Latest Information

About Labuan Business Activity Tax (Requirements For Labuan Business Activity) Regulations 2018 (Amendment) Regulations 2020

Dear Valued Clients,

Good day, this is Bona Trust support team.

Based on the latest P.U.A (375) dated 24 December, 2020 on Labuan Business Activity Tax (Requirements for Labuan Business Activity) Regulations 2018 (Amendment) Regulations 2020 (“the Amendment Regulations”), other trading activities under Code 23 of List of Codes and Types of Business Activity are not listed as part of the Amendment Regulations.

As such, Labuan Entity carrying other trading activities will not be deemed as Labuan Business Activity and will be subjected to tax under Income Tax Act 1967 (ITA) for year of assessment 2021 irrespective whether they comply with the Economic Substance Requirements or not.

However, the Association of Labuan Trust Companies together with the Labuan Corporation, the municipal government have sent an appeal to Ministry of Finance (“MoF”) to re-instate the business of general trading, provision of services and other non-listed activities to be taxed under Labuan Business Activity Tax Act 1990 (LBATA).

As of now, we are yet to receive any updates on the appeal submitted to MoF therefore, a Labuan Entity conducting other trading activities are not listed in the Amendment Regulations will remain status quo at this present moment. We will continue to update you when information becomes available.

While waiting on the appeal status, please do not hesitate to contact us if you wish to explore other alternative solutions; or if your Labuan Entity is carrying out any of the 22 types of business activity listed under the Amendment Regulations and you require assistance or guidance to meet the requirements.

Thank you.

Best Regards,
Support Team

* P.U.A is gazetted order. PU order is a piece of subsidiary legislation that has passed through parliament and has the force of law. PU stands for “Pemberitahu Undangan” or “Legal Notification”.

New Year’s holiday schedule 2020/2021

Dear Valued Clients,

Thank you for your continued business.

Our New Year’s holiday schedule 2020/2021 are as follows:-

Dec. 26, 2020Dec. 27, 2020Dec. 28, 2020Dec. 29, 2020Dec. 30, 2020Dec. 31, 2020Jan. 1, 2021Jan. 2, 2021Jan. 3, 2021Jan. 4, 2021Jan. 5, 2021
ClosedClosed11:00

18:00

11:00

15:00

ClosedClosedClosedClosedClosed11:00

15:00

11:00

18:00

[Requests from existing clients]

For clients who have already used our service and have received payment confirmation, we will respond until the last business day of the year 2019. December 30 (Wednesday) is the last business day for banking and administrative relations, and the beginning of the year 2021 is informed that it will start business from January 4 (Monday).

[Requests from new clients]

Inquiries from new clients will be handled sequentially, but in order to respond to existing customers with priority, it may take some time to reply.

In addition, the case that needs to be processed by the end of this year 2020 was held on Dec. 15 (Tuesday), and new applications were suspended. You can consult with us and accept new requests, but kindly note that in principle it will be handled after next year 2021.

***

For clients who contact us via the inquiry form on the website during the year-end and New Year holidays, we will respond to you as soon as the new year’s business resumes.

December is already entered in mid-term, and this year is about to end. This year 2020 was a year with so many accidents and events due to the influence of the coronavirus (COVID-19) that has involved the world since the New Year.

Thank you for your understanding and continued warm support in 2021.

Best Regards,
Support Team

Important notice regarding change of work permit obtain and renewal rules

Dear Valued Clients,

We will inform all clients from Bona Trust support team.
Currently, the Labuan Immigration has made the following visa-related rule changes: –

1. Currently, the Immigration does not accept translations from third parties, only ITMB translations.

The ITBM translation service is available from the following sites.
https://www.itbm.com.my/en/servis/terjemahan

2. The translated educational certificate and family register must be certified by the Embassy of the country in which you have nationality.

Clients who are currently receiving new work permit applications and renewal approval notices from us should bring your educational certificate and the original copy of your family register to the Embassy of the country in which you have nationality.
https://en.wikipedia.org/wiki/List_of_embassies_in_Kuala_Lumpur

∟ 2-1. Certificate of Education
Must be the original English certificate from the school seal stamped on it. The embassy will certify.

∟ 2-2. Family register original copy (For Dependent Pass)
The English translation of the family register must be the original and the English-translated documents requested by ITMB. The embassy will certify.

3. The passport-sized ID photo used for the visa sticker must have a blue background (currently, white background photos are not available).

Previously, visa stickers were only valid for photos with a white background, but now only those with a blue background are valid.

