Choosing a Company

Your business needs the right type of entity and a suitable location.


Choosing the most appropriate jurisdiction for your business is vital, whether your business is going to be limited to the locality or if you plan to carry out cross border business. Some jurisdictions offer “offshore company” benefits which are tax-exempt but are only allowed to transact outside of the jurisdictions the companies were incorporated. Examples of such jurisdictions are the BVI, Samoa and Seychelles. In the case of Labuan, the companies enjoy low tax benefits however certain transactions with residents are still allowed but subject to prior approval from the regulatory authority. Whereas Brunei offers “onshore companies” where you have no restrictions doing business locally and expand beyond its border, subject to its local tax regime. Truly, there is no standard business situation as it all depends on the type of business you want to operate and your target market. However, you may want to consider certain factors when choosing the right jurisdiction for your company incorporation like:

  • The country’s political and economic stability
  • The country’s reputation
  • Tax and legal systems
  • Modern company and labour laws
  • Reliability of infrastructure and telecommunications
  • Availability of human resources and ancillary service providers
  • Reliability of banking system

Learn a bit more about Brunei

Brunei is strategically located in the heart of South-east Asia and the country is flanked by premier financial services centres such as Hong Kong, Singapore and Kuala Lumpur. Being a former British protectorate, Brunei’s judiciary system is based on the English Common Law, thus making it a familiar turf for global players. The sultanate has always been known as one of the wealthiest nations due to its vast hydrocarbon resources. With a population stands at around 415,000, its people enjoy a standard of living that is among the highest in the world in terms of per capita GDP.

In recent years, increased emphasis has been placed for economic diversification and the government is focused on making the most of ASEAN’s recent surge in growth by attracting foreign direct investment. Brunei enjoys one of the most liberal tax regimes in the region. Attractive incentives in the form of tax exemption between 5 and 20 years are available for investor for pioneer industries in the form of corporate tax relief, exemption from import duties tax, machinery, equipment and adjustments of capital allowances and losses.

General Information

Time Zone GMT +8 hours
Geography Situated on the north-western coast of Borneo, with a total area of 5,765 sq. km, borders the Malaysian state of Sarawak and the South China Sea
Capital City and Business Centre Bandar Seri Begawan
Language Bahasa Melayu (official). English is widely spoken and the language in business
Accessibility Most South-east Asian key regional cities, Hong Kong, Shanghai, Dubai and London
Currency Brunei Dollar (B$) is parity with Singapore Dollar
Exchange Control No
Government Constitutional sultanate (Malay Islamic Monarchy as guiding principle)
Legal System Based on English common law with a parallel Syariah Law
Tax Treaties ADTAS with the UK, Indonesia, China, Singapore, Vietnam, Bahrain, Oman, Japan, Pakistan, Malaysia, Laos, HK SAR, Kuwait, Qatar, UAE, South Korea, Luxembourg and Cambodia
TIEAs Australia, Canada, France and the Nordic Countries
AEOIs Yes
Economic Activities Dominated by oil and gas industry, SMEs are well flourishing, financial services, ICT and tourism sectors are developing
Banking Good with a presence of major international and local banks
Other Service Providers Small but mature with the presence of long established legal and accounting firms

Information on Brunei Private Companies (Sdn Bhd)

Legislation Companies Act (CAP. 39)
The Authority Registrar of Companies (ROC) within the Ministry of Finance and Economy (MOFE)
Types of Company Limited by shares. All private companies name must end with the words “Sendirian Berhad” or its abbreviation “ Sdn Bhd” to denote its limited by shares company
Restriction on Activities May carry out any business that is lawful in Brunei either in, from or through the country. Financial services and activities require licensing from the Autoriti Monetari Brunei Darussalam (AMBD)
Corporate Tax
  • Headline tax of 18.5% for companies incorporated or registered as foreign branch under the Companies Act (CAP. 39). It is chargeable on a threshold basis as follows -
    • 25% of the first B$100,000 of assessable income is chargeable at 18.5%;
    • 50% of the next B$150,000 of assessable income is chargeable at 18.5%; and
    • the full amount of the remaining assessable income is chargeable at 18.5%
  • Tax of 55% for companies engaged in the exploration and production of oil and gas
  • Exemption from corporate tax if gross sales/turnover during the basis period is less than B$1 Million
  • Certain specific industry tax incentives are available
There is also corporate tax exemption on chargeable income for the first 3 consecutive years of assessment for newly incorporated companies
Withholding Tax Yes
Personal Income Tax No
Value Added Tax No
Sources of Tax Law Income Tax Act (CAP. 35), Income Tax Act – Petroleum (CAP. 119)
Capital Requirement Minimum paid-up capital of B$2.00 and minimum authorized capital is B$25,000.00
Currency of Capital Brunei Dollar (B$)
Registered Office Required
Shareholders Minimum of 2 shareholders, they can either be individual or corporation. No residency requirement and 100% foreign owned is allowed
Directors
  • Minimum of 2 directors, at least one must be ordinarily resident in Brunei
  • If more than 2 directors, at least 2 of them must be ordinarily resident
Company Secretary Not mandatory
Registered Office
  • Local registered office and physical addresses are required (no PO box)
  • Statutory books of the Company must be maintained at the registered office
Annual Fees Payable
  • Only pays the capital registration fee on incorporation
  • No annual recurring government fee
Public Records Available via company search at the ROC
Company Accounts
  • 1st accounts must be prepared and adopted within 18 months from the date of incorporation and every subsequent 12 months thereafter
  • Accounts must be kept at the registered office
Audited Accounts Not mandatory if –
  • all shareholders individuals;
  • if shareholders consist of less than 20; and if the revenue in a financial year is less than B$1 Million (for financial year which is less than 12 months, the revenue shall be proportionately adjusted)
Incorporation Time 2 business days
Company Meetings Every company is required to hold an Annual General Meeting (“AGM”) of the shareholders to adopt the accounts. The first AGM must be held within 18 months from the date of incorporation and thereafter, an AGM must be held once in every calendar year and not more than 15 months from the date of the last AGM. In addition, the accounts tabled at the AGM must not be more than 6 months from the date of financial period
Common Seal Not required
Annual Return Yes
Tax Return Yes
Online Incorporation Available, via ROC BN https://www.roc.gov.bn

