Labuan Company Registration Explained In 2 Minutes

This post is intended as a quick and comprehensive look at the typical Labuan Company registration process under the Labuan Financial Services Authorities (LFSA). 

There are a total of ten steps, and without further ado, let’s start at the beginning.

Step 1. Select type of structure

Determine the entity from the following table that best applies to your intended business activities.

Business Structure	Short Definition
Company	This structure is ideal for larger businesses. It offers limited liability, which distinguishes the business’s activities from those of the owners.
Partnership	Commonly used by small-scale businesses, involving two or more individuals who agree to share a single business’s profits and responsibilities.
Foundation	Primarily for philanthropic purposes, but can also serve as a unique type of business entity, holding assets and conducting business for the benefit of members.

Permitted business activities

For your information, these activites can take place in conventional, digital, and Syariah formats.

• banking
• money brokering
• wealth management
• commodity trading
• (re)insurance and insurance-related activities
• credit token and leasing
• capital markets
• investment holding

Step 2. Hire Labuan business service providers

As these services are tightly regulated by the Labuan Financial Services Authority, only engage those who are on LFSA official lists and have a registration number.

We’ve linked each of the services to the corresponding LFSA list below.

1. Labuan Underwriting Manager: They evaluate risks for insurance companies to fix premiums. 
2. Labuan Insurance Manager: They direct and oversee an insurer’s activities to ensure compliance. 
3. Labuan Trust Company : They companies provide financial services related to trusts.
4. Auditor: They examine financial statements to ensure accuracy and compliance with regulations.

Step 3. Appoint a Labuan Company Secretary

The Company Secretary comes from the Labuan Trust Company you engage and will help you incorporate your new Labuan company.

All incorporations must be done through a Labuan Trust Company, who will conduct due diligence as well as advise you on any necessary business licenses.

Step 4. Reserve a company name

If all is well, it costs USD 15 (RM50) to reserve a name and approval usually comes within 24 hours, after which the name will be held for you for three months.

Your Company Secretary will be able to better advise you once they know your business specifics, but you’re technically free to apply with any name, bearing in mind LFSA has final say.

Step 5. Labuan company registration

This is handled by your Labuan Trust Company and incurs a registration and annual fee payable to Labuan authorities.

Important note: These do not include Trust Company service charges, which vary greatly across providers.

Registration fee

Local companies are charged based on paid up capital while foreign companies are charged a flat rate

Paid-Up Capital	Amount (RM)	Amount (USD)
RM 50,000 and below	RM1,000	USD300
RM 50,001 – RM 1 million	RM2,000	USD600
>RM 1 million	RM5,000	USD1,500
Foreign company (any paid up capital level)	RM6,000	USD2,000

Annual fee

Both local and foreign Labuan companies are charged a flat annual fee.

Category	Amount (RM)	Amount (USD)
Labuan company	RM2,600	USD800
Foreign Labuan company	RM5,300	USD1,500

Once the paperwork gets a thumbs up from LFSA after their due diligence, your Labuan company can officially be incorporated.

Step 6. Visa application for foreign business owners

The Employment Pass requires joint approval from the Labuan Authorities and Immigration Department and usually takes anywhere from 45 to 60 days, with a processing fee of USD 350.

We won’t get into the many benefits of holding a Labuan Employment Pass, but rest assured they are significant!

To learn more, check out our FAQs on Labuan Offshore Companies.

Step 7. Open a corporate bank account

Different banks will have different Know Your Customer procedures and while your physical presence is not necessary, it usually means a longer due dilligence process. Expect it to take up to four weeks to open your coprate bank account.

Step 8. Business readiness compliance

Again, your Company Secretary and Labuan Trust Company will guide you, but compliance for a Labuan Company boils down to two things:

Economic substance

In Labuan, there are specific economic substance requirements for companies:

• physical office in Labuan
• certain number of full-time employees based in Labuan
• minimum operating expenditure in Labuan

Statutory agencies

These government bodies oversee various aspects of conducting business in Malaysia and have specific requirements companies must follow. Here are just a couple of the most common ones.

• Inland Revenue Board of Malaysia (IRBM): The federal authority overseeing taxation in Malaysia.
• Malaysia Employees Provident Fund (EPF): The national management for private sector employee retirement funds.

Depending on the nature of your business, you may need to comply with industry-specific agencies.

Step 9. Begin operations

Nothing much to say here other than congratulations!

Six months later, and it’s time for your kingdom to pay tax.

Step 10. Statutory reporting and tax obligations

For normal companies, audited financial statements must be submitted to LFSA within 9 months from the financial year end, and annual tax returns must be filed with LHDN by 31 March or at any extended period allowed by IRBM for each year of assessment.

We hope this short guide to Labuan Company registration was useful!

Let MISHU handle your Labuan Company registration

MISHU is experienced in helping locals and foreigners incorporate a Labuan company. Talk to us and let us understand your needs, including specific business licenses and employment passes today.