General Information

The Federal Territory of Labuan comprises of seven small islands located off the northeast coast of Borneo not far from Brunei. Labuan is a politically stable part of Malaysia and responsibility for its administration falls directly under the Prime Minister’s Department. In November 1989, the Government of Malaysia declared Labuan an International Offshore Financial Centre and in 1990 the Offshore Companies Act was enacted. The Malaysian government has committed substantial resources to the development of Labuan and as a result Labuan is fast becoming one the leading offshore centres of Asia. It is located on the major shipping and air routes of the Asian region. The combination of a well-developed financial and professional infrastructure and an advanced economy make Labuan an extremely attractive environment for the establishment of offshore companies Labuan is part of Malaysia, and Malaysian company law applies there. Most foreign companies wanting offshore status in Labuan will use Offshore Company or Limited Partnership status, see below. These offshore forms are subject to Malaysian Company law except as described below. Regular Malaysian companies can be used in Labuan, but will not receive the tax and other privileges accorded to Offshore Companies.

Generally, companies incorporated in Malaysia are regulated by the Malaysian Companies Act, 1965. The types of companies are:

1) a company limited by shares, which can be private or public;
2) branch of a foreign company;
3) partnership or sole proprietorship.
4) Foreign investors normally conduct their businesses in Malaysia in the form of a private company limited by shares.

Incorporation of a company requires an application to be made to the Registrar of Companies to approve the proposed name by submitting the following forms:

1. Memorandum and Articles of Association
2. Statutory declaration of compliance with the Companies Act
3. Certificate of identity
4. Consent to act as director
5. Statutory declaration by persons before appointments as directors

Companies pay registration fees based on the amount of authorized capital, and both filing and stamping fees apply for submission of the above documents.

A company must have a minimum of two directors and one secretary, having their principal or only place of residence in Malaysia. A register of directors is kept at the registered office of the company and is available for public inspection.

Audited profit and loss accounts and annual returns are required.