Formation of Company

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Introducing the business benefits through Labuan.

  • Formation of Company in Labuan versus British Virgin Island
  • Formation of Company in Labuan versus Cayman Island
  • Formation of Company in Labuan versus Hong Kong
  • Formation of Company in Labuan versus Seychelles
  • Formation of Company in Labuan versus Singapore

Formation of Company in Labuan versus British Virgin Island

Labuan British Virgin Islands
EU Member No No
Currency Preferred Any foreign currency except Ringgit Malaysia (MYR) US Dollar (US$)
Corporate Tax Rate 3% on the audited profit OR RM20,000 flat on annual election basis 0%
Capital Gain Tax 0% 0%
VAT Standard Rate No SST No VAT
VAT Reduced Rate No SST No VAT
Tax Return Requirement Annual Filing required based on taxation scheme selected No – BVI does not levy corporation tax
Tax Return Filing Due Date End March of the following year Not Required
Tax Residency Requirements Malaysia Management and Control to be exercised in BVI
Tax rate on dividends from foreign investments 0% 0%
Withholding tax on dividend payments to foreign shareholders Not applicable 0%
Tax rate on interest income 0% 0%
Withholding tax on interest payments to foreign recipients Not applicable 0%
Tax rate on royalty income 0% 0%
Stamp duty No Yes

Formation of Company in Labuan versus Cayman Island

Labuan Cayman Islands
EU Member No No
Currency Preferred Any foreign currency except Ringgit Malaysia (MYR) Cayman Island Dollar (CI$)
Corporate Tax Rate 3% on the audited profit OR RM20,000 flat on annual election basis 0%
Capital Gain Tax 0% 0%
VAT Standard Rate No SST No VAT
VAT Reduced Rate No SST No VAT
Tax Return Requirement Annual Filing required based on taxation scheme selected Not applicable
Tax Return Filing Due Date End March of the following year Not Required
Tax Residency Requirements Malaysia No
Tax rate on dividends from foreign investments 0% Not Applicable
Withholding tax on dividend payments to foreign shareholders Not applicable 0%
Tax rate on interest income 0% 0%
Withholding tax on interest payments to foreign recipients Not applicable 0%
Tax rate on royalty income 0% 0%
Stamp duty No 0%

Formation of Company in Labuan versus Hong Kong

Labuan Hong Kong
EU Member No No
Currency Preferred Any foreign currency except Ringgit Malaysia (MYR) Hong Kong Dollar (HKD or HK$)
Corporate Tax Rate 3% on the audited profit OR RM20,000 flat on annual election basis 16.5%
Capital Gain Tax 0% 0%
VAT Standard Rate No SST No VAT
VAT Reduced Rate No SST No VAT
Tax Return Requirement Annual Filing required based on taxation scheme selected Yes
Tax Return Filing Due Date End March of the following year End April of the following year
Tax Residency Requirements Malaysia Management and Control to be exercised in BVI
Tax rate on dividends from foreign investments 0% 0%
Withholding tax on dividend payments to foreign shareholders Not applicable 0%
Tax rate on interest income 0% 16.5% except from deposits in financial institutions in Hong Kong (0%)
Withholding tax on interest payments to foreign recipients Not applicable 0%
Tax rate on royalty income 0% 16.5% but reduced rates may apply for certain business class
Stamp duty No Yes

Formation of Company in Labuan versus Seychelles

Labuan Seychelles
EU Member No No
Currency Preferred Any foreign currency except Ringgit Malaysia (MYR) Seychelles Rupee (SCR)
Corporate Tax Rate 3% on the audited profit OR RM20,000 flat on annual election basis IBC – 0%
CSLs – 1.5%
Other companies (business tax) – 25% on first SCR1,000,000 and 30% on remaining amount for the exception of several exempted financial institutions, telecom companies, alcohol producers and etc – 33%
Capital Gain Tax 0% 0%
VAT Standard Rate No SST 15%
VAT Reduced Rate No SST 0%
Tax Return Requirement Annual Filing required based on taxation scheme selected Yes
Tax Return Filing Due Date End March of the following year End March of the following year
Tax Residency Requirements Malaysia Management and Control to be exercised in Seychelles or voting power to be exercised by shareholders resident in Seychelles
Tax rate on dividends from foreign investments 0% IBCs – 0%
Withholding tax on dividend payments to foreign shareholders Not applicable CSLs – 1.5%
Tax rate on interest income 0% Other companies (business tax) – 25% on first SCR1,000,000 and 30% on remaining amount for the exception of several exempted financial institutions, telecom companies, alcohol producers and etc – 33%
Withholding tax on interest payments to foreign recipients Not applicable 15% (0% for IBCs and CSLs)
Tax rate on royalty income 0% 10% (0% for IBCs and CSLs)
Stamp duty No 0%

Formation of Company in Labuan versus Singapore

Labuan Singapore
EU Member No No
Currency Preferred Any foreign currency except Ringgit Malaysia (MYR) Singapore Dollar (SGD)
Corporate Tax Rate 3% on the audited profit OR RM20,000 flat on annual election basis 17% based on 75% on the first SGD10,000 and 75% of the next SGD290,000 exempted
Capital Gain Tax 0% 0%
VAT Standard Rate 7% 0%
VAT Reduced Rate No SST 0%
Tax Return Requirement Annual Filing required based on taxation scheme selected Yes
Tax Return Filing Due Date End March of the following year End November of the following year
Tax Residency Requirements Malaysia Management and Control to be exercised in Singapore
Tax rate on dividends from foreign investments 0% 0% if the foreign tax burden is at least 15% and the tax has been paid./td>
Withholding tax on dividend payments to foreign shareholders Not applicable 0%
Tax rate on interest income 0% 17%
Withholding tax on interest payments to foreign recipients Not applicable 0%
Tax rate on royalty income 0% 15%
Stamp duty No 0%