Requirements for Labuan Companies!

What are Labuan Companies: A Labuan Company can be a company:

• Limited by shares or by guarantee.

• It can be an unlimited company.

• May join in the activities of business and delight in the tax benefits laid out in the Labuan Business Activity Tax Act 1990 (LBATA).

• Carry out business activities which are allowed in the country of Malaysia or Labuan.

• It owns a license to do certain businesses as prescribed under the rules of Labuan Financial Services and Securities Act 2010 or the rules of Labuan Islamic Financial Services and Securities Act 2010

A Labuan Company can be established by a resident or non-resident individual subject to any notifications prescribed under the Labuan Companies Act 1990 (LCA). Also, these companies can develop their controlling stakes in any of the Malaysian domestic company and are permitted to undertake shipping operations with non-residents.

Registration:

Every Labuan Company needs to adhere to the rules provided by the LCA for registration. The Act necessitates engaging the services of a trust company to act as its incorporation agent.

• Provides the address of the registered office and the resident secretary.

• Ensure to perform all the secretarial duties of the Labuan Company including the filing of all the documents specified under the LCA.

• Ensure to make easy access of the appointment of the company’s trust officers. For instance, the appointment of the resident director and resident secretary

A Labuan Trust Company also needs to adhere to same requirements as that of a normal limited company. Every Labuan Company needs to have a fully operational office in Labuan. The incorporation of a company in Malaysia is comparatively easy. Below are some of the characteristics of a Labuan Company:

1. Functional Office in Labuan with separate telephone and facsimile lines and letterheads.

2. The Company should have at least one director and one secretary who is a resident in Malaysia.

3. There is a maximum or minimum limit for share capital. Also, there is no specific requirement for authorized capital as well. However, for a Labuan Trust Company, it is essential to maintain working capital funds of minimum 150,000 RM or the equivalent foreign currency.

4. A Labuan Company is allowed to issue treasury shares.

5. The LCA also permits amalgamation of two or more Labuan companies into one.

6. Comply with all the notifications and guidelines issued by the LCA. Also, trust companies are required to adhere to all the instructions mentioned or issued by the Labuan FSA

The Labuan companies have great opportunity to flourish as the scope has increased considerably nationwide and internationally.