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Labuan |
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Labuan Key Corporate Features
The Federal Territory of Labuan is part of Malaysia and comprises seven small islands of which Pulau Labuan is the largest. Labuan lies off the north-west coast of Borneo and not far from Brunei Darulssalam. Labuan has a tropical climate, which is warm and humid throughout the year. Daytime temperatures average 30°C with two seasonal monsoon periods stretching from April to June and from September to December.Population The Island of Labuan covers an area of approximately 92 sq km, and has an estimated population of 70,000. Political Structure The Federal Territory of Labuan is part of
Malaysia and responsibility for its administration falls directly
under the Prime Minister's Department. Malaysia is a multi-racial
and multi-religious nation consisting of 13 States (11 states in
Peninsula Malaya and 2 states in the Borneo Island) and three Federal
Territories (which are the capital, Kuala Lumpur, Labuan and Putra
Jaya). Parts of it were formerly under British control, but it obtained
independence on 31 August 1957. On 16th September 1963, Malaysia
was formed with the joining of Sabah, Sarawak and Singapore The form of Government is a Constitutional Monarchy with the King as head of state. The nation is economically strong and politically stable. Labuan has modern office space and telecommunication facilities. More than 50 of the world's top banks have branches in Labuan. The official language is Bahasa Malay. However, English is widely spoken and many documents and publications are available in English (including the Labuan offshore legislation). The Malaysian currency is the Ringgit. Apart from certain exceptions, offshore companies in Labuan are required to carry on business in a foreign currency. Labuan offshore companies are treated as non-resident for the purposes of the Exchange Control Act 1953. The Malaysian legal system is based on the English model. Special laws applicable to the offshore industry in Labuan have been enacted. Arbitration is permitted. Disputes are heard in camera. Final appeal lies with the Supreme Court. On 6th November 1989, the Government of Malaysia declared the Federal Territory of Labuan as an International Offshore Financial Centre. The following statutes apply: The Offshore Companies Act 1990. In addition, the Labuan Offshore Financial Services Authority (LOFSA) has been established as the sole regulatory body for those statutes. Type of Company for International Trade and Investment Offshore Company. This is the procedure to incorporate: submission to the Registry of the Memorandum and Articles of Association, consent to act as a director form, Statutory Declaration of Compliance and the requisite fee.An Offshore Company shall only carry on business in, from or through Labuan. An Offshore Company may not: carry on business with a resident of Malaysia except as permitted by the Offshore Banking Act 1990; carry on the business of Banking or Insurance or such similar business unless it is licensed so to do under the Offshore Banking Act 1990 or the Offshore Insurance Act 1990; carry on business in the Malaysian currency except for defraying its administrative and statutory expenses; carry on business of shipping or petroleum operations in Malaysia or carry on business as a trust company. An Offshore Company is not treated as carrying on business with residents of Malaysia if it makes or maintains deposits with a person carrying on business in Malaysia; it makes contact with professional advisors carrying on business in Malaysia; it prepares and maintains books and records in Malaysia; it acquires or holds any lease or property for operational purposes or accommodation of its employees; it holds directors - or members - meetings within Malaysia; it holds shares, debt obligations, or other securities in a company incorporated under the Offshore Companies Act 1990 or in a domestic company, or holds shares, debts obligations or other securities for the purposes of a transaction entered in to in the ordinary course of a money-lending business. A company incorporated in Labuan has the same powers as a natural person. Language of Legislation and Corporate Documents English. Names resembling the name of a company incorporated or registered under the Companies Act 1965 are not acceptable. Names that in the opinion of the Registrar suggest Royal or government patronage are not applicable. Names, which the Registrar considers undesirable, will be rejected. Offshore companies are allowed to have names in a foreign language, provided they use the Latin alphabet. The following names require consent or a licence: bank, building society, insurance, assurance, reinsurance, fund management, investment fund, trust, trustees, Chamber of Commerce, university, municipal or their foreign language equivalents. The following suffixes denote limited liability: Corporation, Incorporated, Limited, Société Anonyme or Sociedad Anónima or the relevant abbreviations. If the Malaysian word Berhad is used then it must be preceded by-(L)- to denote that the company is incorporated in Labuan. There is no disclosure of beneficial ownership to government authorities. The standard authorised capital is US$ 10.000; divided in to 10.000 shares of US$ 1. The minimum issued capital is one share, which may be fully or partly paid. The following classes of shares are permitted: registered shares of par value, preference shares, redeemable shares and shares with no voting rights. Offshore companies that are trading pay 3% on net audited profits or the sum of RM 20.000. Offshore companies that do not trade do not pay tax. Labuan, being a region of Malaysia, is party to over forty double tax agreements. The countries include: Albania, Australia, Austria, Bangladesh, Belgium, Canada, China, Czech Republic, Denmark, Finland, France, Germany, Hungary, India, Indonesia, Italy, Japan, Korea, Malta, Mauritius, Mongolia, Netherlands, New Zealand, Norway, Pakistan, Papua New Guinea, Philippines, Poland, Romania, Saudi Arabia, Soviet Union, Singapore, Sri Lanka, Sudan, Sweden, Switzerland, Thailand, Turkey, UAE, UK, Vietnam, Yugoslavia and Zimbabwe.Licence Fees RM 2,600 per annum. A set of accounting records must be kept in Labuan. Non-trading (i.e. investment and holding companies) and trading companies which elect to pay tax of RM 20.000 p.a. are not required to file financial statements. Such companies are exempt from appointing an auditor if they are not a licensed offshore bank or insurance company, did not invite the public to subscribe for shares or debentures or to deposit money with or lend money to the company and the members of the company have resolved that no auditor be appointed. A trading company, which pays 3% of audited net profits, is required to appoint an auditor and file audited financial statements. There is a filing fee of RM 50 for "adoption of accounts" and if the accounts of the Labuan Company have been audited, then there is a filing fee of RM 50 for the "lodgement of the said audited accounts". Note that a Labuan company’s accounts need not be audited unless the company wishes to pay 3% of the net profit (as per the audited accounts). The minimum number of directors is one. Corporate directors are allowed. Directors may be of any nationality and need not be resident in Labuan or Malaysia. A Labuan company must have a resident company secretary, who must either be an officer or a subsidiary of a licensed Labuan trust company. Additional company secretaries, who need not be Malaysian resident, may be appointed. The minimum number of shareholders is one.Contact: info@personaloffice-bv.com
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