Set up a Branch in Labuan: Registration with Labuan FSA

Branches in Labuan are registered with the Labuan Financial Services Authority (as foreign Labuan companies) and represent a legal business structure that operates under the rules and regulations of the parent company. The registration of a branch in Labuan is an easy process that can be properly handled by our team of company formation agents in Labuan for foreign investors who want to enter the Malaysian market.

Quick Facts
Definition of a branch in Labuan	An extension of a foreign company that operates in Labuan and the Labuan International Business and Financial Centre (IBFC) for conducting offshore activities.
General documents required for opening a branch	– power of attorney, – identification details for the parent company, – parent company’s Memorandum and Articles of Association, – resolution to open a branch, etc.
Possibility of setting up multiple branches (YES/NO)	YES
Steps of opening a branch	– prepare documentation, – open a bank account, – appoint a representative agent, – establish the board of managers, – register for tax purposes
Tax returns	Must be filed electronically (Form LE1) within 7 months after the end of the accounting period
Remote registration	We handle company formation in Labuan and branch registrations remotely through power of attorney.
GST rate	Not applicable – GST was abolished on 1 September 2018 (replaced by SST; Labuan is a designated area largely outside SST)
Corporate income tax	3%
Authorities overseeing branches in Labuan	– Inland Revenue Board of Malaysia, – Labuan Financial Services Authority , – the Central Bank of Malaysia, – Malaysia Immigration Department
Alternatives to a branch office	Our specialists in company incorporation in Labuan can help you open alternative entities such as a representative office or a subsidiary.
Can hire employees (YES/NO)	YES
Number of double taxation treaties in Labuan	73 (approx.)
Other taxes in Labuan	Income from intellectual property is taxed under the Income Tax Act 1967 (24% corporate rate), not under the Labuan 3% regime
Advantages of opening a Labuan branch	– tax benefits, – access to Asian market, – financial services hub, – minimal reporting requirements, – no exchange controls, – easy incorporation process, etc.
Assistance	We can help you open a company in Labuan or expand your business by establishing a branch.
Tax registration obligations	The branch in Labuan is liable to the same tax obligations imposed to other types of entities.
Tax reporting	All companies, branches included, are required to file tax reports on a yearly basis (within 7 months after the end of the accounting period), as per the rules of the Labuan Business Activity Tax Act.
Audit obligations	Investors who want to set up a branch in Labuan must conduct an audit of the financial documents (for this, an external auditor must be appointed).
Audit exemptions	Companies can be exempted from audit in certain circumstances. However, if you plan to set up a branch in Labuan operating in the financial industry, the audit will become mandatory regardless of the circumstances.
When can a branch start its activity?	After it has obtained all the necessary certificates, incorporation documents and approvals.
Fees for branch registration	USD 2,500 (Labuan FSA registration fee for a foreign Labuan company from 1 January 2026; also payable annually)
Tax number required (yes/no)	Yes
Accounting legislation applicable to foreign branches	Labuan Business Activity Tax Act, Labuan Companies Act
Termination of business operations of a branch	There are 2 options – voluntary wind-up procedure and the default in annual fee payments.
Institution in charge with the liquidation of a branch	Labuan Financial Services Authority
Notary proceedings (yes/no)	Yes
Ways in which our team can help in registering a branch	If you want to set up a branch in Labuan, our consultants can provide assistance in the preparation of the registration file, contact competent institutions on your behalf, obtain permits and licenses, etc. You can also rely on our team for tax compliance, employment or business/employment immigration.
Tax representative	It is necesary to appoint a tax representative
Registered address	The branch must have a registered address in Labuan .
Independence from the parent company	By definition, a branch is a structure that is fully dependent on the parent company, therefore it is not independent from its parent.

What are the steps for opening a branch in Labuan in 2026?

Among the important steps of opening a branch in Labuan as a foreign company, we mention the following:

register the foreign company with the Labuan Financial Services Authority as a foreign Labuan company;
appoint a licensed Labuan trust company as local agent and registered office provider;
prepare the certified copies of the parent company’s incorporation documents and constitutional documents;
provide details about the parent company, including its directors and officers;
open a bank account for submitting the minimum share capital and future financial operations of the branch;
submit the memorandum of appointment or power of attorney naming the Labuan trust company;
pay the applicable registration fee and observe the annual fee requirements;
if the branch will carry out regulated activities, such as: banking, insurance, leasing or fund management, you will have to obtain a special license;
register for employment-related obligations, only if the branch hires employees locally.

We invite you to watch a short video on how to register a Labuan branch:

What documents are required to open a branch in Labuan?

To set up a branch in Labuan, an overseas company must obtain registration as a foreign Labuan company before carrying out business activities there.

The main documents required are:

certified copy of the parent company’s certificate of incorporation or registration;
list of directors and officers of the foreign company;
memorandum stating the powers of local directors, if the foreign company appoints directors residents in Labuan as part of a local board;
memorandum of appointment or power of attorney, confirming the Labuan trust company authorized to accept official notices and service of process on behalf of the foreign company;
statutory declaration made by an officer of the Labuan trust company;
proof of payment of the prescribed registration fee.

If any document is not written in English or in the Bahasa Malaysia (the national language), you must provide a certified translation. This is important for incorporation documents, constitutional documents, certificates and other official instruments submitted to Labuan FSA.

How is a company name reserved?

When you set up a branch in Labuan in 2026, you will be required to select a suitable company name. This is necessary regardless of the company type selected for incorporation. The company name must follow the standards imposed by the Registrar.

First, the investors will have to reserve the company name that they are interested in, and they will also need to pay a fee during this procedure.

If the desired company name meets the required standards as per the applicable legislation, the name will be approved and reserved for the next 3 months.

In general, the registration of the company with the Labuan Financial Services Authority does not imply other fees, but exceptions can apply for specific situations.

What are the main benefits of branches in Labuan?

Branches in Labuan are treated as extensions of a foreign company that expands its operations in Labuan. The branch is a completely dependent structure and any business decision of a Labuan branch is usually subject to acceptance of the parent company and only then can be implemented.

Our consultants have prepared an infographic that presents the main advantages of opening a branch in Labuan in 2026:

the-advantages-of-opening-a-branch-in-labuan

Which authorities offer approvals for a branch in Labuan?

The main authority involved in the registration of a branch is the Labuan Financial Services Authority (FSA).

Depending on the activity of the branch, other authorities may be involved:

Inland Revenue Board of Malaysia (IRBM or HASiL) – for tax registration, return of profits and Labuan tax compliance;
Immigration Department of Malaysia – if foreign directors, managers or employees need work permits to work in Labuan;
Bank Negara Malaysia, the Central Bank of Malaysia – only where the activity or transaction falls under Malaysian banking, financial or foreign exchange rules;
Royal Malaysian Customs Department – if the branch has sales and service tax obligations or imports taxable goods into Malaysia.

Some branches may need additional approvals before starting operations. This is usually the case for activities in banking, insurance, leasing, fund management, financial services, securities, trust services or other regulated sectors.

How can we help you set up a branch in Labuan in 2026?

Our agents can guide you through the entire branch registration procedure. Here are some examples of actions:

check if a branch is the right structure for your business plans in Labuan;
explain the registration requirements;
assist you with the appointment of a licensed Labuan trust company;
prepare the files for submission;
check if your activity requires any special license before the operations begin.

If you would like to know more about how you can set up a branch in Labuan in 2026, contact our team!