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Annual fee of an offshore company is payable not later than one month from the anniversary of its incorporation. In practice, a trust company normally asks for this payment three to four months before it is due.

With effect from 1^st July 2008, LOFSA’s annual fee charged for new Labuan offshore companies incorporated on or after that date has been reduced from RM2600 to RM1500.

For all existing Labuan offshore companies incorporated on or before 30^th June 2008, LOFSA’s annual fees payable are as follows:

1) if the due date (last day to pay annual fee) falls on or before 31^st July 2009, LOFSA’s annual fee payable is RM2600 and thereafter RM1500 only. (see example 1)

2) if the due date (last day to pay annual fee) falls on or after 1^st August 2009, LOFSA’s annual fee payable is RM1500 only. (see example 2)

Example 1) if a company is incorporated on 5^th April 2008, its anniversary is on 5^th April 2009. Its annual fee shall be paid not later than 30 days from its anniversary which means by 4^th May 2009. This company still pays RM2600 in 2009 but will pay RM1500 in the following years.

Example 2) if a company is incorporated on 5^th July 2008, its anniversary is on 5^th July 2009. Its annual fee shall be paid not later than 30 days from its anniversary which means by 4^th August 2009. This company therefore only pays RM1500 in 2009 and thereafter.

Failure to pay the annual fee within the prescribed period will render an offshore company liable to a penalty. If non-payment persists for more than a year, strike off proceeding may be taken against the offshore company.