Labuan is a series of islands off the coast of the state of Sabah in East Malaysia. At the fall of the Majapahit Empire in the 14th century, Labuan became part of the Sultanate of Brunei. It was historically quiet until 1846 when the British gained control of Labuan. They believed Labuan could become an important hub similar to Singapore and had high hopes for it. Under British rule the island was re-named to ‘Victoria’ and it served as a naval base to fight regional piracy. Almost 150 years later, Labuan was granted independence in 1963. It became a part of the state of Sabah joining Malaysia. In 1984 Sabah ceded Labuan which gave Labuan even more independence as a federal territory of Malaysia. Labuan is now a tourist attraction and a growing financial center.
The Offshore Companies Act (OCA) in 1990 enabled the establishment and registration of foreign offshore companies in Labuan. This allowed a foreign company that was incorporated under the laws of another country to also be able to apply for registration in Labuan. The offshore company can be limited by shares or by guarantee. These companies may also participate in offshore activities and receive lucrative tax treatment under the Labuan Offshore Business Activity Tax Act of 1990. An Offshore Foreign Company may only conduct business in, from or through Labuan.
The Offshore Company may not do the following:
- Conduct business with a resident of Malaysia except permitted by the Offshore Banking Act of 1990.
- Conduct Banking, Insurance, or similar business unless it is licensed to do so in the Offshore Banking Act of 1990 or the Offshore Insurance Act of 1990.
- Conduct business in Malaysian currency except for financing its administrative and legal expenses.
- Conduct a shipping or petroleum business in Malaysia.
- Conduct business as a trust company.
The Offshore Companies Act was recently amended allowing Malaysians to own offshore companies and permitting foreign-owned offshore companies subject to certain specifications to invest in Malaysia.
Registration of a company in Labuan from formation to incorporation should take between three to five working days after completing the required background checks, but it may take longer depending upon your cooperation. You do not need a physical office in Labuan in order to have a company incorporated. This does not apply for Labuan companies that are applying for a marketing office and/or all licensed entities like insurers, bankers and money brokers all of which must have physical offices within the region. At least one shareholder and one director are required to incorporate an offshore company in Labuan. Both the shareholder and director can be corporate companies. Labuan promotes confidentiality and any company information is not available for public access.
In order to register or incorporate a company in Labuan, there are several required documents. The documents vary depending on the structure of the company, but all registration documentation including the Memorandum and Articles of Association must be approved by the proper authorities. In addition, before incorporation, you must meet the required number of directors and all directors must provide certified copies of their individual identities. In order to stream-line the application process, provide all required documentation and let the professionals expedite the registered incorporation. The documents needed must be in the English language or accompanied by an English notarized translation.
Documents Required :
- A notarized copy of a valid passport (one copy for each Shareholder, Director, Beneficial Owner, or Authorized Signatory)
- A proof of residential address dated within the last 3 months (for example: a utility bill: one copy for each Shareholder, Director, Beneficial Owner, or Authorized Signatory)
- A notarized copy of a Bank reference (for each Shareholder, Director, Beneficial Owner, Authorized Signatory)
- A Curriculum Vitae (CV) (for each Director and Shareholder)
- If Shareholders and/or directors are legal entities, it is required to submit a full set of certified company documents. If the company has been operating over a year, a certificate of Good Standing must be submitted.
- You must submit three different company names in order of preference
- Any paid-up capital
The formation of a company in Labuan days takes approximately 3 days since the moment we have received all the necessary documents.