corresponding licence(s). Share Capital a. Share capital can be held in any foreign currencies except Malaysian Ringgit. b. No par value and treasury shares are allowed. Shareholder At least one (1) shareholder who can be either individual or corporate. Director(s) a. At least one (1) Director who can be either individual or corporate. b. The Director(s) can be either a non-resident or resident of Malaysia. Company Secretary The company must have a resident secretary which can be either individual or corporate. Registered Office The company must have a registered office in Labuan. Annual Return An annual must be filed not later than 30 days from the anniversary of the date of its incorporation. Page 4 of 8

5 Maintain Proper Accounting Records Yes. Audit The company do not elect to pay the flat tax of RM20,000 is subject to audit. Tax Return Tax return must be filed within a periods of three (3) months. Business Registration An annual government fee is payable within 30 days immediate after the anniversary date of its incorporation. Labuan Taxable Activities Taxation I. Non Labuan Trading Activities refer to an activities relating to the holding of investment in securities, stock, shares, loans, deposits and immovable properties by a Labuan company on its own behalf. II. III. Labuan Trading Activities refer to any other activities which are not non-trading activities, which include banking, insurance, trading, etc. Taxation a. A Labuan company carrying on Labuan Non Trading Activities is not subject to tax. b. A Labuan company carrying on Labuan Trading Activities is taxed at a rate of 3% on net profit or a flat tax of RM20,000. c. A Labuan company carrying both Labuan Trading Activities and Non Trading Activities shall be deemed to be carrying on Labuan Trading Activities. Tax Exemption The source of income is exempted from income tax as follows:- a. Dividend paid out of the income derived from the Labuan Business Activities is not subject to tax. b. Interest or technical and management fee paid by a Labuan company to a non-resident person or a resident person or another Labuan company is not subject to withholding tax. Page 5 of 8

6 Tax Incentives (until to Year of Assessment 2020) a. Tax exemption on Director fees received by a non-citizen individual in his capacity as a Director of a Labuan entity. b. Tax exemption on 50% of gross income received by a non-citizen individual from exercising employment in Labuan with Labuan company in managerial function in Labuan or at its marketing or co-located offices approved by Labuan Financial Services Authority. c. Tax exemption on 50% of gross housing and Labuan territory allowances received by Malaysian citizen from exercising employment in Labuan with a Labuan entity. Stamp Duty Exemption The following activities are exempted from stamp duty:- a. All Memorandum and Articles of Association of a Labuan company. b. All instrument executed by a Labuan company in connection with a Labuan business activities, including transfer of shares in a Labuan company. Double Taxation Agreements Malaysia has entered into Double Taxation Agreements with various countries as follows:- Albania, Republic Germany Mongolia Singapore Argentina ^ Hungary Morocco South Africa Australia India Myanmar Spain Austria Indonesia Namibia Sri Lanka Bahrain Ireland Netherlands Sudan Bangladesh Islamic Republic of Iran New Zealand Sweden Belgium Italy Norway Switzerland Bosnia & Herzegovina * Japan Pakistan Syria Brunei Jordan Papua New Guinea Taiwan # Canada Kazakhstan Philippines Thailand Chile Korea, Republic Poland Turkey China, People s Republic Kuwait Qatar Turkmenistan Croatia Kyrgyz, Republic Romania United Arab Emirates Czech Republic Laos Russia United Kingdom Denmark Lebanon San Marino United States of America ^ Egypt Luxemburg Saudi Arabia Uzbekistan Fiji Malta Senegal * Venezuela Finland Mauritius Seychelles Vietnam France Zimbabwe* * Gazette Double Taxation Agreements. ^ Limited Agreements. # Income Tax Exemption Order Currently, Labuan has been specifically excluded from Double Taxation Agreement with the countries as follows:- Australia Japan South Africa Seychelles Chile Luxembourg Spain United Kingdom Indonesia Netherlands Sweden Copy ShineWing TY TEOH. This publication contains information in summary form and is therefore intended for general guidance only. No person should rely on the contents of the aforesaid publication without first obtaining advice from a qualified professional person. ShineWing TY TEOH is not responsible for the results of any actions taken on the basis of information neither in this publication, nor for any error in or omission from this publication. ShienWing TY TEOH expressly disclaims all and any liability and responsibility to any person, whether a reader of this publication or not, in respect of anything, and of the consequences of anything, done or omitted to be done by any such person in reliance, whether wholly or partially, upon the whole or any part of the contents of this publication. Page 6 of 8