Last Updated: Jun2019

A quick look on Labuan

Labuan is one of the three federal territories of Malaysia located off the north-east coast of Borneo in East Malaysia (Borneo Island comprises of territories belonging to three sovereign nations – Brunei, Indonesia and Malaysia).

The territory of Labuan consists of 7 small islands of which Labuan Island is the largest. The weather is tropical with the main island benefits from its nice beaches and excellent hotel facilities making it an ideal place for business and pleasure. The population of approximately 100,000 and the people are mostly bilingual with Bahasa Melayu is the national language but English is the main language of business.

Labuan is located in the heart of the ASEAN community and the main island is accessible from Kuala Lumpur, Kota Kinabalu (the capital of Sabah, a state in Malaysian Borneo) and Brunei.

General Information

Time Zone GMT +8 hours
Geography Situated off the coast of Borneo island, with a total area of 92 sq. km, adjacent to the Malaysian State of Sabah and facing the South China Sea
Language Malay language (official). English is widely spoken and for commercial dealings
Accessibility Direct flights via Kuala Lumpur and Kota Kinabalu, ferry services from Brunei
Currency Ringgit Malaysia (RM or MYR) as official
Exchange Control No
Government A federal territory directly administered by the Malaysian government
Legal System Based on English common law
Tax Treaties Access to Malaysia’s network of over 70 DTTs
Economic Activities Dominated by international financial services industry, and also hydrocarbon related activities
Banking Good with the presence of international and local banks
Other Service Providers Numerous trust companies, insurance related companies, investment managers, legal and accounting firms

Important Features of Labuan Companies

All Labuan companies are governed by the Labuan Companies Act 1990 and companies incorporated in Labuan carrying out either trading or investment holding ("non-trading") activity. Labuan Financial Services Authority (LFSA) is the statutory body responsible to regulate and supervise international businesses and financial services industry in Labuan.

Legislation Labuan Companies Act 1990
The Authority Labuan Financial Services Authority (LFSA)
Official website: www.labuanibfc.com
Tax Authority Inland Revenue Board of Malaysia (IRB)
Official website: www.hasil.gov.my
Types of Company Trading and Non-Trading ("investment activities")
Permitted Activities • May carry out any business that is lawful in Malaysia either in, from or through Labuan
• Can conduct business activities with residents of Malaysia
• Can transact in Ringgit Malaysia (RM)
• Labuan business activities including holding companies are subject to economic substance requirements in Labuan
• Royalty and other income derived from IP rights are subject to tax under the domestic Income Tax Act 1967
• Banking, insurance, trust companies, leasing, fund management and other financial services and activities require licensing from LFSA
Taxation • Labuan trading companies are subject to 3% tax of net audited profit
• Labuan non-trading companies benefit from 0% tax. However, it may be subjected to economic substance requirements if deemed holding companies
• All Labuan companies receive Tax Identification Number (TIN)
Registered Agent/Office Required
Incorporation Time 2 business days
Annual Fees Payable • 1st year capital registration – USD300 (approx. equivalent in RM1,000) for paid-up capital not exceeding RM50,000
• Annual - USD700 (approx. equivalent to MYR2,600)
Confidentiality Yes
Bearer Shares Not permitted
Minimum Capital 1 share
Currency of Capital Any currency, except Ringgit Malaysia (RM or MYR)
Shareholders Minimum 1, corporate shareholder is allowed
Directors Minimum 1, corporate director is allowed
Company Secretary Resident company secretary is mandatory
Registered Office Registered office address is mandatory
Public Records No
Location of Meetings Anywhere
Common Seal Yes
Company Accounts Yes
Audited Accounts Mandatory for Labuan companies carrying on trading activities
Annual Return Yes
Change in Domicile Yes

How can we help you from our Labuan office?

Konsultan provides support to start-ups, SMEs, investment holdings or cross-border business activities. Operating from offices situated in two jurisdictions, we incorporate companies and provide full spectrum of corporate secretarial, administration and full management services for various type of entities, domestic and international, as follows:

  • Private limited companies
  • Public companies
  • Companies limited by guarantee
  • Unlimited companies
  • Protected cell companies (PCC)

Ready to incorporate?