Labuan Offshore Company
Formation of an Offshore Company in Labuan
Offshore Companies are allowed to have names in a foreign language, provided they use the Latin alphabet. The words: Bank, building society, insurance, assurance, reinsurance, fund management, investment fund, trust, trustees, Chamber of Commerce, university, municipal or their foreign language equivalents require approval. To denote limited liability, any of the following are permitted: Corporation, Incorporated, Limited, Sociètè Anonyme or Sociedad Anonima 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.
Memorandum And Articles Of Association
Offshore companies in Labuan are incorporated by submission to the Registry of the Memorandum and Articles of Association, consent to act as a director form, Statutory Declaration of Compliance and the payment of requisite fees. An annual fee of RM 2,600 is payable 30 days after the anniversary date of incorporation to renew the registration of the company for another 12 months.
A minimum of one shareholder is required which may be an individual or a corporate body. The details of company beneficial owners and shareholders are not part of the public records.
There is no minimum authorized share capital requirement, however our standard companies include an authorized share capital of US$10,000 ordinary share at a nominal value of US$1 per share which one share is required to be issued. Share capital can be held in any currency other than Malaysian Ringgit. Registered shares of par value, preference shares, redeemable shares and shares with no voting rights are all permitted. Bearer shares are not permitted.
There must be at least one director, which can be either corporate or individual. The director may be a non-resident or resident of Malaysia. Trust Company may be appointed to be a nominee resident director of the Labuan offshore company. Particulars of the directors must be filed with the Companies Registry.
Registered Office And Local Agent Or Secretary
It is a requirement under the OCA that an offshore company must employ the services of a trust company, which is a company incorporated under the Companies Act 1965 and registered under the Labuan Trust Companies Act 1990, to provide trust company services to the offshore companies. The trust company provides the registered office, Resident Secretary and performs the secretarial duties of the offshore company, such as lodgment of any documents required under the OCA, and also makes available any of its Trust Officer for appointment as Resident Director.
All companies must hold a members meeting to receive the accounts (audited or unaudited) not more than 9 months from the date of closing the accounts.
7 – 14 business days.
Labuan offshore companies who are engaged in offshore trading activities are subject to corporate profits tax, which will be levied at 3% on assessable net profits as per the audited accounts. A return and a statutory declaration will be required to be submitted. Alternatively, the companies can elect to pay a flat tax of RM20,000. In this case, a statutory declaration and a prescribed from will be required to be submitted.
For offshore companies who are engaged in non-trading activities, no tax shall be payable for income earned through these activities. In such cases only a statutory declaration will be required to be submitted.
Audit And Financial Returns
A Labuan Offshore Company needs to have an audit performed by an approved auditor if the company is engaged in offshore trading activities and does not elect to pay the flat tax of RM20,000. An annual return must be filed 30 days prior to the companies’ anniversary date of incorporation. A set of accounting records must be kept in Labuan.