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Offshore Company Registration in Malaysia

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Offshore Jurisdictions in Malaysia

Located off the coast of East Malaysia, Labuan is governed by its own specialized commercial and tax framework under the Labuan Financial Services Authority (LFSA). It is the only dedicated offshore hub in Malaysia, offering an internationally recognized environment for global trade, investment holding, and wealth management.

A Labuan company operates outside the domestic Malaysian market to maintain its tax-advantaged status. This structure allows businesses to bypass standard onshore restrictions while accessing a simplified compliance regime and a preferential corporate tax framework.

Read Our OFFSHORE COMPANY REGISTRATION guide

Benefits of a Malaysian Offshore Company

Regulated by the Labuan Companies Act 1990, a Labuan company offers a secure foundation to grow your business globally while protecting your personal and international assets. It provides the flexibility to scale your operations, attract international investors, and hire global talent without the heavy financial requirements or local partnership rules on onshore jurisdictions.

Preferential Tax Regime

Holding companies in Labuan enjoy 0% tax.

Trading entities may elect to be taxed at:

  • 3% on audited net profits, or
  • a fixed MYR 20,000 annual tax
    (depending on business activity and structure)

No withholding taxes on dividends, interest, or royalties paid to non-residents.

International Credibility

A Labuan company can conduct business in Mainland Malaysia.

However, any income derived from Malaysian mainland may be subject to standard tax rate of 24%.

You might also need additional licenses depending on the business activity.

Flexible Dissolution

Ownership of a Labuan company is easily transferable through the sale or transfer of shares.

This makes it an ideal vehicle for venture capital or time-bound projects.

Flexible Visas

Get a 2-year multiple entry business visa for your family and children (below 21).

This visa allows entry in Labuan and West Malaysia and is renewable.

Key Requirements to Establish an Offshore Company in Malaysia

Here’s a general overview of the requirements to set up an Offshore company in Malaysia:

1. Business Name Registration

  • Must be a unique trade name vetted against Labuan FSA standards to ensure it is not identical to existing entities
  • Can be in Malay, English, or a combination
  • Must follow proper grammar rules and must not be offensive or blasphemous

2. One Shareholder & One Director

  • Shareholders can be both individual or corporate
  • Director of any nationality (no local residency requirements)
  • Must be at least 18 years old
  • Cannot be bankrupt or convicted of prescribed offenses

3. Capital Requirements

  • Start with a minimum paid-up capital of just 1 MYR (~USD 0.21) for 100% foreign ownership
  • Denominate share capital in any major currency (USD, EUR, SGD)
  • Increase your capital at any time to qualify for institutional banking, trade finance, or specialized financial licenses (e.g., Money Broking or Credit Token licenses)

4. Company Secretary

  • Must be appointed by the board of directors within 30 days of incorporation.
  • Must be a Malaysian citizen or permanent resident.
  • Must be a member or professional body or licensed by SSM
  • No criminal records or declared as bankrupt.
  • Emerhub provides foreign companies with a company secretary

5. Commercial Address

  • An Sdn Bhd company must have a registered business address in Malaysia.
  • Any changes to the registered office address must be promptly notified to the Company Secretary, who will update the details with SSM.
  • It can be the company’s actual place of business or a virtual office address.
  • Emerhub provides virtual addresses for companies that don’t need office space.

Offshore Company Incorporation Process

The Labuan Companies Act 1990 governs the formation of these entities. Here’s how we can help you get started:

1. Pre-incorporation

Name Search & Reservation

We verify your proposed company name with the Labuan FSA and ensure your planned business activities align with Labuan’s “Substance Requirements” (local employees and annual operating expenditure).

2. Registration Submission

Key Filing & Compliance Declaration

We compile all director/shareholder KYC (Passports and Proof of Address) and draft the company’s Memorandum and Articles. Includes all mandatory filings such as Form 6 (Declaration of Compliance) and Form 24 (Consent to Act as Director). Fees are paid to the Labuan FSA, ranging from ~USD 300 to ~USD 1,500 based on your share capital threshold for incorporation.

3. Post-incorporation Essentials

Statutory Appointments & Local Setup

  • Company Secretary: Formalize the appointment of your resident secretary within 30 days.
  • Registered Office: Establish the mandatory physical address in Labuan for all official correspondence.
  • Initial Registers: Prepare the Statutory Register and Minutes of the First Board Meeting to activate the entity.

