Malaysia Hotline: +603- 2141 8908
An
Offshore Company (or an Offshore Foreign Company) is only permitted to carry on
business in, from or through Labuan. An Offshore Company may not:
-carry
on business with a resident of Malaysia except as permitted by the Offshore
Banking Act 1990;
-carry
on the business of Banking or Insurance or such similar business unless it is
licensed so to do under the Offshore Banking Act 1990 or the Offshore Insurance
Act 1990;
-carry
on business in the Malaysian currency except for defraying its administrative
and statutory expenses;
-carry
on business of shipping or petroleum operations in Malaysia or carry on
business as a trust company.
The
Offshore Companies Act was amended to allow Malaysians to own offshore
companies, as well as to permit foreign-owned offshore companies to invest in
Malaysia subject to certain conditions. Manufacturing activities are normally
carried out by companies incorporated under the Malaysian Companies Act. An
activity which is neither offshore trading nor offshore non-trading will be
subject to tax under the regular tax regime. Offshore insurance and banking
businesses are permitted to maintain a marketing office in Kuala Lumpur until
the Government decides that the management office should be relocated in
Labuan.
An
Offshore Company is not treated as carrying on business with residents of
Malaysia if:
-it
makes or maintains deposits with a person carrying on business in Malaysia;
-it
makes contact with professional advisers carrying on business in Malaysia;
-it
prepares and maintains books and records in Malaysia; it acquires or holds any
lease or property for operational purposes or accommodation of its employees;
-it
holds directors’ or members’ meetings within Malaysia;
-it
holds shares, debt obligations, or other securities in a company incorporated
under the Offshore Companies Act 1990 or in a domestic company, or holds
shares, debts obligations or other securities for the purposes of a transaction
entered into in the ordinary course of a money-lending business.
Labuan
Employment and Residence
To
facilitate offshore activities in Labuan, a liberal immigration policy has been
adopted. Multiple entry visas are issued to expatriates who have been granted
employment permits to work with offshore companies in Labuan.
The
normal Malaysian rules, which are softened in many situations in Labuan, are as
follows:
Any
person who wishes to enter Malaysia to take up employment with a Malaysian
company or firm must apply for an employment pass from the Department of
Immigration.
Employment
passes are issued for a specified period, usually two to three years, and are
renewable for an additional two to three years.
Employment
passes are granted on a case-by-case basis, generally for positions that
require special technical knowledge or expertise not available locally or for
positions that cannot be filled by local Malaysian citizens.
To
obtain employment passes, expatriates must have a valid passport from their
home country, a contract from their employer, a cover letter and three passport-size
photos, which may be black and white or color.
The
employer of an expatriate must submit an application to the Department of
Immigration and await a decision, which may take one month. After the employer
receives a letter of approval, it must submit the passport of the employee and
pay for the employment pass and the levy. The levy is applicable only to
expatriates earning less than a designated amount per month or to expatriates
holding employment passes valid for less than two years.
Licensed
manufacturing companies that wish to hire expatriates must present copies of
their manufacturing licenses. Service companies with foreign equity of more
than 30% must seek the approval of the Foreign Investment Committee before
hiring expatriates. Companies engaged in construction and project management
must register with the Construction Industry Development Board before hiring
expatriates. Companies engaged in the retail, trade, wholesale and direct-sales
sectors that have foreign equity of more than 30% must seek the approval of the
Committee on Wholesale and Retail Trade before hiring expatriates.
It is
illegal to work without a valid employment pass; therefore, a foreign national
may not work in Malaysia until he or she has received a work permit and all
other necessary documents.
To
obtain an extension, expatriates must submit new applications for extension
three months before the expiration of their passes.
Expatriates
who have not completed their terms of contract but wish to take up employment
with other companies must leave the country for six months before taking up new
employment.
In 2003,
the Malaysian government decided to make it easier for companies to hire
skilled foreigners, allowing for automatic approvals to be granted for the
recruitment of highly skilled workers where there is no available local
expertise.
From
June 2003, the government further relaxed rules on employing expatriates,
granting that manufacturing companies with foreign paid-up capital of at least
US$2m be automatically permitted ten expatriate positions, with those to
include five key posts. Under the amended rules, expatriates could be employed
for up to ten years for executive posts and five years for non-executive posts.
Manufacturing
companies with foreign paid-up capital of US$200,000–2m, meanwhile, were
permitted automatic approval for up to five expatriate posts, including at
least one key post.
Contact
us
If
you have further queries, please contact Tannet
24
hours Malaysia hotline：603-21418908;
24
hours Hong Kong hotline：852-27837818;
24
hours Hong Kong hotline：86-755-
36990589;
Email:
mytannet@gmail.com
TANNET GROUP : http://www.tannet-group.net, http://en.tannet.com.my