Labuan IBC — Malaysia's 3% international company, managed from KL
Labuan is Malaysia's international business and financial centre. A Labuan trading company pays 3% corporate tax while substance requirements are met; a pure equity holding company pays 0%. 100% foreign ownership, multi-currency banking (USD/SGD/JPY), and dividends free of withholding tax.
The two types of Labuan company
| Trading company — 3% | Holding / asset company — 0% | |
|---|---|---|
| Typical activity | Trade, services, consulting, royalties | Receiving dividends and capital gains only |
| Corporate tax | 3% of net audited profits | 0% |
| Staff in Labuan | 2+ full-time employees, directly employed, working in Labuan | Not required |
| Minimum annual OPEX | RM 50,000+ (industry-specific, up to RM 200K) | RM 20,000 |
| Physical office | Required (virtual office not accepted) | Registered office may suffice |
| If requirements are missed | Standard 24% applies | |
Temporary staffing or subcontractors do not count toward the employee requirement — direct employment contracts are mandatory (EPF/SOCSO enrolment). Sources: Labuan FSA, Hasil substance guidelines (2025).
Our fixed-yen pricing (2026-07-20 edition)
| Item | Fee (JPY, fixed) | Notes |
|---|---|---|
| Company setup — full package | ¥1,200,000 | Registration, FSA fees, first-year secretary & registered address, tax filing, bank account support — all included |
| Annual maintenance | ¥850,000/year | From year 2. FSA renewal, secretary, registered address, annual tax filing, e-filing. No FX surcharges |
| Work visa (2-year Labuan Work Pass) | 1st person ¥800,000 / 2nd ¥450,000 | Dependants ¥250,000/person; renewal pack every 2 years ¥400,000/person (dependant renewal ¥150,000) |
| Substance plans (monthly) | ¥40,000 – ¥160,000/month | Plans A–F: office, payroll, employment admin, tax agency — pick the level of hands-off you want |
| Residence subscription (monthly) | ¥70,000 – ¥160,000/month | Private room / double room / whole house in Labuan — usable as your registered residence |
| Additional bank account support | ¥150,000/account | RHB / Maybank / HSBC Labuan, CIMB Singapore and others |
All Bangga fees are fixed in Japanese yen (all-inclusive display). Out-of-pocket costs (audit fees, extraordinary regulator charges) are quoted in advance and billed at cost.
What people use Labuan companies for
- International holding — receiving dividends and capital gains at 0%, under Malaysia's treaty network.
- Online business / SaaS — multi-currency, cross-border client base.
- Investment and trading vehicles — capital gains not taxed (licensed activities require a Labuan FSA licence).
- Consulting and IP management — royalty and advisory income with treaty protection.
FAQ
Do I have to live in Labuan?
No residence obligation. But to keep the 3% rate, a trading company needs 2+ full-time staff physically working in Labuan and RM 50,000+ annual OPEX. Our substance plans and residence subscription exist precisely to make this practical.
How long until the company is running?
Setup 2–4 weeks, bank account 2–4 weeks — often about 1.5 months in parallel.
Can I get a work visa through a Labuan company?
Yes — the 2-year Labuan Work Pass (renewable), with Dependent Passes for family. A physical office in Labuan is required for the visa regardless of the tax election.
What about Japanese taxes?
If you remain a Japan tax resident, CFC rules may attribute the company's profits to you (see the notice above). We arrange a session with partner international-tax accountants before any commitment.
Start with a free 30-minute consultation
Tell us about your plans for your Labuan IBC. English and Japanese support, from our Kuala Lumpur office.