Introduction

Labuan is part of Malaysia, and Malaysian company law applies there. Most foreign companies wanting offshore status in Labuan will use  or  status, see below. These offshore forms are subject to Malaysian Company law except as described below. Regular Malaysian companies can be used in Labuan, but will not receive the tax and other privileges accorded to Offshore Companies.

Generally, companies incorporated in Malaysia are regulated by the Malaysian Companies Act, 1965. The types of companies are:

a company limited by shares, which can be private or public;

branch of a foreign company;

partnership or sole proprietorship.

Foreign investors normally conduct their businesses in Malaysia in the form of a private company limited by shares.  Incorporation of a company requires an application to be made to the Registrar of Companies to approve the proposed name by submitting the following forms:  

Memorandum and Articles of Association

Statutory declaration of compliance with the Companies Act  

Certificate of identity  

Consent to act as director  

Statutory declaration by persons before appointments as directors  

Companies pay registration fees based on the amount of authorized capital, and both filing and stamping fees apply for submission of the above documents. Registration fees are on a scale from RM 1,000 for capital below RM 100,000 to RM 70,000 for capital above RM 100m.   A company must have a minimum of two directors and one secretary, having their principal or only place of residence in Malaysia. A register of directors is kept at the registered office of the company and is available for public inspection. Audited profit and loss accounts and annual returns are required. Partnerships and sole proprietorships must register with the Registration of Businesses before they can begin to operate. There is a registration fee and an annual renewal fee.

Private Company Limited by Shares

Private companies, denoted as "Sendirian Berhad" or "Sdn. Bhd.," may be limited or unlimited. A private limited company restricts the right to transfer its shares, limits its membership to no more than 50, prohibits public subscription to its shares, and prohibits invitation to the public to deposit money with the company for fixed periods or payable by call.

A private company may be classified as an 'exempt private company' if its shares are not beneficially owned directly or indirectly by any corporation and it has not more than 20 members. An exempt private company need not submit its balance sheet and profit and loss account with its annual return, and it may make loans to directors and companies in which the directors own interests.

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Company Limited by Guarantee

In a company limited by guarantee, the liability of members is limited to a specified amount undertaken to be contributed to assets on the company's termination. These are generally nonprofit organizations.

Public Company Limited by Shares

Public limited companies, denoted as "Berhad" or "Bhd.," are companies whose shares may be offered to the public for subscription. Companies may apply to the stock exchange for permission to have their shares listed. A public company is a company other than a private company. A public company must be issued a certificate by the Registrar of Companies ...

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