Yes. Foreign people and foreign companies can own 100% of a Labuan company. Labuan law has no rule about where a shareholder lives or what passport they hold. No local partner is required, no Bumiputera quota applies, and no shareholder needs to live in Malaysia. One shareholder is enough, and that shareholder can be a person or another company, from any country. A licensed Labuan trust company handles the paperwork, so you never need to travel there.

There is one real rule that always applies: a Labuan company cannot register itself. It must hire a licensed Labuan trust company as its registered agent. The trust company does the due diligence, the filings, and the ongoing reporting to Labuan FSA. Your ownership stays 100% yours. The trust company just handles the admin that connects the company to the regulator.

What the Labuan Companies Act 1990 actually says

The law does not use the phrase "100% foreign ownership". It sets the minimum at one shareholder of any nationality. Both people and companies can hold shares. There is no local-equity rule. That is why 100% foreign ownership is simply the default.

Share capital rules are light. There is no minimum paid-up capital. A company just needs one share on issue. You will see "USD 1 minimum" repeated online. That is a market convention, not a legal rule.

Currency has one quirk. Shares can be in any currency except Malaysian Ringgit. US dollars, euros, Singapore dollars, and Hong Kong dollars are all common. The rule reflects Labuan's role as an international centre. The company is meant to do business outside Malaysia, so its capital is in a foreign currency from day one.

The local roles you cannot skip: resident director and resident secretary

Since June 2022, the Labuan Companies Act 1990 requires every Labuan company to have at least one resident director (section 87(2)) and a resident secretary (section 93). Many owners read "resident" and panic. They think they need a Malaysian citizen living in Labuan. They do not. "Resident" here is a legal role, not a rule about where anyone lives.

The resident secretary must be a trust officer of a licensed Labuan trust company. The resident director can be a trust officer or another qualifying individual, but in practice your trust company provides one of its own officers, already on file with Labuan FSA, to fill both roles. That officer handles the statutory filings and signs where a local signature is required. This is what makes the system work for international clients.

You stay the beneficial owner and you appoint the other directors. A company can run with two directors: the resident director from the trust company, and one chosen by you. Your directors can be of any nationality and do not have to live in Malaysia. The trust company's officer acts under your instructions, not on their own.

So the local-presence rule is light. One trust officer, provided by your trust company, covers both the resident director and resident secretary roles and keeps the company compliant with Labuan FSA, without you needing to move there or put anyone on a local payroll.

What about the beneficial ownership register?

Every Labuan company must keep a Register of Beneficial Owners (ROBO) and tell Labuan FSA who really owns or controls it. This has been the rule since 23 April 2025, when the Labuan Companies (Amendment) Act 2025 added beneficial ownership provisions to the Labuan Companies Act 1990 (Labuan FSA Guidelines on Beneficial Ownership for Labuan Entities).

A "beneficial owner" is the actual person who owns or controls the company. It is always a real human, not another company in the chain. Trust company directors do not count just because they are directors; what counts is real economic control.

The rules are simple to follow:

Here is the important part for foreign owners. The register is not public. Labuan FSA controls who can see it. Information is only shared with the right authorities, such as tax offices or police, and only under formal agreements. This brings Labuan in line with the FATF global standards on beneficial ownership, while still protecting privacy for honest foreign owners.

If you run a Labuan structure, this just adds one job to your compliance function: keep the register correct and file changes on time.

How this compares to a Malaysian Sdn Bhd

A Sendirian Berhad (Sdn Bhd) is a domestic Malaysian company, available throughout the country, including Sabah, Sarawak and Labuan. It is the standard vehicle for doing business inside Malaysia. Foreigners can own 100% of a Sdn Bhd in most sectors too, so on ownership alone the two are similar. The real difference is what each is built for.

A Sdn Bhd is a domestic company: it operates in Ringgit and is taxed at the standard 24% rate. A Labuan company is built for international business outside Malaysia. It can operate in foreign currency and can pay 3% corporate tax under the Labuan Business Activity Tax Act 1990 (LBATA), if you meet the substance rules.

In the cases we see most often, tax is not even the deciding factor. It is the mix of currency flexibility and the fact that a Labuan company is designed for cross-border business from day one.

What a foreign owner actually has to do

The steps are simple. Most of the work happens through the trust company. You supply documents, review drafts, and sign. The trust company deals with the regulator.

