TAXES
Six key due diligence questions for your startup in Malaysia
What is the right type of entity for my business?
What is the difference between local malaysian company and labuan international company?
What is the suitable structure I should have?
How fast is the incorporation of my company complete with work visa?
Do I need any trade licenses?
How can I minimize tax to maximize my profit?
THE LABUAN BUSINESS ACTIVITIES TAX ACT 1990 SETS OUT THE TAX TREATMENT OF LABUAN ENTITIES. THE ACT DIVIDES LABUAN COMPANIES INTO TWO CATEGORIES:
1
Pure non-trading or investment holding Labuan companies are not liable to tax
2
Other Labuan companies are eligible for an annual rate of 3% of the company's audited net profit subject to substance requirement.
Malaysia has entered into more than 60 effective Double Taxation Agreements as at 2008. Most tax treaty partners recognize Labuan companies as Malaysia taxpayers and would apply the provisions of the DTA on Labuan companies.