About Offshore Companies

The Offshore Companies Act 1990 (OCA) provides for the establishment of offshore companies and the registration of foreign offshore companies in Labuan. In addition, a foreign company incorporated under the laws of another country may also apply to be registered as being continued in Labuan. Every offshore company may be a company limited by shares or by guarantee. The abovementioned companies may participate in the offshore activities and enjoy the attractive tax treatment provided under the Labuan Offshore Business Activity Tax Act 1990.

It is a requirement under the OCA that an offshore company must employ the services of a trust company, which is a company incorporated or registered under the Offshore Companies Act 1990 and registered under the Labuan Trust Companies Act 1990, to carry on trust company business to the offshore companies. The trust company provides the registered office, Resident Secretary and performs the secretarial duties of the offshore company, such as lodgment of any documents required under the OCA, and also makes available any of its Trust Officer for appointment as Resident Director.

Residents and non-residents of Malaysia are permitted to establish offshore companies in Labuan. The offshore company may carry out any business that is lawful in Malaysia in, from or through Labuan, but banking, insurance and insurance-related businesses, fund management, leasing, factoring and company management would require the offshore company to be licensed. Shipping operations in Malaysia are prohibited.

An offshore company must have at least one director and Resident Secretary who must be a Trust Officer of a trust company. There is no minimum capital requirement and the company may issue shares of different classes and of different rights but no bearer shares are allowed. Offshore companies are required at all times to have a registered office in Labuan. No person in an offshore company could divulge to others any information concerning share holding, management and any business, financial or other transactions of the company.

Generally, offshore companies may only carry on business activities with persons other than residents of Malaysia (except where permitted by LOFSA) and deal in currencies other than the Malaysian Ringgit, except for the purpose of defraying administrative and statutory expenses and receiving fees and commissions.

The annual fee for offshore company is RM2,600 while for foreign offshore company is RM5,300.