Bank account opening for Labuan Offshore Company
Once a Labuan Company is incorporated, it is customary for the owner to initiate the corporate bank account opening. It is permissible for a Labuan offshore Company to open an offshore and/or onshore bank accounts. While the onshore bank accounts will directly be linked to the Central bank of Malaysia, an offshore bank is a different matter entirely as it depends on which offshore banks was chosen and the services suitable for offshore investors.
It may be quite straight forward for a Labuan Company to initiate an onshore bank account opening but things can be a tad complex and complicated if they wish to also open an offshore bank account.
It is not mandatory for the directors to travel to Labuan to be physically present during the bank account opening but, it is highly advisable to do so. This is to ensure the bank account opening process is smooth and the directors can have the complete information about the bank as well as the officer in charge on his case.
The documents required to initiate the bank account opening are:
Bank’s forms which normally requires the stakeholder personal information
Certified copy of passport /NRIC of stakeholder
Certified residential proof of address of stakeholders
Foreign bank recommendation commonly provided by the banker from stakeholder home country
Business plan which also includes the financial projection for the Labuan Company
Certified proof of documents showing sources of the funds injected in the Labuan Company
Note: Banker is liable to request a set of tax information regarding the tax status or residentship of the Labuan Company
Some considerations before initiating a bank account opening in Labuan
The tax regulation in Labuan may have come in handy for bank transactions especially for business related transactions. No withholding tax are applied on interest paid by Labuan Companies to residents and non-resident Companies and no withholding tax applied on interest payments made by Malaysian tax residents to entities registered in Labuan. The accounts are maintained under Labuan Financial Services and Securities Act.
However, the banking tariffs, conditions as well as services offered will greatly differ between the banks available in Labuan. For example, Labuan account holders are expected to be charged for transfers between accounts opened with the same banks.
Bankers are also allowed to set forth their own internal regulations that account holders are required to comply with. For example, the mandate used for opening a first Labuan corporate account are allowed to also apply other accounts after it is opened. Any changes of signatories must be duly notified by the bankers within a certain amount of time (normally within 30 days of change).
Lastly, Labuan banks also have the rights to suspend or close an account they deem the transactions occur are doubtful. They normally will issue a two weeks’ notice to the customers.