Quick answer
A Labuan company is incorporated under the Labuan Companies Act 1990 and regulated by the Labuan Financial Services Authority (Labuan FSA). Incorporation must be done through a licensed Labuan trust company, which also provides the resident secretary and registered office in Labuan. Labuan companies are used for international trading and investment holding, and must meet economic substance requirements to enjoy Labuan tax treatment.
Last reviewed： · Reviewed by：ONEKEY BIZ compliance team
01
Overview
Labuan is Malaysia's international business and financial centre, with its own legal framework separate from the Companies Act 2016. A Labuan company is incorporated under the Labuan Companies Act 1990 and supervised by Labuan FSA, and it is typically used for cross-border trading, holding investments, or regional service businesses.
The structure has rules a Sdn. Bhd. does not. The application must be made through a licensed Labuan trust company; the company must have a resident secretary and a registered office in Labuan, both provided by that trust company; and the choice between a trading and a non-trading (holding) activity drives how it is taxed.
Tax treatment under the Labuan Business Activity Tax Act 1990 depends on meeting economic substance requirements — an adequate number of full-time employees in Labuan and an adequate amount of annual operating expenditure there, set by activity. A Labuan company that does not plan for substance can end up taxed under the general Income Tax Act. We plan the structure and substance before incorporation, not after.
Who needs this
- Groups setting up an international trading or holding company
- Businesses serving regional clients outside Malaysia
- Investors holding shares in overseas companies
02
Documents you need to prepare
Structure
- Proposed company name (1–3 options)
- Intended activity: trading or non-trading (holding)
- Expected substance plan: staff and annual operating expenditure in Labuan
Directors & shareholders
- Passport or IC copies
- Proof of residential address
- Curriculum vitae or business profile for due diligence
Corporate shareholders
- Certificate of incorporation, constitution and register of directors
- Board resolution approving the investment
- Ultimate beneficial owner details
- The licensed trust company will carry out its own due diligence on every owner and director.
- Annual Labuan FSA fees and resident-secretary fees recur every year after the first.
03
How to get it done with ONEKEY BIZ
- 1Structure & substance plan Week 1
We confirm trading vs non-trading activity and the substance required.
- 2Due diligence Week 1–2
Owner and director documents collected for the licensed trust company.
- 3Name & application Week 2–3
Name reservation and incorporation filed with Labuan FSA via the trust company.
- 4Incorporation Week 3–4
Labuan FSA issues the certificate of incorporation.
- 5Post-incorporation Done
Resident secretary, registered office and statutory records set up.
You do
- Decide the activity and ownership
- Provide due-diligence documents
- Commit to the substance plan
We do
- Advise on structure and substance
- Coordinate with the licensed Labuan trust company
- Prepare incorporation documents
- Set up the first-year secretary and office
04
What you receive
Issued by Labuan FSA.
Company's founding documents and registers.
Appointment in Labuan by the licensed trust company.
What the company must maintain each year to keep its Labuan tax treatment.
Official sources
Frequently asked questions
Can a Labuan company trade with Malaysian customers?
Labuan entities face restrictions on dealing domestically; we check your intended business before choosing Labuan.
Is a Labuan company tax-free?
No. Labuan trading activities are taxed under the Labuan Business Activity Tax Act if substance requirements are met; otherwise general income tax rules apply.
Do I need to be in Labuan?
No, but the company must meet the substance requirements in Labuan for its activity.