Labuan's unique position in international tax planning is even more entrenched as every single “treasure” described above applies, with appropriate modifications; to ALL Labuan “business wrappers” including the Labuan Chargeable company, Investment holding companies, Banks, Insurance entities, Protected Cell Companies, Limited Partnerships, Trusts and Foundations.
Across the board, these Labuan “wrappers” are able to enjoy certainty in its tax liability, with the comfort of knowing that even the most stringent substance requirements can be met cost effectively in Labuan.
Over the last couple of years, the Labuan Financial Services Authority has embraced the idea that the Labuan framework; specifically its legal and tax structure, should not be limited to the confines of the island.
Indeed, the thinking is so long as the Labuan framework is utilized there should be no limitation of the actual physical location of the entity. Welcome to Abstract Labuan!
The “birth” of abstract Labuan is personified with co location, which provides for Labuan entities to have a presence onshore in Kuala Lumpur or any other location within Malaysia. Clearly, Labuan is undergoing a paradigm shift.
A co located Labuan Holding company in Kuala Lumpur brings with it an array of practical benefits, for example Kuala Lumpur's location within 6 hours flight time of all the largest markets in Asia is ideal for directors of a European headquartered Multinational Company seeking a holding company location in Asia.
In addition, consider Malaysia's superb quality of life, its range of service providers, and its ever growing human resource pool, all of which are also big pull factors for holding companies to establish a collocated Labuan company. The icing on the cake though, has to be Malaysia's cost efficiency, at every turn and in every aspect, Malaysia provides better value for money than any other Asian jurisdiction instinctively considered.
Clearly, with the enhancements Labuan IBFC is undergoing there is no doubt its fast becoming Asia's jurisdiction of choice; in the challenging world of cross border taxation.