Labuan: Types of Company
New laws which, it is hoped, will substantially improve Labuan’s competitive edge in international financial markets came into effect in February 2010. The new laws allow for the creation of Labuan foundations, limited liability partnerships, protected cell companies (insurance and mutual funds), shipping operations, Labuan special trusts and financial planning activities. These complement the existing available range of products and services and aim to provide investors with a wider choice of financial products to maximise investment opportunities.
Labuan is part of Malaysia, and Malaysian company law applies there. Most foreign companies wanting offshore status in Labuan will use Offshore Company or Limited Partnership status (see below). These offshore forms are subject to Malaysian Company law except as described below. Regular Malaysian companies can be used in Labuan, but will not receive the tax and other privileges accorded to Offshore Companies.
Generally, companies incorporated in Malaysia are regulated by the Malaysian Companies Act, 1965. The types of companies are:
- a company limited by shares, which can be private or public;
- branch of a foreign company;
- partnership or sole proprietorship.
Foreign investors normally conduct their businesses in Malaysia in the form of a private company limited by shares.
Incorporation of a company requires an application to be made to the Registrar of Companies to approve the proposed name by submitting the following forms:
- Memorandum and Articles of Association
- Statutory declaration of compliance with the Companies Act
- Certificate of identity
- Consent to act as director
- Statutory declaration by persons before appointments as directors
Companies pay registration fees based on the amount of authorized capital, and both filing and stamping fees apply for submission of the above documents.
A company must have a minimum of two directors and one secretary, having their principal or only place of residence in Malaysia. A register of directors is kept at the registered office of the company and is available for public inspection.
Audited profit and loss accounts and annual returns are required.
Partnerships and sole proprietorships must register with the Registration of Businesses before they can begin to operate. There is a registration fee and an annual renewal fee.