Over the years, Labuan IBFC's leasing industry has grown in tandem with the region's economic growth, as demand for capital equipment showed no sign of abating especially in the shipping, aviation as well as oil and gas industries.

Regulated and licensed by Labuan Financial Services Authority, all leasing companies enjoy an ideal balance of fiscal neutrality and certainty, allowing for effective management of their operational cost.

The ease through which leasing transactions can be structured along with a highly efficient tax framework has no doubt worked in Labuan IBFC's favour as it is now home to almost 300 leasing companies which are all reaping the benefits of structuring leasing arrangements via Labuan IBFC.

WHY LABUAN IBFC?

  • It has one of the most competitive fiscal regimes in Asia
  • It boasts a modern suite of robust legislative provisions, refreshed in 2010
  • It has been declared as a white-listed jurisdiction by the Organisation of Economic and Co-operation and Development (OECD) and complies to the international provisions on exchange of tax information
  • It has access to the Malaysian Double Taxation Network spanning more than 70 countries
  • It is strategically located in the heart of Asia Pacific, sharing its time zone with many major Asian cities
  • As part of Malaysia, Labuan is a member of the ASEAN trade bloc
  • It is well regulated with Labuan Financial Services Authority as the supervisory and regulatory authority
  • It offers an international ship registry for foreign-owned ships in Labuan
  • It is home to the world's first omnibus Islamic Finance legislation which encompasses all requirements for Shariah-compliant financial services, including leasing solutions.

LABUAN IBFC'S FISCAL ATTRACTIVENESS:

  • A low effective corporate tax rate of 3.0% or a maximum payment of RM20,000 per annum
  • Withholding tax exemption on payments made to non-residents on:

    • Dividends
    • Interests
    • Royalties
    • Technical fees
  • No capital gains tax
  • No wealth tax
  • No tax on distribution of profits and gains
  • No value added tax or goods and services tax
  • No stamp duty or import duty
  • No transfer pricing rules
  • No thin-capitalisation rules
  • No controlled foreign company rules
  • 50% tax abatement for expatriate professionals and managers
  • 100% exemption for director's fees received by non-citizen directors

With the potential cost-efficiency introduced by Labuan IBFC's leasing solution, both regional businesses or global businesses looking to penetrate Asia's growth markets would do well to consider Labuan IBFC as their middle shore jurisdiction of choice.

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