Disadvantages Of Labuan Ibc

On the global stages, there are too many business competitors nowadays. They need to have more abilities and efficiencies in taxes and resource allocation. The large amount of money is more likely to migrate to low-tax countries than high tax countries. Back in the 1980s, Hong Kong was one of the Asian offshore sectors, and Malaysians wanted to be one of it. So a small island off the coast of Borneo, Labuan is declared as an International Business and Financial Centre (IBFC) in 1990 with Labuan Financial Services Authority (FSA). Labuan FSA is the administrative of Labuan IBFC, which regulates the legal framework and legislative of the operation of Labuan IBFC. The declaration was to offer low-tax and no-tax corporate structures for foreign and Asian

The much lower tax jurisdiction compared Hong Kong is the main advantage for Labuan international company. There are options for the tax submission and lower tax rates for all types of international company in Labuan. Double Taxation Agreement avoids company owner to pay twice for the tax. Tax rebate given to Zakat helps the poor and needy to reduce financial burden. Tax exemption benefits cutting down the expenses of consumers in Labuan. Simpler business administration makes the offshore company in Labuan easy to set up than in Hong Kong and maintain companies in simple ways. Setting up of Labuan international company is easy and straightforward and does not have strict financial rules and regulations compare to Hong Kong. The paid-up capital of company is low and foreigners may use foreign currencies instead of Malaysians currencies. Everyone is allowed to open bank account and the procedure is not complicated at all. Lastly, one’s asset or wealth is under protection under Labuan Foundation Act makes foreigners feeling more comfortable and secure to set up international company branches in