Labuan Companies & Partnership Laws (As at 20th June 2011)

Labuan Companies & Partnership Laws

Labuan Limited Partnerships and Limited Liability Partnerships Act 2010 (Act 707) - An Act to provide for the establishment, regulation and dissolution of Labuan limited partnerships and Labuan limited liability partnerships and for matters connected therewith or incidental thereto.

Detailed Contents of Labuan Companies & Partnership Laws:

Off the coast of the state of Sabah, Malaysia has a federal territory called Labuan. It has its own set of laws and rules governing corporations and partnerships, which are intended to entice foreign corporations to locate in Labuan. The two main pieces of law governing corporations and partnerships in Labuan as of June 20, 2011, are the Labuan Companies Act 1990 and the Labuan Limited Partnerships and Limited Liability Partnerships Act 2010.

1990 Labuan Companies Act:

The Labuan Companies Act of 1990 outlines the procedures for forming, governing, and managing businesses there. A company that is incorporated or registered in accordance with the legislation and has its management and control in Labuan is referred to as a Labuan company under the said statute.

Qualities of Labuan businesses:

• Tax advantages: Businesses in Labuan pay a flat tax of MYR 20,000 per year or a low rate of 3% on their net audited profits, whichever is lesser. They are also exempt from royalties, interest, and dividend withholding taxes.
• Due to the limited liability of Labuan corporations, shareholders' liability is only up to the value of their share capital.
• Simplicity of incorporation: There is little red tape and no minimum capital requirements, making it simple and quick to form a Labuan company.
• Versatile organisational structure: In Labuan enterprises, a single individual may serve as both a shareholder and a director. They may also issue bearer shares and have a corporate director.
• Confidentiality: Only specific authorised individuals are permitted to learn the names of the shareholders and directors of a Labuan firm; the public is not given access to this information.

Act of 2010 on Labuan Limited Partnerships and Limited Liability Partnerships:

The registration, oversight, and management of limited partnerships and limited liability partnerships in Labuan are all covered under the Labuan Limited Partnerships and Limited Liability Partnerships Act of 2010.

Labuan partnership characteristics:

Tax advantages: Labuan partnerships enjoy a low tax rate of 3% on their net audited earnings or a flat rate of MYR 20,000 per year, whichever is lesser, much as Labuan businesses.

• Tax advantages: Labuan partnerships enjoy a low tax rate of 3% on their net audited earnings or a flat rate of MYR 20,000 per year, whichever is lesser, much as Labuan businesses.
• Limited liability: In a limited partnership, the maximum amount of responsibility for limited partners is the amount of their capital contribution. All partners have a limited liability in a limited liability partnership.
• Flexibility in structure: Limited partnerships and limited liability partnerships can both be set up in ways that give the participants different degrees of authority and responsibility.
• Confidentiality: Only those persons with the proper authorization may learn the identities of the partners in a Labuan partnership.

In conclusion, Labuan has made a name for itself as a desirable jurisdiction for companies wishing to take advantage of its secretive nature, adaptable company structure, and tax-efficient environment. For businesses and partnerships looking to establish themselves in Labuan, the Labuan Companies Act of 1990 and the Labuan Limited Partnerships and Limited Liability Partnerships Act of 2010 offer a supportive legal framework.

Labuan Companies & Partnership Laws Contains:

- Labuan Companies Act 1990 (Act 441)
- Labuan Business Activity Tax Act 1990 (Act 445)
- Labuan Limited Partnerships and Limited Liability Partnerships Act 2010 (Act 707)
- Labuan Offshore Business Activity Tax (Forms) Regulations 1991
- Labuan Companies Regulations 2010
- Labuan Limited Partnerships and Limited Liability Partnerships Regulations 2010

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