***

If you do not meet the above document requirements, you will not be able to renew or obtain work permit, so kindly prepare in advance before you visit Labuan.

Thank you.
Support Team

To the clients who goes to Labuan during the RMCO period

Dear Valued Clients,

Today, Federal Malaysia has relaxed the MCO (Movement Restriction) from June 10, is currently implementing the RMCO (Recovery Movement Control Order).

As a result, you are allowed to move across states and federal territories, but is required to be quarantined for 2 weeks at your destination home or hotel.

[Ex: When traveling from Kuala Lumpur to Labuan]

1. Arrived at Labuan Airport

2. Download MySejahtera Apps to your phone
iPhone: https://apps.apple.com/my/app/mysejahtera/id1504055630
Android: https://play.google.com/store/apps/details?id=my.gov.onegovappstore.mysejahtera&hl=en

3. Perform PCR test, and quarantined at home or hotel until the result is judged (about 6-7 days)

〇 If Negative

Then, release quarantine measures (The staff will go to the hotel to collect the PCR application documents, so kindly hand over them. After that, the Ministry of Health permits the exemption of Quarantine, then you can go out)

✖ If Positive

If subjective symptom, then to hospital
If no subjective symptom, then to 2 weeks quarantine

MCO LABUAN

【Original (Bahasa Melayu)】

MCO LABUAN

Those who have been judged as negative will be released from the obligation to quarantine and will be able to obtain or renew your Labuan Work Permit. However, once you return to Kuala Lumpur (or West Malaysia), you will be subject to 2 weeks quarantine obligation again.

*If you violate it, you will be subject to a fine of RM1,000 or a lawsuit, so kndly be careful in your actions.

For details, please refer to “Regulations based on the Infectious Disease Prevention and Control Act” published by the Ministry of Health, Malaysia (Written in Bahasa Melayu).

***

[When traveling from overseas to Malaysia]

Clients currently staying outside Malaysia are required to enter the Federal Malaysia through the following procedure: –

For details, please refer to the website below and contact the relevant authorities in your country of staying.

https://esd.imi.gov.my/portal/latest-news/announcement/myxpats-rmco-sop/

Thank you.

Best Regards,
Support Team

[Very Important Notice] To the clients whose Labuan Work Permit have expired during the MCO period

Dear Valued Clients,

The Malaysian Immigration Bureau has announced some procedures for restarting some services after May 4, overstay before and after the Movement Control Order (MCO), and procedures for expiring residence permit (announced on May 2 * last updated on May 6).

The main points are as follows: –

1. Overstay between January 1, 2020 and 14 business days after the end of the MCO:

-> If you have return flight ticket to your home country, you will not need to be listed on the blacklist or charged a fine, and you will need to extend your stay for a special pass. You can leave Malaysia without applying for a pass to apply if it occurs. If you do not leave within 14 business days after the end of the MCO, you need to consult with the embassy of your country concerned and obtain documents proving the justification for not being able to leave the country. If that is not possible, legal action will be taken and blacklisted.

2. If the residence permit (pass) expires after February 1, 2020:

-> You can apply for a residence permit at each immigration office within 30 days after the end of the MCO period.

* Kindly Note : If you are currently stay in Malaysia and your Work Permit or Dependent Pass has expired during the MCO period, please visit Labuan Immigration Bureau within 30 days counted after MCO to apply for your Visa.

Currently, all flights between Kuala Lumpur and Labuan are out of service. It is expected to resume in mid-May, but if you cannot visit Labuan within 30 days for this physical reason, Bona Trust Corporation will issue a letter stating the reason and proceed with the procedure.

***

Thank you.

Support Team

Click to access 100052227.pdf

[Important Notice] To clients who are due to renew Labuan work permit during MCO

Dear valued Clients,

As we all know, the Federal Malaysia has been lockdown on March 18 at AM0:00 and Movement Restriction Order (MCO) has been enforced.

The MCO was expected to end by April 14, however the deadline was extended by another 2 weeks, and the regulation will be applied until April 28.

 

Special Pass MCO

Now, there are a few clients whose work permit have expired in the MCO, and we investigated the measures.

At this time, there is no instruction from the Labuan Immigration Department regarding practical procedures, but the Malaysian Immigration Department’s view is as follows.

In view of current situation, all foreigners in Malaysia whose pass has expired During this period only may leave malaysia without any special pass provided they possess a valid passport.

