LOFSA - THE LABUAN OFFSHORE COMPANY

A Labuan offshore company shall only carry on business in, from or through Labuan. An offshore company may not carry on business with a resident of Malaysia except as permitted by the Offshore Banking Act 1990 and may not carry on the business of banking or insurance. A Labuan offshore company has the following characteristics

TAXATION

An offshore company may elect to pay either 3% tax on audited net profits or pay a flat rate of RM20,000 per annum which would negate the requirement to appoint an auditor and file audited financial statements.

SHAREHOLDERS

The minimum number of shareholders required is one. Details of shareholders are not available for inspection by the public. No resident of Malaysia, other than a trust company or a domestic or foreign company granted a licence may hold shares in an offshore company.

DIRECTORS

A minimum of one director, either corporate or individual is required. Directors do not have to reside in Labuan. Details do not appear on the public file.

SECRETARY

An offshore company must have at least one resident secretary who must be an officer of a licensed Labuan trust company. Additional secretaries who are not resident in Labuan may be appointed.

ANNUAL REPORTING

An annual return must be lodged annually, not later than 30 days before the anniversary of the date of the company’s incorporation. As dealt with above a Labuan offshore company can dispense with the requirement to file annual audited accounts so long as the members of the company resolve at a general meeting not to appoint an auditor. In this case an offshore company can elect to pay a flat rate of tax of RM20,000 per annum or the same amount as an annual registration fee. If, however, the offshore company intends to take advantage of the 3% tax on audited net profits then accounts must be audited by an approved auditor and filed.

RESTRICTIONS ON NAME AND ACTIVITY

Offshore companies are allowed to have names in a foreign language, provided they use Roman characters and the letter L as part of its name.