Property Investment Company In Malaysia

Countries that have been hotbeds for property investment have started seeing an economic slowdown. However, Malaysia’s property market is moving in the opposite direction. Property prices have become very attractive because of the exchange rate advantage and higher threshold price for ownership by foreigners. As of now, investments in Malaysian properties can be effected in three ways: individual name, a Labuan International Company, and a Malaysia Sdn Bhd Company.

However, many foreign property investors do not know as to what type of an entity they should set up to derive maximum benefits, secure 100 percent interest, and maintain legality without the disruption of any law. A Labuan company offers the right solution as it can act as the sole shareholder of a local Sdn Bhd company which holds properties in the country.

Key Benefits of Investing In Properties In Malaysia Through A Labuan Company

  • A Labuan company can hold properties provided the purchase value of a property is minimum RM 1 million in Kuala Lumpur and RM 2 million in Selangor state.
  • The corporate tax payable by a Labuan company holding a local private limited company is zero percent. Further, no audit of accounts is needed.
  • The corporate tax payable by a local private limited company on rental receivables is 24 percent. Local people can be employed to manage the business and the office can be located anywhere in Malaysia. It costs much more for a Labuan company to set up a marketing office and pay a fee of RM 7,500 annually. Further, only a maximum of 4 people can be employed and the office has to be necessarily located only in Iskandar Johar and/or Kuala Lumpur. Moreover, a Labuan company can apply for setting up a marketing office only if there is an office in Labuan.
  • It is relatively easier to maintain the accounting books of the companies, the offshore Labuan company that acts as the investment holding company and the local private limited company that manages the operations in Malaysia.
  • The dividend paid by the local company to the shareholder, the Labuan company, is exempted from the payment of tax.
  • Property gains tax can be saved by transferring shares in the investment holding company in Labuan. The new shareholder automatically becomes the company's owner and the properties held by it. Further, the transfer of shares does not call for the payment of any stamp duty.

As such, a more tax-efficient and cheaper way of facilitating investments in properties in Malaysia is by setting up a Labuan company.

You can get in touch with us for more information as to which Labuan entity is best suited for you to achieve your business objectives. At QX Trust Limited, our experts will give you a clear idea of the process involved in owning properties in Malaysia through a Labuan company. You can visit our website, write to us at consultant@qx-trust.com, or call us at +60 182289533 and fix an appointment to get all your doubts clarified.