One of the main reasons why foreign investors are keen to incorporate a Labuan Offshore Company is due to the tax exemptions they can enjoy:

  1. No indirect tax – Labuan offshore companies enjoy free-port status. Hence, indirect taxes such as services and sales taxes are not applicable to Labuan entities located in Labuan
  2. Stamp dutyStamp duty is exempted from all instruments executed by Labuan entity in connection with its business
  3. Exchange control – The entity is also not subject to exchange control restrictions
  4. Payments made by Labuan entities – The following exemptions are available to recipients of income from Labuan entities:
  • Dividends received by Labuan Company
  • Dividends received from Labuan Company which are paid, credited or distributed out of income derived from Labuan business activity
  • Distributions received from Labuan trust by beneficiaries
  • Interest received from Labuan Company by a resident person
  1. Withholding tax – The following payments made by Labuan entities to non-residents are exempted and not subject to withholding provisions:
  • Royalties
  • Interest
  • Technical services, advice or assistance
  • Other income