4. Business Readiness

Tax Registration & Licensing

  • Tax Registration: Corporate income tax registration with the Inland Revenue Board (LHDN).
  • Bank Account Opening: Facilitate your corporate account through our local banking network.
  • Business Licenses: Procurement of industry-specific permits (e.g., financial or trading licenses) required for operations.
  • HR Compliance: Registration with EPF, SOCSO, and EIS if you hire local employees.
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Here’s How We Can Kickstart Your Company

Emerhub streamlines the entry into the Labuan offshore market by handling the regulatory complexities on your behalf. Our local specialists manage all compliance requirements, so that you can focus on scaling your business:

1. Initial consultation

Tell us about your planned activities in Malaysia for your Offshore company and 3 of your preferred business name options

2. Provide required documents

Based on the information you have provided, Emerhub will reserve the business name and advise you on all the required documents and minimum paid-up capital for company registration.

3. Business Registration

We submit your application directly to the Labuan FSA, and secure your Certificate of Incorporation.

4. Obtain Business Licenses and Bank Account

Once registered, we move immediately to secure your bank account and any secondary permits needed to start operations.

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FAQs About Offshore Company Formation in Malaysia

1. Can foreigners register a company in Labuan?

Labuan is specifically designed for international entrepreneurs. Foreigners can own 100% of the company shares and act as the sole director without needing a local Malaysian resident.

2. Do I need to live in Malaysia to run a Labuan company?

You can manage your Labuan company from anywhere in the world. However, if you wish to relocate to Malaysia, the company can sponsor a Business visa for you and your dependents.

Emerhub advisors can help you meet the necessary citizenship requirements and stay compliant.

3. What is the difference between an Sdn Bhd and a Labuan Company?

An Sdn Bhd (private limited company) is a standard Malaysian company intended for doing business within the Malaysian domestic market. A Labuan Company is an offshore/mid-shore entity designed for international trade, consulting, and holding activities. The latter offers much lower tax rates and specific exemptions for foreign-sourced income.

4. What are the major tax benefits that I can take advantage of for my offshore company in Malaysia?

The tax framework in Labuan is designed to be highly competitive for international business operations. By meeting local substance requirements, you may qualify for the following benefits:

  • 3% tax on audited net profits for companies engaged in trading activities.
  • 0% tax on dividends, interest, and rental income for investment holding entities.
  • 0% withholding tax on dividends, interest, and royalties paid to non-residents.
  • Exemption from Sales or Service Tax (SST) on transactions within the free port of Labuan.
5. What are the “substance requirements” to qualify for incentives Labuan?

Under the Labuan Business Activity Tax Act (LBATA) 1990 and the 2021 Substance Regulations, companies must fulfill specific “Economic Substance” criteria to qualify for the 3% or 0% tax rates. Failure to meet these results in a flat 24% corporate tax rate. For standard Labuan trading companies, the requirements are:

  • Control and Management: Core income-generating activities (CIGA) must be conducted from within Labuan.
  • Full-time Employees: A minimum of two (2) full-time employees based in Labuan.
  • Annual Operating Expenditure (OPEX): A minimum of RM 50,000 spent annually within Labuan.
  • Physical Office: Maintenance of a physical office address in Labuan.
6. What documents are needed to register an offshore company in Labuan?

To comply with the anti-money laundering and “Know Your Customer” (KYC) standards enforced by the Labuan FSA, all directors and shareholders must provide verified documentation to establish their identity, professional standing, and source of funds.

Here’s what you’ll generally need:

  • Certified true copy of a valid international passport.
  • Certified true copy of a recent utility bill or bank statement (issued within the last three months) showing the applicant’s residential address.
  • Reference letter from a bank, lawyer, or accountant confirming a professional relationship of at least two years.
  • Updated Curriculum Vitae (CV) or professional profile for each director and shareholder.
  • Signed forms provided by your trust company declaring that the applicants are not undischarged bankrupts or convicted of any criminal offenses.
  • Certified copies of the Certificate of Incorporation, Memorandum and Articles of Association, and the Register of Directors and Shareholders of the parent entity (for corporate shareholders).
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