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Labuan Gives Tax Incentives For Oil And Gas Trading

Wednesday, November 2, 2011

At the launch of the Global Incentives for Trading (GIFT) programme and the newly-formed Labuan International Trading Commodity Company (LITC), the Director-General of Labuan Financial Services Authority (FSA) Encik Ahmad Hizzad Baharuddin announced that a range of incentives have been initiated to attract oil and gas traders to Malaysia.

The new scheme will be operated by the LITC out of Labuan International Business and Financial Centre (IBFC), and is intended to diversify further the products and services of Malaysian’s financial services sector.

Ahmad Hizzad said that, over the years, the oil, gas and energy sector has contributed significantly to the growth of the country and now accounts for about 20% of the Malaysia’s gross national product. The government has earmarked the sector as one of the country’s key economic growth areas.

In addition, he pointed out that, “while Malaysia has thriving up-stream activities in the oil and gas sector, more activities could be initiated at the various levels in the business value chain, particularly in the trading of petroleum and its related products. … This offers a huge potential for Malaysia to tap into the oil trading market, as it would not only generate revenue for the country, but would also increase the pool of expertise and talent, and improve the transfer of technology.”

At this initial stage, one of the main objectives of the GIFT programme, Ahmad Hizzad disclosed, is to attract major international oil trading companies, such that they would consider locating part of their operations in Malaysia. In attracting these international companies, the programme offers a set of incentives through the establishment of the LITC.

The key incentives offered through the LICT under the GIFT programme include a flat corporate tax rate of 3% of chargeable income, a 100% exemption on directors fees paid to non-Malaysian directors, and a 50% exemption on gross employment income for non-Malaysian professional traders and managers of LITC companies.

There is also an exemption of stamp duties on documentation for such business activities, a tax exemption on dividends received by or paid from LITC companies, and all of the other fiscal incentives that are attached to operating a Labuan entity.

Ahmad Hizzad also emphasized that the attractiveness of using the Labuan IBFC as a base for oil trading business in Malaysia extends beyond fiscal incentives. The IBFC hosts to over 400 international financial institutions comprising 61 banks, 169 insurance and insurance-related companies, 176 leasing companies, amongst others, and is an ideal location as it provides the oil and gas trading companies with a comprehensive range of financial products and services, both under conventional and Shariah-based principles.

The Labuan FSA, he said, is pleased to note that the banks and insurance companies in Malaysia, including Labuan, are already gearing up towards providing the specialized financial services in their oil trading desks that will needed by the trading companies.

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Offshore Trusts Guide: Introduction

The History of Offshore Trusts
Development of Professional Competence in the Jurisdictions
What Future for the Trust?
The New Age of Transparency
The Swiss Association of Trust Companies
The Society of Trusts and Estates Practitioners

Offshore Trusts Guide: Jurisdictions

Bahamas

Bahamas: Legal Framework and Formation Rules and Fees
Bahamas: 2006 Private Trust Companies Legislation

Barbados

Barbados: Legal Framework and Formation Rules and Fees
Barbados: Supervisory and Licensing Regime and Fees

Bermuda

Bermuda: Legal Framework and Formation Rules and Fees
Bermuda: Supervisory and Licensing Regime and Fees

British Virgin Islands

British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
British Virgin Islands: The Trustee Act 2003
British Virgin Islands: :Supervisory and Licensing Regime and Fees
British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

Cayman Islands

Cayman Islands: Legal Framework and Formation Rules and Fees
Cayman Islands: Supervisory and Licensing Regime and Fees

Cook Islands

Cook Islands: Legal Framework and Formation Rules and Fees
Cook Islands: Supervisory and Licensing Regime and Fees

Cyprus

Cyprus: Legal Framework and Formation Rules and Fees
Cyprus: Supervision, Licensing and Tax

Gibraltar

Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

Guernsey

Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

Isle of Man

Isle of Man: Legal Framework and Formation Rules and Fees
Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
Jersey: Foundations

Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
Liechtenstein: Foundations

Madeira

Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees




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