A company that earns income from the payment of dividends, rent or interest. The investment holding company does not produce goods or offer services itself, and instead acts as a holding company by owning shares of other companies. One example of an investment holding company is a Real Estate Investment Trust (REIT).

Guidelines On Co-Location Of Labuan Holding Company

1. Preamble

  • This Guideline provides the requirement for the establishment of an operational and management office of Labuan Holding Company (LHC) in Kuala Lumpur (co-location). This is to facilitate the business of the LHC by leveraging, among others, on the infrastructures, human capital, professional services, recreational and residential facilities that are available in Kuala Lumpur.
  • The application for approval to set up an operational and management office should be submitted to The Authority prior to the establishment of the office.
  • For the purpose of this Guideline, the term “LHC” refers to a Labuan company incorporated under the Labuan Companies Act 1990 (LCA) that carries on permitted activities as stipulated in paragraph 3.0 herein in its office in Kuala Lumpur.

2. Who Qualifies?

  • 1 The application for approval under this Guideline can be made by-
    • a company incorporated under the LCA; or
    • any person intending to incorporate a company under the LCA.
  • The applicant must have international and/or regional operations/businesses.

3. Permitted Business Activities

  • The LHC must carry on business with non-resident of Malaysia and in non-Ringgit except as permitted under the LCA and the Exchange Control Act 1953.
  • Subject to The Authority’s approval, the LHC is allowed to carry on any one or a combination of the following business activities from its office in Kuala Lumpur-
    • Holding of investment in securities, stocks, shares, loans, deposits or immovable properties.
    • Providing management services including administrative, human resource, accounting and backroom support services to:-
      • related companies within Malaysia; or
      • related or non-related companies outside Malaysia.
  • Managing surplus funds and providing credit facilities to related companies within the group in and outside Malaysia.
  • Trading or invoicing activities outside Malaysia.
    Note: “Related companies” has the meaning assigned to it in the LCA.

4. Operational Requirements

  • Location and address of the office
    • An LHC is required to inform The Authority the address and contact numbers of its office in Kuala Lumpur prior to the commencement of the operations and any subsequent changes.
    • The office of the LHC in Kuala Lumpur must be separated from the office of other entity/company; and
    • managed by its own personnel with independent books and records.
  • Name and Signboard
    • The name of an LHC must be easily legible in Romanised characters, printed on a signboard affixed at the entrance of the office.
    • The signboard must contain the following information
      • the LHC’s incorporation number; and
      • the words “Labuan Company”.
    • In addition, the LHC must comply with requirements of the relevant local authorities, whenever applicable, with regard to the signboard.
  • Directors and Principal Officer
    • An LHC shall appoint a minimum of one (1) director of any nationality and no corporate director is allowed.
    • An LHC is required to notify The Authority of any change of its Principal Officer.
  • Others
    • An LHC must have sufficient paid-up capital to commensurate or in accordance with its operations and activities.
    • An LHC must make an irrevocable election to be taxed under the Income Tax Act 1967 (ITA) pursuant to section 3A of Labuan Business Activity Tax Act 1990. Hence, the LHC is required to:-
      • comply with the provisions of the ITA;
      • submit annual audited accounts to The Authority; and
      • conduct Annual General Meeting in Malaysia.
    • An LHC must provide statistical information to The Authority in such manner and frequency as may be determined by The Authority.
    • Subject to relevant provision of the laws relating to disclosure of information, the LHC will provide The Authority with any information relating to its business and operations whenever it is required.
    • To comply with other requirements of the LCA and the relevant laws, whichever applicable, including obtaining work permit from the Immigration Department of Malaysia for expatriates employed by the LHC in Malaysia.

5. Annual Fee

  • The LHC that co-locate under this Guideline is required to pay to The Authority an annual fee of RM7,000 once the approval is given. The subsequent payment of annual fee is payable not later than 15 January of each year during which the approval is valid.

6. Revocation and Surrender

  • The Authority reserves the right to revoke the approval if The Authority is satisfied, based on the information made available to it, that the LHC has not complied with any laws or requirements.
  • Notwithstanding the above, the LHC may surrender the approval under this Guideline by notifying The Authority in writing not less than 1 (one) month from the date it intends to close the office.