Offshore set-up

Brief information

“Offshoring” is defined as the movement of a business process done at a company in one jurisdiction to the same or another jurisdiction in another different country. Almost always work is moved due to a lower cost of operations in the new location. Offshoring is sometimes contrasted with outsourcing or offshore outsourcing.

Outsourcing is the movement of internal business processes to an external company. Companies subcontracting in the same jurisdiction would be outsourcing but not offshoring. A company moving an internal business unit from one jurisdiction to another would be offshoring but not outsourcing. A company subcontracting a business unit to a different company in another jurisdiction would be both outsourcing and offshoring.

There are a number of reasons why so many private individuals and businesses decide to incorporate offshore. Some of the major advantages are:

  • Tax saving
  • Simpler business administration
  • Asset protection
  • Privacy and anonymity
  • Global investment

At McMillan Woods, our professional services are designed and tailored for the entrepreneurs and high net worth individuals to operate their business and/or personal financial matters in complete confidentiality. The entrepreneurs will be able to run the business in complete privacy while residing in the jurisdiction of their choice. Through our associated companies, we can arrange for all the necessary administrative services, banking etc., all within the confinement of the laws. Setting-up to include operating fees vary with the types and complexity of the proposed entities. From our understanding of your goals and requirements, we will make the necessary recommendations.

Our services include the following:

  • Company formations in all major offshore jurisdictions;
  • Registered office and registered agent services (where appropriate) in each jurisdiction;
  • Full nominee services (Directors / Secretary / Shareholders) to ensure total anonymity;
  • Bank introductions;
  • Correspondence facilities;
  • Legalisation / Apostile of company documents; and
  • Formation of offshore trusts.

We are happy to discuss each and every individual client’s requirements and we are equally happy to tailor our services to suit different clients with different requirements.

For further information, please contact any of our member firms closer to you or click on the “Contact us” button to expedite communication.

Offshore set-up: Labuan

Labuan is the main island of the Malaysian Federal Territory, best known as an offshore financial centre offering international financial & business services since 1990 via Labuan International Business & Financial Centre. It is known as a safe, business-friendly and well-regulated financial destination and is home to a multitude of companies, insurance entities and banks.

The many benefits of setting up company in Labuan are as follows:

Corporate tax
Non-Trading and Investment activities @ Nil
Trading activities @3% or Max Malaysian Ringgit RM20,000

Indirect tax
Nil for Sales Tax, Service Tax, GST, VAT & custom duty

Personal income tax
Nil for Non-Malaysian Directors

Audit of company
No mandatory audit is applicable for certain activities

Stamp duty
There is no stamp duty in Labuan.

Gross employment income
50% Exemption for non-citizen resident managers

Exchange control regulations
None applicable. Free flow of funds

Investment Protection Agreement (IGA)
Currently, IGA with over 50 countries.

Double Tax Agreements (DTA)
Labuan has one of the largest double taxation treaty networks in the region – DTA with over 68 countries

Withholding Tax (WHT)
Nil is applicable on dividends, interest, management or technical fee, royalty and lease rental.

Other relevant information:

  • Choice of Foundations or Trusts with Labuan Special Trust as a modern trust option for wealth management.
  • Provision for the amalgamation of companies.
  • The setting-up of “Protected Cell Companies” for insurance or fund management.
  • Shipping as a Labuan business activity, provided it is carried out in Labuan and outside of Malaysia.
  • Advanced tax ruling which provides better clarity and certainty.
  • Non-residents can inject Malaysian assets into a Labuan Trust while residents can setup a trust for their international or Malaysian assets on approval of the regulator – Labuan FSA.
  • Bank can co-locate anywhere in Malaysia while companies can co-locate in designated areas.
  • The list goes on…

For further information, please email to our Secretariat Office.