A Labuan company:
- may be a company limited by shares or by guarantee or an unlimited company.
- may participate in business activities and enjoy attractive tax benefits provided under the Labuan Business Activity Tax Act 1990 (LBATA).
- may carry out any business that is permitted in Malaysia in, from or through Labuan.
- would need to be licensed if it intends to undertake specific businesses as defined under the Labuan Financial Services and Securities Act 2010 or the Labuan Islamic Financial Services and Securities Act 2010, which may include the banking, insurance/insurance-related, fund management, leasing, factoring and company management businesses.
Residents and non-residents of Malaysia are permitted to establish Labuan companies. Section 7(5) of the Labuan Companies Act 1990 (LCA) allows a Labuan company to deal with a resident subject to the filing of notification to Labuan FSA within 10 working days of the transaction.
Business transactions of Labuan companies must be made in currencies other than the Malaysian Ringgit, except for the purpose of defraying administrative and statutory expenses as well as receiving fees and commissions.
Labuan companies can own controlling stakes in a Malaysian domestic company and are also allowed to undertake shipping operations with non-residents.