Labuan – A Mid-shore Jurisdiction

Labuan is an island off the coast of Sabah in East Malaysia. Labuan International Business and Financial Centre (Labuan IBFC) was established in 1990, and laid the foundation for the  development of offshore banking and insurance, trust and fund management, offshore investment holding and multinational companies and other offshore activities. It also acts as a support hub for the oil and gas industry. Labuan is strategically located in the heart of Asia Pacific, which enables the island to tap into one of the fastest growing regions in the world. This presents businesses with the perfect opportunity to connect with major economies in Asia and beyond.

Labuan IBFC offers a comprehensive mid-shore solution capable of striking the ideal balance between client confidentiality and compliance with international best standards and practices. Labuan IBFC has created a favourable business environment through a simple and attractive tax system and the modernisation of an internationally recognised legal framework. Labuan’s diverse business and investment structure helps facilitate cross-border transactions, business dealings, while meeting the needs of wealth management.


The following are several major factors attracting the international business community to Labuan IBFC: : –

  • Strategic location
  • As a whitelist jurisdiction in the Organisation for Economic Co-operation and Development (OECD)
  • Simple tax structure (3% audited net profit)
  • Modern laws, regulations and systems
  • Executed bilateral tax agreements with more than 70 countries worldwide to avoid double taxation
  • Exemption from withholding tax on payments to non-residents
  • No stamp duty (related to offshore business), no import tax / sales tax / value added tax
  • Labuan has no exchange control
  • Foreign professionals and management personnel employed by Labuan can enjoy 50% Malaysian personal income tax exemption
  • 100% Malaysian Individual Tax Exemption for Directors’ Fees of Labuan Non-Citizen Directors


The following are list of Labuan Businesses and Licenses that are offer by Labuan IBFC: –

  • Banking
  • Insurance
  • Leasing
  • Commodity trade
  • Shipping
  • Credit leasing companies
  • Wealth Management (Foundation, Trust)
  • Capital Market (public fund, private fund, fund management company, Securities license holder)
  • Factoring
  • Money Broking
  • Company Management
  • Ship Registration


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