Labuan Business Activity
What Why you should consider managing and planning for your wealth, succession planning and charitable foundations in Labuan
Tax Incentives
The following income is exempted from income tax:
- Dividends received from Labuan entities
- Distributions received from Labuan trusts and foundations (including both Islamic) by the beneficiaries
- Distributions of profits by Labuan partnerships (including Islamic partnerships)
- Interest received by residents*, non-residents* or another Labuan entity from a Labuan entity.
- Royalties and fees for services, advices or assistance specified in Section 4A (i) and (ii) of the Malaysia Income Tax Act 1967 (ITA), received by a non-resident or another Labuan entity from a Labuan entity.
- Other gains or profits under Section 4(f) of ITA received by a non-resident from a Labuan entity
No withholding tax is imposed:
- on payments to non-residents for interest, royalties, fees for services, advice or assistance, or other gains or profits under Section 4(f) of ITA by a Labuan entity
- on payments to non-residents for use of moveable properties by a Labuan licensed leasing company.
Labuan entity carrying on a Labuan business activity | Minimum number of full time employees in Labuan | Minimum amount of annual operating expenditure in Labuan (RM) | |
1. | Labuan insurer, Labuan reinsurer, Labuan takaful operator or Labuan retakaful operator | 4 | 150,000 |
2. | Labuan underwriting manager or Labuan underwriting takaful manager | 4 | 100,000 |
3. | Labuan insurance manager or Labuan takaful manager | 4 | 100,000 |
4. | Labuan insurance broker or Labuan takaful broker | 4 | 100,000 |
5. | Labuan captive insurer or Labuan captive takaful | 4 | 100,000 |
6. | Labuan International Commodity Trading Company | 3 | 3,000,000 |
7. | Labuan bank, Labuan investment bank, Labuan Islamic bank or Labuan Islamic investment bank | 3 | 180,000 |
8. | Labuan trust company | 3 | 120,000 |
9. | Labuan leasing company or Labuan Islamic leasing company | 2 | 100,000 |
10. | Labuan credit token company or Labuan Islamic credit token company | 2 | 100,000 |
11. | Labuan development finance company or Labuan Islamic development finance company | 2 | 100,000 |
12. | Labuan building credit company or Labuan Islamic building credit company | 2 | 100,000 |
13. | Labuan factoring company or Labuan Islamic factoring company | 2 | 100,000 |
14. | Labuan money broker or Labuan Islamic money broker | 2 | 100,000 |
15. | Labuan fund manager | 2 | 100,000 |
16. | Labuan securities licensee or Labuan Islamic securities licensee | 2 | 100,000 |
17. | Labuan fund administrator | 2 | 100,000 |
18. | Labuan company management | 2 | 100,000 |
19. | Labuan International Financial Exchange | 2 | 120,000 |
20. | Self-regulatory organisation or Islamic self-regulation organisation | 2 | 120,000 |
21. | Holding Company | 2 | 50,000 |
Do you need further clarification?
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