29 April 2019
The Labuan Business Activity Tax (Requirements for Labuan Business Activity) Regulations 2018 (“Regulations”) came into operation on 1 January 2019. The Regulations require a Labuan entity to have a specified number of full-time employees on Labuan island as well as a stipulated amount of annual operating expenditure. The Regulations specify that a Labuan entity carrying on a Labuan business activity must establish an office in Labuan with a minimum of two to four full-time employees and have an annual operating expenditure in Labuan in the range of MYR50,000 to MYR3 million depending on the type of business. For example, a Labuan bank, investment bank, Islamic bank or Islamic investment bank must have a minimum of three full-time employees in Labuan and a minimum amount of annual operating expenditure in Labuan of MYR180,000.