Labuan Entity can enjoy the following benefits:-

  Legislation Type of Income Tax Payable
1.1 Labuan Business Activity Tax Act 1990 (“LBATA”) Non-trading activities (Interest | investment returns including capital gains | dividends | royalty) Dividend payments | Trust distributions Sec 9 of LBATA
No Tax


Labuan trading activities Sec 4 and 7 of LBATA Corporate tax rate of 3% of audited net profits
1.2 Under Income Tax Act 1967 (“ITA”) Payments to non-residents for interest | royalties | technical and management fees | rental payments for the use of movable property No withholding tax


Gross employment income of a non-citizen working in a managerial capacity in a Labuan financial institution until the year of assessment 2020 50% tax exemption


Housing allowance and Labuan Territory allowances received by the individual from exercising an employment in Labuan with Labuan entities until the year of assessment 2020 50% tax exemption


Director fees received by a non-citizen director of a Labuan financial institution, until the year of assessment 2020 100% exemption


Statutory income from Qualifying Professional Services provided by services providers (Accountants, Lawyers, Secretarial, Liquidators and Auditors) to Labuan entities 65% of the statutory income


Capital gains | foreign source income Pay no tax
1.3 Other Tax Benefits No Stamp duty No indirect taxes such as (i.e. Sales Tax | Service Tax | GST | VAT | Custom Duty) > No tax estimation i.e. no CP204 | no CP205