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Labuan company registration means incorporating a company under the Labuan Companies Act 1990 in the register kept by the Labuan Financial Services Authority (Labuan FSA), the regulator of the Labuan International Business and Financial Centre (Labuan IBFC) in the Federal Territory of Labuan. Founders do not file with Labuan FSA themselves. The regulator requires every incorporation to be handled by a licensed Labuan trust company acting as incorporation agent, which carries out its own due diligence on the client and files through COR@L, Labuan FSA’s online registry system. Labuan company formation, Labuan incorporation and the older label, Labuan offshore company, all describe this one procedure; until 2010 the Act’s amending Acts were still titled Offshore Companies (Amendment) Acts.
Labuan belongs to Malaysia but has its own company statute and its own tax statute. A Labuan company suits international holding, regional services and licensed financial business run with staff in Labuan. A business that will mainly sell to customers in Malaysia usually fits better in an onshore company under the Companies Act 2016, explained on our company formation in Malaysia page, for the reasons set out below.
| Structure | What the law says | Typical use |
|---|---|---|
| Company limited by shares | One shareholder and one share are enough; no minimum capital; bearer shares prohibited | Holding, services and licensed financial business |
| Company limited by guarantee, or unlimited company | Both permitted by section 14(3) | Rare in commercial use |
| Protected cell company | Allowed only for insurance, captive insurance, takaful and mutual fund business, on the terms of Labuan FSA’s written approval (sections 130O and 130P) | Captives and funds that need segregated cells |
| Foreign Labuan company | A company from abroad registered in Labuan, with a trust company as its agent | A Labuan presence for an existing group company |
Foundations, limited partnerships, limited liability partnerships and trusts exist under separate Labuan statutes and are taxed under the same tax Act. The rest of this page deals with the company limited by shares.
| Requirement | Rule | Basis |
|---|---|---|
| Shareholders | At least one: an individual, a corporation, or a trust company holding the shares as nominee or on trust | Labuan FSA |
| Directors | One or more, at least one of them a resident director; a corporate director may sit on the board in addition | Section 87(1), as amended in 2022 |
| Resident director | A trust officer made available by a Labuan trust company, or a natural person aged 18 or over who meets Labuan FSA’s criteria; any nationality except Israeli and North Korean, and the person may live anywhere in the world | Section 87(2); Labuan FSA clarification note of 4 September 2023 |
| Resident secretary | Must be a trust officer of a Labuan trust company, or a company wholly owned by that trust company and approved by Labuan FSA | Section 93(2) |
| Registered office | In Labuan, at the principal office of a Labuan trust company or another office Labuan FSA approves | Section 85(1) |
| Share capital | No minimum; one share; share classes and fractional shares allowed | Labuan FSA; section 47 |
| Currency of shares | Any currency, ringgit included, since the 2025 amendment | Section 47(1)(a), Act A1756 |
| Bearer shares | Prohibited; any issue or conversion is void | Section 46A |
| Accounting records | Kept at the registered office or elsewhere in Labuan, entries made within 90 days of each transaction | Section 110 |
Some Labuan FSA web pages still say shares may not be denominated in ringgit. That was the rule until Parliament amended section 47 in 2025; the statute now reads “any currency”.
| Step | What happens |
|---|---|
| 1. Appoint a Labuan trust company | It becomes the incorporation agent, identifies the founders and beneficial owners under its anti-money laundering procedures and prepares the filing |
| 2. Reserve the name | Any name Labuan FSA accepts; words from any national language need a certified English rendition; the Registrar decides within 24 hours and holds the name for three months |
| 3. Licence first, where needed | Banking, insurance, fund management, company management, payment systems, leasing and other financial business need Labuan FSA’s approval before the company is incorporated |
| 4. Lodge the documents | Memorandum and articles, the trust company’s statutory declaration of compliance, each director’s written consent to act and an individual form for each director |
| 5. Review by Labuan FSA | Labuan FSA states a company can be approved within 24 hours of complete documents, payment and clearance of its own due diligence; its client charter lists one working day |
| 6. Certificate of incorporation | The company is a body corporate from the date shown in the certificate (section 15) |
| 7. First returns | Notice of the registered office and a return of directors and secretaries within one month; a register of beneficial owners opened at the registered office |
Licence applications run on their own clock: Labuan FSA’s client charter gives 30 working days for most licence types, or 15 on its fast track. The identity and address documents asked of founders are set by the trust company’s due diligence; the Labuan FSA pages we read publish no single list.
The Labuan Business Activity Tax Act 1990 (LBATA) sorts every Labuan business activity into two kinds. A Labuan trading activity includes banking, insurance, trading, management, licensing and anything else that is not non-trading; it pays 3% of chargeable profits, which section 4 defines as the net profits shown in the audited accounts. A Labuan non-trading activity is, in the Act’s words, the holding of investments in “securities, stock, shares, loans, deposits or any other properties situated in Labuan” on the entity’s own behalf; that profit is not charged to tax, though a return is still filed every year (sections 9 and 10). A company that does both is treated as trading.
Three rules narrow this. Royalties and other intellectual property income are taken out of Labuan profits and taxed under the Income Tax Act 1967. A company may instead elect, irrevocably, to be taxed under the Income Tax Act, filing the election within three months after its basis period begins (section 3A). Most importantly, both the 3% rate and the exemption depend on substance in Labuan in each basis period: a company that misses the requirements pays 24% on its chargeable profits for that year (section 2B(1A)), the same figure as Malaysia’s standard corporate rate.