The following are Frequently asked questions and answers from Malaysian Immigration Bureau officially, kindly refer to it: –

Kindly Note: The following contents are information for expatriates. If you have any questions regarding Labuan Work Permit or Dependent Pass, please contact your Company Secretary Service Provider (Labuan trust company).

Click to access EP_PVP.pdf

All applicable clients will be dealt with case by case in consultation with Labuan Immigration Department.

Kindly Stay at home and Stay safe, thank you.

Best Regards,
Support Team

Notice Regarding Extension of Filing Deadline for Labuan Corporate Tax (LBATA 1990) and Personal Income Tax

Dear Valued Clients,

As the title mentioned above, the filing deadlines for Labuan corporate tax (LBATA 1990) and personal income tax have been extended.

Kindly see below for details: –


  • About Labuan corporate tax (LBATA 1990)

Inland Revenue Board of Malaysia (IRBM) Labuan branch, agree to grant an extension of time as follows;

TIME EXTENSION UNTIL:CONDITIONSREMARKS
29/07/2020

Automatic Extension

Trust Companies are compulsory to submit 60% of their client’s tax return regardless they are carrying on Labuan Trading business activity or Labuan non-trading business activity or dormant companies.
  • Only applicable for Labuan Entity that has no tax outstanding including compound and tax increment.
  • Tax return is up to date till year assessment 2019.
28/10/2020

Upon Application

The remaining balance of 40% must be applied straight to 28/10/2020 (one time application) and must be submitted before or up to 15/07/2020.
  • Only applicable for Labuan Entity that has no tax outstanding including compound and tax increment.
  • Tax return is up to date till year assessment 2019.
Note:

  • There is no extension of time beyond 28/10/2020.
  • The above content is a notice of postponement notified by the IRBM to Labuan trust companies that controls the entities (Issued on Feb. 2020).
  • Practical operations are targeted for completion by May, 2020.[*1]

* Bona Trust Corporation includes a tax agent’s commission in our secretary’s fees. We will do the tax work on your behalf. For details, we will notify all our clients by e-mail by the deadline.


  • About Personal TAX

Kindly see the table below for details;

(Ref: Inland Revenue Board Malaysia “RETURN FORM (RF) FILING PROGRAMME FOR THE YEAR 2020“)

* To Human Resources & Administration personnel, kindly refer to the hyperlink above to check the tax payment method.

(Ref:Rules concerning Director Salary and Director fee“)

(Ref:Payment method for personal income tax“)

* We provide HR and Administration services. Please consider this service on your behalf to reduce your own work load.

(Ref:Accounting and Administration service“)


  • Other important notices for Lockdown against COVID-19

In Malaysia, the MCO (Movement Control Order) has been implemented for 2 weeks from March 18 to March 31, with restrictions imposed on land closures (Lockdown) and going out restrictions.

Today, 2 weeks MCO has been extended, and the border has been closed until April 28.

Kindly note the following: –

・ For those who is planning to travel to Malaysia: Please change the schedule after April 14. Currently, the border has been locked down and entry is prohibited.

・ For those who is  staying in Malaysia: Please do not go out until April 14. If you need to obtain or renew your Work Permit or Dependent Pass, please change the schedule after April 15 and contact us.

(Ref:[Urgent] Malaysian government has decided to implement the Movement Control Order“) posted on March 16

(Ref:[Urgent] Reminders regarding stricter MCO execution“) posted on March 21

Thank you.

Support Team

* Kindly check the status of Coronavirus infection in Malaysia from “https://www.outbreak.my/“. and “Infection map“.

[Urgent] Reminders regarding stricter MCO execution

Dear Valued Clients,

As we all know, the Federal Malaysia has been lockdown on March 18 at AM0:00 and Movement Restriction Order has been enforced.

Also, residents in all federal territories are required to stay at home for 2 weeks in principle.

(Mid Valley Mega Mall has become like a ghost town – one of the largest shopping malls in Asia, March 20 at 20:30)

However, some people in Malaysia are not fully compliant with movement restrictions.

Under such circumstances, Abdul Hamid Bador, Malaysian Inspector General of Police (IGP), announced that only about 60% of Malaysians comply with this restrictions.

As a countermeasure above, the government has deployed more than 8,600 policemen and 504 obstacles nationwide to ensure compliance with movement restrictions.

More personnel will be deployed during the movement Control period through March 31.

 

The Malaysian government will start deploying the army to help enforce the Restriction of Movement Order on Sunday, March 22.

Malaysia will deploy the Army to support police in enforcing tough restrictions to halt the spread of the COVID-19, Defence Minister Ismail Sabri Yaakob said on Friday.

