LABUAN

Geographical position. The isle of Labuan is situated in the Western part of Malaysia. Labuan is a federal territory of Malaysia, with the area 92 square km. The population of Labuan is 26,500 people. The official language is Malaysian.

The political system of Malaysia. It is an independent country having its own government and constitution. The legislative system is based on the British Common Law. The official currency is Malaysian Ringghit RM (3.9 RM/USD).

1	Corporate Law	Off-Shore Companies Act, 1990
2	The form of tax-free company	Off-shore company (OC), hereinafter referred to as the “Company”
3	Permitted activities	Any activity not prohibited by the law. Transactions with residents of Malaysia and Labuan
4	Prohibited activities	A special license for banking, insurance, reinsurance and trust services is required.
5	Taxation	Two types of the Company’s operation are distinguished: 1) trading operations: trade, banking, insurance, except transportation by sea and oil business 2) non-trading operations: holding and investment operations. A Company engaged in trading operations is taxed upon the Company’s choice by: 1) 3% net profit tax, or 2) fixed tax of RM 20,000 A Company engaged in non-trading activity only is not imposed with the income tax. No other profit taxes, capital gains tax, property tax and other taxes exist.
6	Capital export taxes	No additional taxes on the exports of dividends, interest and royalties. An off-shore company may use double taxation avoidance treaties in case: 1) at least one director is Labuan resident; 2) the Company pays 3% trade activity tax; 3) the management and control of the Company’s activity are performed from the territory of Labuan
7	The period of registration	1 to 2 days
8	The possibility to buy a shelf company	None
9	The name of the Company	Should not be identical or similar to any one registered. Only the Latin alphabet is used. The name should contain the letter “L”. The words “Assurance”, “Bank” and any other words or word combinations having the same meaning may not be used in the name of the Company.
10	The documents required for the registration	Memorandum of incorporation, the Articles of Association
11	Who signs the incorporation documents?	Subscribers whose function is only to sign the documents of incorporation and appoint the first director
12	The Company’s share capital	The share capital of the Company is authorized, without the requirement of obligatory payment
13	The share capital offered	USD 15,000
16	Shares	The issue of registered shares and bearer shares with the face value is allowed
15	Shareholders: -- minimum number -- nominee shareholders -- trust ownership	a single private individual or corporate entity permitted permitted
16	Whether the law provides non-disclosure of the information: -- on the beneficial owner of the Company	The beneficial owner of the Company is not registered in Labuan
17	Directors: -- minimum number -- ethnic origin and nationality -- status	One private individual or a corporate entity Is not determined, however a local director is needed to use the double taxation avoidance treaties All rights except those being within the exclusive competence of the shareholders (determined by the Articles of Association and/or the law)
18	The existence in the territory of Labouan of: -- a registered office -- a registered agent/ secretary	Obligatory Obligatory
19	Meetings of shareholders/ directors	The meetings may be held in any part of the world and the minutes may be kept in any place (to use the treaties, meetings should be held in Labouan)
20	The requirement of: -- the accounting -- preparing the annual report -- submission of the auditors’ opinion	Yes Yes Yes, if the Company is paying the 3% income tax
21	The information available upon request of any third parties	The name of the Company, its registered agent and registered office
22	Documents kept in the registered office	No requirements
23	Double taxation avoidance treaties	Australia, Austria, Bangladesh, Belgium, Canada, China, Denmark, Finland, France, Germany, India, Indonesia, Italy, Japan, Korea, Mauritius, the Netherlands, New Zealand, Norway, Pakistan, Philippines, Poland, Romania, Singapore, Sri Lanka, Sweden, Switzerland, Thailand, United Kingdom, USA, Vietnam
24	Currency control	None