Labuan is strategically
located within an International shipping and air route between the Indian
and the Pacific ocean. It lies only 1,100 kilometers to Singapore which
has one of the busiest seaports in the world.
Besides its strategic location and easy accessibility, Labuan has a business-friendly
local authority. Government dealings and matters relating to the licensing
and approvals are quick and efficient. The strong federal government support
to the island provides an added competitive edge to local industries and
Labuan's other plus factors include modern healthcare, pre-school to university
education, excellent housing, exquisite restaurants, active nightlife,
traffic free roads, duty free shopping, state-of-the art satellite telecommunication,
abundant water and electricity supply, an international offshore financial
centre (IOFC) and an educated English-speaking labour force.
Its beautiful beaches, secluded islands and unlimited adventure for sport
fishing, kayaking and wrecks diving are well suited for today's busy executive
looking for a stress free lifestyle.
Labuan offers plenty of business and investment opportunities particularly
in oil and gas, manufacturing, trading, tourism, cargo handling and bunkering,
deep sea fishing, offshore finance and education.
Already, many multi-nationals operating in Asia Pacific are realising
the strategic fit to re-locate their regional offices in Labuan. The tax
benefit offered by Labuan's low tax jurisdiction and the saving on lower
financing costs are major considerations. Companies which set up their
bases in Labuan are benefitting in terms of better bottom line. The prospects
of such benefits and advantages make Labuan an important consideration
to corporate Asia in the new millennium.
Government welcomes foreign investment in major sectors of the Labuan
economy particularly in oil and gas, shipping, manufacturing, trading,
tourism, property and education. There are plenty of incentives and other
facilities accorded to these sectors. Some of them are presented as follows:
incentives for companies in the manufacturing sector are the Pioneer status
or investment tax allowance.
A company granted Pioneer Status will enjoy partial exemption from the
payment of income tax. It will only have to pay tax on 30% of its statutory
income. The period of tax exemption is five years, commencing from the
production date as determined by the Minister of International Trade and
Investment Tax Allowance
As an alternative to
Pioneer Status, a company may apply for investment Tax Allowance. A company
granted Investment Tax Allowance will be given an allowance of 60% in
respect of qualifying capital expenditure incurred within five years from
the date on which the first qualifying capital expenditure is incurred.
The allowance can be utilised to offset against 70% of the statutory income
in the year of assessment.
High Technology Industries
companies are defined as companies engaged in promoted activities or in
the production of promoted products in areas of new and emerging technologies.
They are eligible for the following incentives:
a. Pioneer Status with full tax exemption at statutory income level for
a period of five years; or
b. Investment Tax Allowance of 60% on qualifying capital expenditure incurred
within a period of five years. The allowance can be offset against the
statutory income for each assessment year without any restriction.
For Acquiring Proprietary Rights
incurred on acquiring patents, designs, models, plans, trade marks or
brands and other similar rights from foreigners is allowed as deduction
in the computation of income tax if the right is used without involving
the transfer of ownership and results in payment of royalty. This deduction
is given in the form of depreciation for 10 years.