The country reported 130 new cases on Friday, taking its toll to 1,030, the highest standard for any Southeast Asian country.

If the situation worsens, the police force would put a heavier emphasis and start detaining people who are not adhering to the Restriction of Movement Order.

Currently, if citizens are found to not adhere to the Restriction of Movement Order, they can be “jailed for up to 6 months“, fined “RM1,000 (US$226)“, or both.

Police have already found a Malaysian man in his 30s attending a mosque rally. He has been arrested for violated Movement Control Order. The man is arrested under Section 186 of the Penal Code for obstructing a public servant in discharge of his public functions, which carries a maximum 2 years’ jail or a fine up to RM10,000 or both upon conviction.

Although defined as “citizens” in government announcement, we also warn our clients to refrain from going unnecessarily and urgently because foreigner may also be eligible.

Thank you.

Support Team

For details on MCO (Movement Control Order), see “[Urgent] Malaysian government has decided to implement the Movement Control Order“.

* Currently in lockdown situation in Malaysia, but 55 Malaysians in Iran and 94 in Italy will be flown home on special mission flights (Government chartered flight) on March 22 and 23 at Kuala Lumpur International Airport respectively. We must strive to prevent the spread of infections within the territory by strictly not going out from home.

* Kindly check the status of Coronavirus infection in Malaysia from “https://www.outbreak.my/“. and “Infection map“.

[Urgent] Malaysian government has decided to implement the Movement Control Order

Dear Valued Clients,

Today March 16, 2020, Mr. Muhidin – the Prime Minister of the Federal Malaysia -, announced in a television speech that travel restrictions would be imposed across the country for about 2 weeks from March 18 to March 31 to prevent the spread of the new coronavirus (COVID-19).

This is the Lockdown.

To this end, the Government has decided to implement the Movement Control Order, from March 18, 2020, the day after March 31, 2020, throughout the country. This control order is made under the Prevention and Control of Infectious Diseases Act 1988 and the Police Act 1967.

* Updated on March 25: A 2-week extension has been decided until April 14.

* Updated on April 10: It will be extended for another 2 weeks until April 28th.

This Movement Control Order includes;

First, the general prohibition of mass movements and gatherings across the country including religious, sports, social and cultural activities. To enforce this prohibition, all houses of worship and business premises must be closed except for supermarkets, public markets, convenience stores and convenience stores selling everyday necessities. Specifically for Muslims, the adjournment of all religious activities in mosques and mosques including Friday prayers is in line with the decision of the Special Mental Health Committee meeting on March 15, 2020.

Secondly, the sanctions cover all Malaysians traveling abroad. For those who have just returned from overseas, they are required to undergo a health check and to do a quarantine (or self quarantine) for 14 days;

Third, restrictions on the entry of all tourists and foreign visitors into the country;

Fourth, closure of all kindergartens, government and private schools including daily schools, boarding schools, international schools, tahfiz centers and other primary, secondary and pre-university institutions;

Fifth, the closure of all public and private higher education institutions (IPTs) and skills training institutes nationwide; and

Sixth, the closure of all government and private premises except those involved in essential services (water, electricity, energy, telecommunications, postal, transportation, irrigation, oil, gas, fuel, lubricants, broadcasting, finance, banking, health, pharmacy, fire, prison, port, airport, safety, defense, cleaning, retail and food supply.

 

During this period, all business establishments will be required to close, except for supermarkets (food / pharmacy) and government agencies (hospitals / fire departments / others). Therefore, all residents of the Federal Malaysia (including Foreigner) will have to stay at home for 2 weeks in principle.

Prior to this, the restaurant will be closed, so kindly purchase the food, beverages and other household items you need for your living by tomorrow 17th, and be ready to stay at home.

In addition, all of our business will communicate by e-mail, Skype, Zoom, etc., and all in-person consultations will be canceled until 31st.

For prospective travelers to the Federal Malaysia, such as flight status and hotel stays, kindly check the government official information.

This is announced as urgent information, thank you.

Best Regards,
Support Team

* Updated on March 20 “[Urgent] Reminders regarding stricter MCO execution

* Kindly check the status of Coronavirus infection in Malaysia from “https://www.outbreak.my/“. and “Infection map“.

* There is already a shortage of goods in supermarkets due to buying up, kindly act calmly.

Latest Pronouncement issued by the LFSA – LIC Pronouncement 2019

Dear Valued Clients,

Good day, this is Bona Trust Support team.

The Labuan Financial Services Authority (LFSA) has issued clarification on certain issues.

