What is the corporate tax needed to pay in Labuan, Malaysia?

Labuan, Malaysia is a region that has an incentive tax for business. Opening a company in Labuan, the owners will gain more benefits from the tax exemptions policy for business activities. Therefore, most foreign companies are interested in starting a business in Labuan, Malaysia because of its tax policy.

In fact, the annual corporate tax rate for each company isn't small. As a result, companies always want to optimize their tax lines to increase their revenue.

Thanks to open trade policy as well as the incentive tax rates for businesses, Labuan has become a place to attract many foreign businesses. Many overseas companies are willing to open more subsidiaries or invest in Labuan.

In addition, Labuan (Malaysia) is considered as the lowest tax jurisdiction in Asia. Businesses will not be required to pay tax if profits are earned from business operations outside of Labuan.

The Labuan company is also known as Labuan International Company. There are 4 types of companies with different tax rates for a Labuan International Company. The foreign business owners can consider the following kinds of business entities:

• Investment Holding Company

  The company’s investment income does not have tax requirement as well as auditing without any trading activities.

• Trading, Exporting, and Importing Company

  The tax rate is 3% on the net profits and the companies need to file the annual audit report.

• Trading Company

  The business owners can choose one in two options:

  • Pay the 3% corporate tax
  • The flat tax of RM 20,000

• Non - Trading company

  If the business income from outside Malaysia, the companies do not need to pay tax and file the audited report.

Contact One IBC to have the best solution for your company in Labuan, Malaysia. We can support the customers to choose the most suitable jurisdictions which fit the client’s strategy. With many years of experience in offshore company incorporation, One IBC believes that the customers will be completely satisfied with our services.