Step 1: Hire a licensed Labuan trust company

Only a firm with a Labuan FSA trust licence can register a new Labuan company. The trust company runs your first checks, advises on the right structure, drafts the company's rules, and files the application with Labuan FSA.

Step 2: Send in your documents

For every person who will own or run the company, you need:

For company shareholders, the trust company will ask for:

The exact certification and apostille rules depend on your home country.

Step 3: Sign the company documents

The trust company drafts the Memorandum and Articles. These are the rules that say who owns what, what the company can do, and how it is run. You sign remotely. Documents go back and forth by courier or secure e-signature. You never need to fly to Labuan.

Step 4: Labuan FSA approval

Once the checks are clear, Labuan FSA can approve the new company in as little as 24 hours. Government fees depend on the share capital:

These are the regulator's own fees (Labuan FSA, Incorporation and Registration Procedures). The trust company charges on top for its own service.

In simple cases (one owner, clean documents, no complex chain of companies) the full setup takes one to two weeks. If the structure has several layers of shareholders across several countries, plan for four to six weeks.

What 100% foreign ownership does NOT give you

The phrase "100% foreign ownership" is about who owns the shares. It is not a guarantee of every tax or operational benefit. Three things are worth being honest about.

It does not exempt you from the substance rules. The Labuan economic substance rules have been in force since 1 January 2019, and the minimum for each activity is set out in the substance regulations (summary, EY Malaysia):

If you fail the substance test, the 3% tax rate goes away. The company is then taxed at 24%.

It does not automatically make the company a Malaysian tax resident. The Labuan Business Activity Tax Act 1990 looks at where management and control actually sit. A company run from Singapore, with board meetings and banking decisions taken there, will struggle to claim Malaysian tax residency even with a Labuan licence.

It does not open every tax treaty. Malaysia has many tax treaties, but a few of them carve Labuan offshore companies out. Before you plan around a specific treaty, ask your trust company to check the wording that applies to Labuan. Treaty access is case by case, not automatic.

What about opening a corporate bank account?

Setup is one question. Banking is another, and it is often the real bottleneck. A Labuan company can bank with a Labuan-licensed bank, a Malaysian onshore bank, or a bank in another country. Each route has its own checks.

For foreign-owned Labuan companies, banks apply extra due diligence under Malaysia's anti-money-laundering rules. You will need to submit the same KYC pack the trust company already holds. On top of that, the bank wants a clear picture of what the company will actually do: who the counterparties are, what countries the money flows to and from, expected monthly volume, and where the money comes from. Substance matters too. Banks prefer companies with real operations in Labuan, not empty shells.

Account opening timelines are separate from incorporation. They are usually longer, often two to six weeks, and longer still if online banking access has to be approved on top. Plan the two in parallel, not one after the other.

Signature Trust manages the full bank account opening process on your behalf, from choosing a bank that fits your business profile to coordinating KYC for every signatory.

The bottom line

100% foreign ownership of a Labuan company is the default, not a special favour. The Labuan Companies Act 1990 sets no rule on where shareholders live or what passport they hold. The mandatory resident director and resident secretary are both provided by the trust company's own staff. The real work is the ongoing compliance: the beneficial ownership register, the substance rules, and the regular reporting.

Setting up a Labuan company is simple once the right trust company is in place. Our corporate services team can walk you through the steps or answer specific questions about your situation.

Frequently Asked Questions

Do I need a local director for a Labuan company?

Since 2022, a Labuan company must have at least one resident director under section 87(2) of the Labuan Companies Act 1990, and it must also have a resident secretary. But resident here is a legal role, not a requirement for you to live in Malaysia. Both roles are filled by a trust officer of your licensed Labuan trust company, so you do not need to find anyone locally yourself. Your other directors can be of any nationality.

Can I register a Labuan company remotely?

Yes. Remote setup is standard. The trust company handles the paperwork and files with Labuan FSA for you. You sign documents online or by courier. Once the checks are done, Labuan FSA can approve the new company in as little as 24 hours.

What documents do I need to form a Labuan company?

For each person who owns or runs the company: a certified passport copy, proof of address, a short CV, and proof of where the money comes from. For company shareholders: the certificate of incorporation, the company rules, and a board resolution that approves the investment. The trust company tells you exactly what is needed.

Is a Labuan company treated as Malaysian resident or non-resident?

It depends on where the company is actually run from. If management and control sit in Malaysia, the company is Malaysian tax resident. It can then apply to LHDN for a Certificate of Residence and use most of Malaysia's tax treaties, though a few treaties exclude Labuan offshore companies.