However, there remains one main issue that has not been sufficiently clarified.

* For further details, we send email urgently to all clients tonight.

* LIC = Labuan Investment Committee (which consist of the officer from IRB, MOF and LFSA)
* LBATA = Labuan Business Activity Tax Act 1990

We have summarised the LFSA’s latest pronouncement in the table below: –

Latest Pronouncement issued by the LFSA – LIC Pronouncement 2019

No.EntitySubstantive requirementsWhat it means?
1Pure equity holding companyRequired to comply with:

  • Management and control requirements; and
  • Minimum operating expenditure
A pure equity holding company is required to satisfy the following substance requirements, in order to be under the ambit of LBATA:

1. Management and control exercised in Labuan

Management and control are not defined in the Act but it generally refers to the place where the meetings of the board of directors or equivalent body are held.

2. Minimum operating expenditure in Labuan

We were made to understand that the minimum operating expenditure shall be RM20,000

 

2Non-pure equity holding companyRequired to comply with:

  • Minimum operating expenditure; and
  • Minimum full-time employees
A non-equity holding company is required to satisfy the following substance requirements, in order to be under the ambit of LBATA:

1. Minimum operating expenditure in Labuan

The minimum operating expenditure shall be RM50,000

2. Minimum full-time employees in Labuan

Required to have at least 2 headcounts, 1 is of managerial capacity and 1 in clerical position

3Entities that are:

  • Dormant;
  • Struck off;
  • Winding up; or
  • Under liquidation
NOT required to comply with the substance requirements if the entity is NOT deriving any source of income; and

EXEMPTED from audit requirements

No requirement to appoint auditor

No requirement to comply with substance requirements

4
  • Captive insurer
  • Re-insurer
  • Re-takaful operators
  • Insurance brokers
  • Leasing company

 

LFSA has agreed to moderating the substantial requirementsThe substance requirements for these categories of Labuan entities will be reduced. However, there were no indicative numbers provided and a separate circulars will be issued by LFSA
5Non-compliance to substance requirementsAny Labuan entities that DO NOT meet the substantial activity requirement would be subject to tax at 24% under the LBATA.A Labuan entity would be taxed at 24% albeit under LBATA and not ITA.

Kindly note: –

  • Pure equity and non-pure equity holding company were not defined in LIC’s pronouncement but both terms should mirror OECD’s definition.
  • Referring to no. 1(b) of the table, LIC’s pronouncement had not indicated the minimum annual OPEX (of RM20,000) for pure equity holding companies. The changes to the substance requirements in the pronouncement is expected to be gazetted soon and the minimum annual OPEX should be stated in the gazette.
  • There was no specific mention as to whether trading companies would qualify for Labuan’s 3% tax if they meet the substance requirements. It is also unclear what are the substance requirements for trading companies, although LFSA had indicated in their recent yearly dialogue with our industry that all Labuan entities, with the exception of pure equity holding companies, should meet the minimum OPEX of RM50,000 and minimum full-time employee of two for now.
  • The pronouncement states that, “Any Labuan entities that do not meet the substantial activity requirement would result in them being subjected to a higher tax rate of 24% under LBATA.” The term, “Labuan entities,”  under section 2B and as specified under the Schedule of LBATA include all types of Labuan entities. The Schedule does not distinguish between trading and non-trading entities.

Despite the latest pronouncement, there are still some uncertainties relating to the substance requirements. However, given the pronouncements and gazettes issued thus far, perhaps the best approach for now is for you to consider the impact or consequence of not complying with the substance rules already in existence.

We will notify all clients as soon as we have the update information.

***

Additional note 1: –

2.【Kuwait Finance House business closing soon

Our clients who currently have a KFH account must transfer all balances to other corporate accounts by December 26, 2019. This is a very important and urgent task (if you don’t have multiple accounts, let’s escape to a personal account of a shareholder or director for the time being, there is no choice).

Although this matter is important and urgent, it is most important to clear this requirement, so we define this matter as Priority B.

We have already been sent email notifications to the target client, but it may be too late to courier instructions from now on. Kindly complete the fund transfer yourself immediately.

When transferring funds, set the fee burden to “OUR” and transfer the total amount minus 30.00 USD to another account.

***

Additional note 2: –

3.【First time audit with a deadline of March 2020

In March 2020, audits are mandatory for all active entities (including corporations). The auditor has already negotiated and will notify all clients in January 2020. For convenience, this priority is lowered to C.

Thank you.

Best Regards,
Support Team