Recently, we have learned from our clients and business partners from various part of world that international business owners or business operators have started to look for jurisdictions that impose some taxes on their business. This is to make sure that their company or business is a tax resident for a particular jurisdiction. International business owners are constantly seeking for solution to address the pressure from the tax authority of their home country and international regulatory body like Organization for Economic Cooperation and Development (OECD); especially on the recently implementation of common reporting standard (CRS) and Automatic Exchange of Information (AEOI). Jurisdiction with zero tax are not so preferred anymore due to the pressure from the international regulatory body recently. Labuan Company can be a solution for you.
Labuan, being the mid shore jurisdiction fulfill the requirement of the above. A Labuan company need to pay some business tax but the tax rate is affordable at only 3 percent on profit. This make Labuan the preferred jurisdiction to many international business owners and operators
In addition to that, the quality of living and the cost of living in Malaysia is much superior than many other countries in other regions of the world. The currency exchange of Malaysian Ringgit (MYR) to United State Dollar (USD) is approximately 4:1, meaning you can exchange 4 Malaysian Ringgit with 1 United State Dollar.
If you compare to the Malaysia’s nearest neighbor country, Singapore, 3 Malaysian Ringgit (MYR) is equivalent to 1 Singapore Dollar (SGD) compare to the cost and quality of living of almost the same with Singapore, if not slightly weaker.
In Short, with the low tax rate, and the “weak” currency exchange of the Malaysian Ringgit compare with the standard or quality of living in Malaysia or Labuan; it is very viable for business for long run looking at the low business maintenance cost compared to other jurisdictions. The recent pressure from international regulatory body like OECD on economic substance requirement has added advantage to jurisdictions like Labuan to create substance for the company. This can be illustrated by knowing the minimum salary for a Malaysian is only Myr1200 per month in Labuan and there is a public university in Labuan providing the talents that you need. The rental for an operational office for a Labuan Company can be as low as less than USD200 per month in Labuan.
If you are facing the same challenges in your country and would like to find a suitable solution for your international business, please Whatsapp, Line or Wechat us to get a pre-business setup advisory with free of charge (FOC).
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