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Malaysia: Substantial activity requirements, Labuan economic zone

Malaysia: Substantial activity requirements

The Labuan Financial Services Authority—the statutory body responsible for the development and administration of the Labuan International Business and Financial Centre (a special economic zone)—issued a circular (dated 29 April 2020) setting out revisions to the “substantial activity requirements” for eligibility as a Labuan international commodity trading company.


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Labuan entities are allowed special tax benefits, and to be eligible, must comply with certain requirements (e.g., management and control).

The revisions in the circular are effective retroactively from 1 January 2019, subject to publication of these amendments in the official gazette and concerning the Labuan Business Activity Tax (Requirements for Labuan Business Activity) Regulations 2018.

Read a May 2020 report prepared by the KPMG member firm in Malaysia

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