The minimums come from the Labuan Business Activity Tax (Requirements for Labuan Business Activity) Regulations 2021, P.U.(A) 423/2021, and apply to every basis period:
| Activity | Full-time employees in Labuan | Annual operating expenditure in Labuan |
|---|---|---|
| Administrative, accounting, legal, backroom processing, payroll, talent management, agency, insolvency-related or other management services | 2 | RM50,000 |
| Labuan company management, fund manager, securities licensee, fund administrator, money broker, factoring or credit token company | 2 | RM100,000 |
| Labuan trust company | 3 | RM120,000 |
| Labuan bank, investment bank or insurer | 3 | RM200,000 |
| Investment holding other than pure equity holding | 1 | RM20,000 |
| Pure equity holding | Exempt from the employee minimum | RM20,000 |
A pure equity holding company must also show control and management in Labuan: at least one board meeting a year held in Labuan, its registered office and secretary in Labuan, and its accounting records and board minutes kept there. Amending regulations of 2025 (P.U.(A) 325/2025) added a fit and proper test for staff. The Inland Revenue Board’s guideline of 5 November 2025 explains it: the employee needs a contract of service with the Labuan company itself, does office work such as director, manager, secretary or clerk, and works physically in Labuan throughout the basis period, while staff supplied through an outsourcing agency do not count. Expatriates apply for work permits under Labuan FSA’s work permit guidelines; in June 2026 Labuan FSA confirmed that the RM10,000 salary threshold set for Labuan IBFC still qualifies for an Employment Pass.
The schedules list licensed financial businesses and the service activities above. A business plan that fits none of them, such as general trading in goods, needs its tax treatment confirmed before incorporation; commodity trading has a status of its own, the Labuan international commodity trading company, under separate regulations.
Section 7(2) of the Labuan Companies Act lets a Labuan company do business with Malaysian residents, and the 2022 amendment deleted both the old ban on business in ringgit and the duty to report transactions with residents, backdated to 1 January 2019. Three points still weigh on a Labuan company whose customers are in Malaysia:
For a business selling mainly inside Malaysia, the onshore company described in our Malaysia company guide is usually the cleaner fit. Labuan works best where the customers, investments or group companies are outside Malaysia.
Since Labuan FSA can approve a complete application within 24 hours of clearing its due diligence, speed is a weak reason to buy. Labuan FSA itself recognises the alternative: the Labuan pre-incorporated company, a normal Labuan company incorporated in advance and held by a trust company until an investor takes it over. It makes sense when an earlier incorporation date matters to a counterparty, a bank or a tender. The share transfer and what the buyer inherits are covered on Labuan shelf companies, and the idea in general in our guide to off-the-shelf companies.
What we do for a Labuan registration: we can incorporate a new Labuan company or supply a ready-made one, prepare the incorporation or transfer documents and the filings for Labuan FSA, and help prepare the bank application; where we have a working contact at a suitable bank, we can make an introduction, and the bank alone decides. If you have no one to act as resident director, we can arrange the resident director and the resident secretary, who by law must be a trust officer of a licensed Labuan trust company, and, if you want one, a trust company holding the shares as nominee; a resident director owes the duties the Act places on every director, and the real owners are still entered in the company’s register of beneficial owners, with each change lodged with Labuan FSA within 30 days. Opening an account is covered on bank accounts for Labuan companies, and the jurisdiction as a whole in our Labuan company guide.
Appoint a licensed Labuan trust company as incorporation agent, reserve the name with Labuan FSA, obtain any licence your activity needs, then lodge the memorandum and articles, the trust company’s statutory declaration of compliance and each director’s consent and form. Labuan FSA completes its own due diligence and issues the certificate of incorporation. Founders cannot apply directly: every Labuan incorporation reaches Labuan FSA through a trust company.
Register a company limited by shares in the usual way, but settle the holding activity first, because it decides the substance test. Investment holding other than pure equity holding needs one full-time employee and RM20,000 of annual spending in Labuan. Pure equity holding is exempt from the employee minimum but needs RM20,000 of spending, a yearly board meeting in Labuan and its records and minutes kept there.
Yes. Neither the Labuan Companies Act nor Labuan FSA restricts the nationality of shareholders, and a single shareholder is enough. The resident director may be a foreign national of any country except Israel and North Korea and may live anywhere. What a foreign owner cannot avoid is a resident secretary from a Labuan trust company and a registered office in Labuan.
No. Labuan FSA asks for one share and sets no minimum capital for an ordinary company, and since the 2025 amendment to section 47 the shares may be expressed in any currency, ringgit included. Licensed businesses are different: a Labuan trust company, for example, must keep the capital or working funds its licensing guidelines set, and each licence type carries conditions Labuan FSA checks before granting it.
Labuan FSA states that a company can be approved for incorporation within 24 hours once complete documents and payment are lodged and its due diligence is cleared, and its client charter lists one working day. Name reservation is decided within 24 hours. The time before filing depends on the trust company’s checks on the founders, and a licensed activity adds Labuan FSA’s licensing review.
Yes. Section 7(2) allows business with residents, and the ringgit ban and the duty to report transactions with residents were removed in 2022 with effect from 2019. But Labuan entities count as non-residents for exchange control, and a Malaysian payer cannot deduct 97% of most payments made to a Labuan company. A business aimed at Malaysian customers usually suits an onshore company better.
Planning a Labuan holding or service company? Tell us the activity, the shareholders and where the staff will sit, and we will set out the substance test that applies and what a Labuan registration would need. Telegram and WhatsApp: +48 663 247 166.