LABUAN TRADING COMPANY

Setting up a trading company in Labuan jurisdiction is an ideal choice as it offers a wide range of business activities permissible under the regulation of Labuan Financial Services Authority. Additionally, Labuan jurisdiction being a midshore jurisdiction, offers the provision of dealing with the local market which is subjected to the local tax regime. With this advantage, more business opportunities and flexible trading methods are generated for foreign and local owners.

Labuan Trading Company1

KEY ADVANTAGES OF A LABUAN TRADING COMPANY


  • Corporate tax 3% on audited net profits for International dealings.
  • Corporate tax 24% on audited net profits for Malaysia dealings.
  • If annual revenue for Malaysia dealings is more than RM 500,000, 6% GST is applicable.
  • No withholding tax on interest, dividends, management fees and royalty.
  • No SST & GST.
  • No stamp duty on transfer of shares and in Labuan business activities.
  • 0% personal income tax on Directors’ fees for foreign Directors.
  • 50% tax rebate on personal income for foreign high management employments
  • 65% tax rebate on personal income of Malaysian high management employments.
  • More than 70 countries in DTA.
  • Able deal with Malaysian by permanently elects corporate tax 24%.
  • Labuan offshore banks do not have foreign exchange control.
  • Labuan offshore banks imposed no tax on interest earned on deposit placements.

Types of Business Under A Labuan Company


TRADING IMPORT & EXPORT CONSULTANCY E-COMMERCE
Trade in a vast variety of goods and services
*General Trader
*Commodities
*Dealmaker
Transactions of goods and services across jurisdictions
*Importer
*Exporter
*Merchant
*Distributor
*Wholesaler
A professional practice in giving expert opinion within a specific field
*Agency
*Trainer
*Advisor
*Coaching
Commercial transactions of goods and services over the Internet
*Online Store
*E-service provider
*Digital Products

 

INTERNET MARKETER FINANCIAL SERVICE PROVIDER PROFESSIONALS INVESTMENT HOLDING
Performing marketing strategies using the power of the Web
*Internet Advertiser
*Web Designer
*Blogger
*SEO Specialist
Providing financial products rendered by the financial institutes
*Forex Trader
*Banker
*Insurer
*Leasing
*Fund Management
Professions that specialises in a specific professional activity
*Lawyers
*Accountants
*Auditors
*Broker
*Financial Planner
*Fund Manager
Holding assets and shares of other companies to earn dividends, rent or interest
*Real Estate
*Equity
*Bonds & Funds
*Gold and Raw Minerals
*Company

Starting a Labuan Consultancy Business


The consultancy industry has gained a lot of traction in the recent years as the technology progresses enabling easy access to cross border consultancy services. A consultant is a specialist of a particular field offering professional advice on a specific subject matter. Setting up a Labuan company to conduct consultancy business is very easy as it does not require any trade license.

Starting a Labuan Import & Export Business


Presently, international trading being one of the most trending industries on the globe, is mainly due to the endless supply and demand of merchandises or commodities globally. As technology advances, international trade is becoming so convenient in securing transactions from every corner of the world. Within the Asia Pacific region, Labuan jurisdiction is very competitive due to its low corporate tax rate of 3% on net profit. In addition, senior management of the Labuan company is able to apply for a 2-year multiple entry working visa which permits them to stay in Malaysia.

Types of Consultancy Business:
  1. ADVERTISING FIRM is engaged by a business to promote good strategies in online and offline advertising.
  2. BUSINESS COACH is someone whom can identify the problem faced by the business and allocate a good solution to it which will help to maximise the profit of the business.
  3. ENGINEERING CONSULTANT is hired to inspect the progress of the projects or to advise on specific software and technical aspects.
  4. MARKET RESEARCH CONSULTANT is someone whom provide market research services on the particular field or country for new business exploration purposes.
  5. EDUCATION PLACEMENT is someone whom expertise in education sector in foreign countries where they can provide good recommendation to students for further education.
  6. COMPUTER CONSULTING FIRM can troubleshoot software and hardware problems.
  7. EDITORIAL SERVICE produces flyers, newsletters to corporate annual reports.
  8. TASKING CONSULTANT is someone whom works on tasks in a short term or part time basis for company that wanted to save some on their operating cost.
  9. EXECUTIVE SEARCH is someone whom seek for talented employers for businesses like a recruiting firm.
  10. INVESTMENT CONSULTANT is someone whom specialises in investment opportunities and diversifying wealth purposes for high net worth clients.
Types of Import and Export Businesses:
  1. EXPORT MANAGEMENT COMPANY (EMC) manages export operations for a domestic company which sells its product to overseas ranging from hiring dealers, invoicing customers, representatives and distributors, handling advertising, marketing and promotion to arranging logistics. These activities are being paid in commission or salary basis or retainer including commission.
  2. EXPORT TRADING COMPANY (ETC) works reversely from EMC, where they seek for foreign investors or buyers on the products they wanted and look for domestic company whom are ready to export. These activities are usually paid by commission.
  3. IMPORT/EXPORT MERCHANT operates like a free agent where they purchase goods from the domestic company, repack and ship them to the foreign buyers on its own. Therefore, the merchant bears all the risks and retain all the profits.
  4. MANUFACTURER'S REPRESENTATIVE is a salesperson who is an expert in a specific product or line of complementary products. Therefore, he can provide additional products assistance such as technical service and warehousing.
  5. DISTRIBUTOR OR WHOLESALER is a company that purchase imported goods and distributes them to the retailer or other agent until the products reaches the end users.
  6. REPRESENTATIVE is a sharp-witted salesperson who will introduce your products to the retailers in order to pass the sales to you.

Comparison between Hong Kong, Singapore and Labuan


HONG KONG SINGAPORE LABUAN
GENERAL
Political Stability Good Good Good
British Based System Yes Yes Yes
Disclosure of Beneficial Owners No No No
Governing Laws Onshore Laws Onshore Laws Offshore Laws
CORPORATE
Minimum No. of Director 1 2 (1 Resident Director) 1
Minimum No. of Shareholder 1 1 Corporate or 2 Individuals 1
Corporate Directors Allowed Yes No Yes
Company Secretary Yes Yes Yes
Minimum Paid Up Capital HKD 1 SGD 1 USD 1
Registered Office Yes Yes Yes
Annual General Meeting Yes Yes Yes
Location of Meeting Anywhere Anywhere Anywhere
Filing of Directors Info with Registry Yes Yes Yes
Filing of Shareholders Info with Registry Yes Yes Yes
TAXATION
Corporate Tax Rate 8% to 16.5% 0% to 17% 0% to 3%
Audit Report Yes Yes Yes
Double Taxation Act 29 Countries 70 Countries 74 Countries
Withholding Tax No 15% No
Bank Account in Multi-Currencies Yes Yes Yes
BUSINESS VISA
2-year multiple entry renewable No No Yes
Dependent visa No No Yes