An objective comparison between Labuan company & other business forms in Malaysia
GeneralSdn Bhd Co.Representative Office/Regional OfficeBranch of foreign Co.Labuan Company
Who can use?Local and foreignBy foreign corporation onlyBy foreign corporation onlyLocal and foreign
What business can be conducted?Can be used to in the local business in Malaysia, for example consulting, manufacturing, restaurant, travel agency, telecommunication, etc. Can be 100% foreign owned subsidiary.Not allowed to conduct business in Malaysia. Only suitable for foreign company intending to study Malaysian market before actually investing in full, to co-ordinate business activities, to identify source of raw material, etc.Can do most type of local business through the branch.1)Business with non-resident of Malaysia only. 2)No business dealing in Malaysian currency. 3)Tax: 0% for investment holding income. 3% or RM20k for trading income.
EntityPrivate limited companyNon-entityBranchPrivate limited company
1What is the Registering Body?Company Commission of MalaysiaMinistry of International Trade & IndustryCompany Commission of MalaysiaLabuan FSA
2Who do I see to register?Company secretaryCan register on your own or appoint consultantCompany secretaryTrust company in Labuan
3How long does it take to register?1 dayA few weeks2-3 days1 day
How long is duration?No limitUsually approval is given for 2 years onlyNo limitNo limit
4What is the minimum number of director?Min 2N/AN/A but may appoint local directorMin 1
5What is the minimum number of shareholder?Min 2N/AN/AMin 1
6Local shareholder?No required unless when doing business with government or government controlled companiesN/AN/ANo
7Local director?No, but if all directors are foreign, must have local addresses in MalaysiaN/AMay appoint local branch directorNo
8Can I do business with Malaysian residents?YesNOYesNO
9Size of paid up capital required?No unless applying for employment pass, in which case min is MYR500kN/A but to qualify to apply, foreign co MUST have at least MYR2m annual turn overN/ANo unless applying for employment pass, in which case min is MYR250k
10Is physical office required?YesYesYesNO
11Employment of localNot requiredNot requiredNot requiredNot necessary
12Opening of FX a/cYesYes, expenses onlyYesYes
13Opening of RM a/cYesYes, expenses onlyYesYes
14Buy or acquire lease of property in Malaysia?YesNoYesYes, but only for own use
Taxation, accounting & audit
15Who is the Tax Authority?Inland Revenue Board of MalaysiaNot subject to taxInland Revenue Board of MalaysiaInland Revenue Board of Malaysia
16Corporate tax rate26%NA26% of branch profit3% or MYR20k
17Taxation basisCurrent year basisN/ACurrent yearPreceding year basis
18Accounting and auditMandatoryN/AMandatoryMandatory
Costs
19Professional fee 1st yearMYR3500-MYR7000MYR5000 minMYR5000 minUSD3500
20Annual maintenanceMYR2000 excluding accounting, audit and tax complianceN/AMYR2000 excluding accounting, audit and tax complianceMin USD1850 excluding accounting, audit and tax compliance