Flat rate
3.0%
Duration
—
Prior non-residency
—
required before applying
Standard top income tax
30.0%
Malaysia, without the regime
Overview
- Regime
- Labuan International Business and Financial Centre
- Country
- Malaysia
- Type
- Flat rate
- Status
- Active
- Effective from
- Jan 1, 1990
- Expires on
- —
Details
- Summary
- Labuan entities can elect to be taxed at 3% of net audited profits for trading activities, or 0% for non-trading (holding/investment) activities.
- Eligibility
- Companies incorporated or registered under the Labuan Companies Act 1990
- Benefits
- 3% tax on net profits for trading activities (effectively much lower than 24% standard CIT). 0% on non-trading income. No withholding tax on distributions.
- Requirements
- Must have adequate substance in Labuan: minimum operating expenditure of MYR 50,000/year and minimum 2 full-time employees in Labuan.
- Limitations
- Labuan entities that do not meet substance requirements will be taxed at standard 24% rate. Restricted from certain domestic transactions.
- Income types covered
- Labuan trading and non-trading income
- Duration details
- Ongoing while conditions met
View source Labuan IBFC