First the market.
Then the company.

01

Onshore and Labuan are not interchangeable

Sdn. Bhd. suitable for full operations in the Malaysian domestic market, local customers, employees and licenses. Labuan company is focused on business carried on in, from or through Labuan, cross-border holding, trading and international financial solutions. Choosing only the low rate creates tax and banking risk.

02

Malaysian Sdn. Bhd.

Shareholder

One or more; foreign ownership is checked by activity

Director

At least one ordinarily resident in Malaysia

Office

Registered office in Malaysia

Secretary

Qualified company secretary on time

Filing

Name approval and incorporation via SSM/MyCoID

Industry restrictions, distributive trade, manufacturing, professional, employment and sector approvals are checked before registration: the incorporation certificate is not a universal business license.

03

Labuan company is created through a licensed trust company

Trust company conducts CDD, reserves name and submits memorandum and articles, consents of directors, declarations and information about owners. With a full set, fees and due diligence passed, Labuan FSA indicates an approval target of 24 hours; licensed business requires prior approval.

Agent/secretary

Licensed Labuan trust company

Legal framework

Labuan Companies Act 1990

Shares

Different classes are allowed; bearer shares are prohibited

Capital

There is usually no general statutory minimum, but a license may require capital

Office

Registered office through trust company; substance is assessed separately

04

KYC file is prepared before corporate forms

05

Activity wording does not replace regulatory approval

Banking, investment banking, insurance, captive, fund management, securities, leasing, money broking, company management, credit token and digital financial services may require a Labuan FSA license or approval. On the mainland, BNM, Securities Commission, MIDA, local authority and industry bodies are separately audited.

06

Substance is designed for a specific activity

To apply the Labuan tax regime, the physical office, a sufficient number of full-time employees in Labuan, and the minimum annual operating expenditure for the applicable category are assessed. Outsourcing is only permissible within the rules and should not turn the entity into an empty shell without control and functions.

07

After registration, the operating cycle begins

The company opens a tax and banking file, issues shares, approves signatories, maintains accounting records, contracts and corporate registers, submits annual returns and tax returns, supports beneficial ownership and renewal. Labuan entity separately confirms activity, audit and substance.

08

Institution route

1. 01

   Define markets, customers, functions, currencies and licenses.

2. 02

   Compare Sdn. Bhd., Labuan company and foreign branch.

3. 03

   Collect UBO, source of wealth/funds and business evidence.

4. 04

   Design board, substance, tax and banking.

5. 05

   Submit documents and launch the compliance calendar.