7 WHY ShineWing TY TEOH ShineWing TY TEOH is a leading regional chartered accountants, tax, transfer pricing, valuation and consulting group with office presences in Malaysia and Myanmar to provide a diverse spectrum of business solutions and consulting services to public listed companies, Fortune 500 companies, multi-national corporations, local small and medium companies representing a cross section of major industries. Registered Auditor of Public Company Accounting Oversight Board (PCAOB), USA Registered Auditor of The Audit Oversight Board (AOB), Malaysia Approved Auditor of Labuan Financial Services Authority (Labuan FSA), Malaysia Member firm of ShineWing International, Top 20 international accounting network and association. Joint Venture Partners of GCA, the valuation specialist in assets, business, financial and mining & energy, and group member of GreaterChina Professional Services Limited (8193.HK) Member firm of Praxity, the world s largest alliance of independent accounting firms. Member firm of Quantera Global, the world s leading, independent and global transfer pricing advisory firms. WHAT WE OFFER What sets us apart is a deep knowledge of a variety of industrial sectors, and the expertise and ability to develop tailored solutions for our clients operating within these industrial sectors. Audit & Assurance BPO & Business Advisory Cambodia Advisory China Advisory Financial & Transaction Advisory Migration Services Mineral & Energy Technical Advisory Myanmar Advisory Offshore Advisory Profit Improvement Risk & Governance Advisory Sustainability Advisory Tax & GST Advisory Transfer Pricing Advisory Valuation Advisory MYANMAR OFFICE LOCATIONS Mr T S TEOH, Executive Director Want to know about ShineWing TY TEOH? E tsteoh@shinewingtyteoh.com Visit our website MALAYSIA LABUAN Malaysia Kuala Lumpur Johor Bahru Penang Perak Labuan Page 7 of 8

8 About ShineWing TY TEOH ShineWing TY TEOH is a leading regional chartered accountants, tax and consulting group with office presences in Malaysia and Myanmar to provide a diverse spectrum of business solutions and consulting services to the corporate client including Audit and Assurance, Business Process Outsourcing (BPO) & Business Advisory, Cambodia Advisory, China Advisory, Financial & Transactions Advisory, Migration Services, Myanmar Advisory, Offshores Advisory, Profit Improvement, Risk & Governance Advisory, Tax & GST Advisory, Transfer Pricing and Valuation Advisory Member firm of ShineWing International and Praxity; Registered Auditor of Public Company Accounting Oversight Board (PCAOB), USA; Registered Auditor of Public Interest Entities with The Audit Oversight Board (AOB) Malaysia which established under Part IIIA of Securities Commission Act 1993; Approved Auditor of Labuan Financial Services Authority (Labuan FSA), Malaysia. Strategic joint venture partner of GCA, valuation specialist and group member of GreaterChina Professional Services Ltd (8193.HK); Member of Quantera Global, transfer pricing specialist; MALAYSIA Kuala Lumpur Level 4, Wisma TY TEOH, 11 Jln PJU 1A/41B, NZX Commercial Centre, Ara Jaya, Petaling Jaya, Selangor. T F AUDIT l TAX & GST l ADVISORY l TRANSFER PRICING I VALUATION Johor Level 2, 6 Jalan Mutiara 1/1, Taman Mutiara Mas, Skudai, J.B., Johor. T F Ground Floor, No , Jln Salleh, Muar, Johor. T F Penang Level 18, Unit A1 & A2, Gurney Tower, 18 Persiaran Gurney 10250, Penang. T (Tax) F T (Audit) Perak 160A, Taman Desa Bintang II, Jln Lumut, Sitiawan, Perak. T F Labuan Level 14 (B), Main Office Tower, Financial Park Labuan Complex, Jalan Merdeka, Federal Territory of Labuan, Labuan. T F All Rights Reserved ShineWing TY TEOH