ja_mageia_template_j15

An offshore company may carry on any business which may be lawfully conducted in Malaysia in, from or through Labuan.[1]An offshore company may not carry on licensable business unless licensed accordingly. An offshore company must carry on business in, from or through Labuan.[2] This provision must be adhered to as it is the compliance of this provision that will ensure the Labuan offshore company enjoys the taxation benefits under the Labuan Offshore Business Activity Tax Act 1990 or LOBATA 1990. [3] There have been instances where the Inland Revenue of Malaysia determined that a Labuan offshore company that did not conduct its business on, from or through Labuan was subject to tax under the Income Tax Act 1967 or ITA 1967. In the absence of any Court case deciding the meaning of “carrying on business in, from or through Labuan”,, care should be taken by clients or investors establishing and structuring a Labuan offshore company especially the location and the manner in which an offshore company’s business is carried out.