纳闽公司银行账户概述

When opening Labuan corporate bank account, which bank should be selected ? However, before that, it is also an important task to “use onshore or offshore“, and “how to use them both properly“.

Since the needs are different for business settlement and investment settlement, we will give advice at the time of incorporation.

Below is a brief description of the general differences between “onshore account” and “offshore account “we consider when open corporate account.


1. Difference between Onshore account and Offshore account

The difference between onshore bank (Kuala Lumpur) and offshore bank (Labuan) is as follows:-

Onshore BankOffshore Bank
Target customersFor local customers
(Malaysian resident)
For global customers
(Malaysian non resident)
Transaction objectDomestic transactions and international transactionsInternational transaction only
Branch counterYesNo
Currency typeMalaysian ringgit and foreign currencyForeign currency only
Payment MethodFace to face or telephone, fax, e-mail, check, internet banking, etc.Telephone, fax, e-mail, check, internet banking, etc.
Transfer feeDomestic → Domestic remittance charge
International → International remittance fee
International remittance fee
Minimum deposit amounttends to be low overalltends to be higher overall
Tax incentivesNot applicableApplicable
Exchange control regulationApplicable (treated as resident)Not applicable (non-resident treated)

2. What is an Onshore account?

Onshore means a country or region where the legal system of the country extends from a country perspective.

Onshore Bank provides services on the premise of services to local people (local customers = residents of Malaysia). Therefore, onshore banks are premised that customers visit the bank’s direct contact and conduct transactions (Actually, Internet banking is often used).

Main applications of onshore accounts are the main currency (Malaysian ringgit denominated) ① “Payment of local employee“, ② “payment of rent of business property“, ③ “payment of water and utility expenses” etc. It is used for onshore transactions (domestic transactions) which settlement in Malaysia domestically.

Furthermore, since it is possible to open a foreign currency account in addition to the local currency in the onshore account, it can be used as an offshore transaction (international transaction) with foreign countries. Since most banks are compatible with Internet banking, it is possible to move money quickly.

As an attention point of onshore account, the following are listed:-

 

Note
  • Basically, ATM cards are not issued to corporate accounts in Malaysia (There are banks issuing credit cards, but in actually they should be used as debit cards with a maximum deposit amount It will be).
  • If you use an onshore account, Labuan company will be treated as a resident on exchange control, so a large remittance will be limited.
  • If an individual or a company residing in a country or region where Malaysia has a tax treaty enters investigation such as tax evasion, the information exchange agreement may disclose transaction information from the Malaysian authorities.

3. What is an Offshore account?

Offshore means the country or region where the legal system of the country does not extend from a certain country.

Offshore banks are subject to services for individuals and corporations residing in countries around the world (global customers = nonresidents in Malaysia).  As a business type is close to the Internet bank, customers can manage accounts by phone or the internet, basically customer do not have to visit bank. All applications are made through a Labuan Trust Company (Actually Labuan ‘s offshore bank does not have a counter).

In offshore banking, services can be used only by mailing, communication, such as telephone, fax, and Internet. There is no need to go to the site in account management (as seen from Malaysia) that it is possible to open an account without going to Labuan (* Not all banks have provided Internet bank, there are some banks dealing only with telephone and e-mail, or check settlement).

The primary use of offshore accounts is “for settlement of international transactions denominated in foreign currencies (excluding domestic Malaysia)” (※ Malaysia Ringgit denominated accounts can not be opened at Labuan Offshore Bank account).

For example, if importing goods from China and exporting goods to Singapore, ① “Pay with Chinese Yuan (foreign currency)” to the import source, ② “Singapore dollar (foreign currency) from the export source” “In this case, transactions in Malaysia are not being done (In other words, this transaction is outside to outside).

As an attention point of offshore account, the following are listed:-

 

Note
  • If Labuan’s offshore account is transferred to Malaysia’s onshore account, it will be treated as overseas remittance. Therefore, kindly note that overseas remittance fee (around 30USD ~ / times) will be applied for each transfer of fund when using offshore account.
  • There are many banks can send fund remittance by overseas remittance with Internet banking, but overseas remittances are different from transfer processing by electronic transaction like domestic remittance. For general domestic Internet banking, remittance will be completed within a few seconds to a few minutes after the transfer process is completed, but because overseas remittances are handled manually by offshore bankers, it takes some time for fund transfers.
  • As offshore accounts are prohibited from dealing with Malaysian ringgit, only foreign currency accounts such as US Dollar, Euro, British Pound, Japanese Yen can be opened. Therefore, when remittance to Malaysia domestic is frequent, the remittance charge is much higher than domestic transfer (In other words, it is not suitable for domestic transactions).
  • To prevent money laundering, banks do not issue ATM cards in offshore account for the majority. The reason is said to have been an act of withdrawing cash at home country ATM after depositing in an offshore account. Kindly consider it is almost impossible to issue ATM cards and credit cards by opening a Labuan offshore account.
  • Almost banks provide services to customers who already conduct transactions in onshore accounts to open offshore accounts. Basically it is very difficult to open an account right after registering a corporation.

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