Frequently Asked Questions

Labuan boasts a highly competitive tax ecosystem. Companies carrying out qualifying **Labuan trading activities** (e.g. trading, fintech, advisory, money broking) are taxed at **3% of net audited profits**. Qualifying **non-trading holding activities** are taxed at **0% (Zero corporate tax)**. Non-qualifying activities are subject to the standard Malaysian tax framework.

To enjoy Labuan's favorable 3% or 0% tax structures, companies must fulfill **Substance Requirements** in Labuan. This includes having a physical office space within Labuan, employing full-time local staff (usually 1-2 depending on activity type), and incurring a minimum annual operating expenditure inside Malaysia (e.g. MYR 50,000 to MYR 100,000).

Yes! Establishing a Labuan Trading Company qualifies you and your core professional executives to apply for a **2-year renewable Labuan Employment Pass (Work Visa)**. This visa allows foreign directors and staff to reside in West Malaysia (Kuala Lumpur) or Labuan, and provides dependent passes for spouses and families.

For **Labuan Trading Companies**, filing audited financial statements verified by an approved Labuan auditor is a mandatory requirement to qualify for the 3% corporate tax rate. For **Labuan Non-Trading (Holding) Companies**, no annual audit is mandated; a simple annual tax filing and standard declaration are sufficient.