Labuan Companies - Labuan Structures

A Labuan company:

May be a company limited by shares or by guarantee or an unlimited company.
Able to participate in business activities and enjoy attractive tax benefits provided under the Labuan Business Activity Tax Act 1990 (LBATA).
Able to out any business that is permitted in Malaysia in, from or through Labuan.
Would need to be licensed if it intends to undertake specific businesses as defined under the Labuan Financial Services and Securities (Amendment) Act 2022 (Act A1654) or the Labuan Islamic Financial Services and Securities (Amendment) Act 2022 (Act A1655), which may include the banking, insurance/insurance-related, fund management, leasing, factoring and company management businesses.

Residents and non-residents of Malaysia are permitted to establish Labuan companies.

Business transactions of Labuan companies must be made in currencies other than the Malaysian Ringgit, except for the purpose of defraying administrative and statutory expenses as well as receiving fees and commissions.

Labuan companies can own controlling stakes in a Malaysian domestic company.

Please visit REEFS (Real Time Search of Company Status) in Labuan FSA Coral to search for companies in Labuan.

Go to REEFS

key highlights

16,905 number of Labuan companies registered and operated in 2020: Asia and The Pacific (59.7%), Far East (14.6%), America (10.4%), Europe (12%) and Middle East and Africa (3.3%)

Search for Labuan Companies

Please visit REEFS (Real Time Search of Company Status) in Labuan FSA Coral to search for companies in Labuan.

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Characteristics of a Labuan Company
Registration Requirements
COR@L System

Characteristics of a Labuan Company
It must have at least one director.
It must have a resident secretary.
There is no minimum capital and no authorised share capital requirements.
The shares issued shall have no par or nominal value.
Treasury shares are allowed.
It may issue shares of different classes and of different rights, but no bearer shares are allowed.
Amalgamation by merging two or more companies into one is allowed.
It is a requirement to have a registered office in Labuan which is the office of the resident secretary.
No person may divulge to others any information concerning the shareholding, management and any business, financial or other transactions of a Labuan company
Registration Requirements
The LCA requires a Labuan company to employ the services of a trust company to act as its incorporation agent. The services offered by a trust company include, but are not limited to, the following:

Provides the registered office and resident secretary.
Performs the secretarial duties of the Labuan company including lodgement of any documents required under the LCA.
Makes available any of its trust officers for appointment as resident director and resident secretary.
COR@L System

COR@L System is an online core registration system owned by Labuan FSA's Registrar Of Companies Unit (ROC). This is an online delivery system that promotes convenience and security to its users with real-time access. "COR@L" system is an acronym for “Corporate Online Registry at Labuan FSA”.

The COR@L system can be accessible via the secured encrypted internet connection on the following URL: https://www.lfsacoral.gov.my

Characteristics of a Labuan Company
It must have at least one director.
It must have a resident secretary.
There is no minimum capital and no authorised share capital requirements.
The shares issued shall have no par or nominal value.
Treasury shares are allowed.
It may issue shares of different classes and of different rights, but no bearer shares are allowed.
Amalgamation by merging two or more companies into one is allowed.
It is a requirement to have a registered office in Labuan which is the office of the resident secretary.
No person may divulge to others any information concerning the shareholding, management and any business, financial or other transactions of a Labuan company.
Registration Requirements
The LCA requires a Labuan company to employ the services of a trust company to act as its incorporation agent. The services offered by a trust company include, but are not limited to, the following:

Provides the registered office and resident secretary.
Performs the secretarial duties of the Labuan company including lodgement of any documents required under the LCA.
Makes available any of its trust officers for appointment as resident director and resident secretary.
COR@L System
COR@L System is an online core registration system owned by Labuan FSA's Registrar Of Companies Unit (ROC). This is an online delivery system that promotes convenience and security to its users with real-time access. "COR@L" system is an acronym for “Corporate Online Registry at Labuan FSA”.

The COR@L system can be accessible via the secured encrypted internet connection on the following URL: https://www.lfsacoral.gov.my

Incorporation and Registration Procedures

The general process of incorporating a Labuan company involves the following:

The applicant must be aware of the legislative framework of Labuan IBFC, and the powers and duties of a Labuan company and its members under the Labuan Companies Act 1990 (LCA).
The applicant must appoint a licensed Labuan trust company, which should conduct its own due diligence on the prospective client.
Reservation of a company name is subject to the following:
- The client may choose any name, but Labuan FSA has the discretion to reject the name if it is undesirable or involves a name that the Registrar is not willing to accept.
- The name shall contain any word or abbreviation thereof in the national language of any country with an accurate and certified rendition of the name in the English language provided.
- Application fee for reservation of name is USD15.
- Approval by the Registrar is within 24 hours, and the name will be reserved for a period of three months.
The application for incorporation of a company must be accompanied by the following documents and payments:

Memorandum and Articles of Association of the proposed company
Statutory declaration of compliance by the trust company
Consent to act as a director(s)
Individual forms filled up by each director; and
Relevant fees.

For activities that require licensing, prior approval to conduct such business must be obtained before incorporation.

Type of fees

Fees

Form

General Fees

Application for the reservation of company name

USD15

Incorporation Fees

Statutory declaration of compliance

Nil

Consent to act as director

Nil

Memorandum and Articles of Association (Labuan company)

Nil

Paid-up Share Capital

RM50,000 and below

USD300

Nil

Exceeds RM50,000 but less than RM1 million

USD600

Nil

RM1 million and above

USD1,500

Nil

Registration Fees

Statutory declaration by a Labuan trust company as an agent of a foreign Labuan company

Nil

Return on particulars and changes of directors and secretaries

Nil

Memorandum and Articles of Association (foreign Labuan company)

Nil

Registration of a foreign Labuan company

USD2,000

Nil

Annual Fees

Labuan company

USD800

Nil

Foreign Labuan company

USD1,500

Nil

Approval process

Upon lodgement of complete documentation and payment of fees as well as clearance from the due diligence process conducted by Labuan FSA, a Labuan company can be approved for incorporation or registration within 24 hours.

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For company search, please click on the link provided : https://www.lfsacoral.gov.my/reefs/

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FAQs

1. What is Labuan banking?
Labuan banking means the business of receiving deposits on current accounts, deposit accounts, savings accounts, and includes the investment banking business, Labuan financial business, Islamic banking business and such other transactions and terms and conditions as specified by Labuan FSA in any currency including Malaysian Ringgit where permitted by Bank Negara Malaysia.
2. What is investment banking?
Investment banking means the business of providing credit facilities and consultancy and advisory services relating to corporate and investment matters, including making investments on behalf of any person. Other activities include undertaking foreign exchange transactions, interest rate swaps, dealings in derivative instruments or derivative financial instruments or any other similar risk management activities.
3. What is Islamic banking?
Islamic banking is defined as a banking business that is in accordance with Shariah principles.
4. Who may apply for Labuan banking licence?
Organisations that meet the following minimum criteria may apply for a Labuan banking licence:
Must be a bank or financial institution
Possesses a sound track record
Accorded a good credit rating by acceptable rating agencies
Supervised by a competent regulatory authority; and
Conforms to generally accepted standards of international banking practices or the Bank for International Settlements (BIS).
5. What is the minimum working minimum fund for an investment bank?
RM10 million or its equivalent in any other currency.