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Malaysia International Ship Registry
  • 1. What is the Malaysia International Ship Registry?
    The Malaysia International Ship Registry (MISR) is a body for the registering of international ships. The MISR has been established to encourage individual and foreign shipping companies to register their ships in Malaysia without having to comply with the requirements of a Malaysian majority shareholder.
    The MISR serves as an alternative ship registration system to the traditional shipping registry in Malaysia and aims to create a competitive shipping registry to those in other parts of the world. The MISR will further boost the development and promotion of the maritime industry in the country as well as the financial and business activities in Labuan IBFC.
  • 2. What are the permitted activities under the MISR and their tax implications?
    Ships registered under the MISR can undertake “shipping operations” as defined in the Labuan Business Activity Tax Act 1990 (LBATA) and are eligible for the preferential tax treatment under the LBATA. In addition, all incentives under the income tax and stamp duty exemptions will be applicable to Labuan companies which undertake shipping activities. Section 54A(1) of the Income Tax Act 1967 grants exemptions in respect of statutory income received from the operation of a Malaysian ship where certain qualifying conditions are met.
  • 3. What is the definition of shipping operations?
    Shipping operations as defined in the LBATA refer to the transportation of passengers or cargo by sea or the letting out of a charter of ships on a voyage or time charter basis.
  • 4. What is the scope of “shipping operations” eligible for preferential tax under Labuan tax laws?
    Shipping operations that are eligible for preferential tax treatment under the LBATA are as follows:
    With non-residents:
    • Charter of ships either on time or voyage charter basis; and 
    • Carrying of cargo or transportation of passengers. 

    With residents:
    • Bareboat charter.
  • 5. What are Labuan IBFC’s expectations of MISR?
    The MISR is expected to generate economic spin-offs for Labuan and Malaysia due to the increased recognition of Labuan as an international ship registry, including: greater employment opportunities for Malaysians in related services such as ship management, bigger pool of Malaysian professionals for the development of Malaysia’s shipping industry, more activities for support services required by ships plying the surrounding regions such as repair and bunkering services, and rising demand for financial services offered in Labuan IBFC including ship financing, leasing and marine insurance.
  • 6. What is the governing legislation?
    The MISR is governed by the Merchant Shipping Ordinance 1952 and the Labuan Business Activity Tax Act 1990.
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