International-Business-Dr-R-Chandran-E-book

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International Business- Dr. R. Chandran
• To administer and enforce offshore financial services legislation and
work with the offshore players in Labuan to promote offshore financial
services.
The Labuan IOFC operates in a free exchange control environment.
Offshore companies are given a non-resident status for exchange control
status. Offshore companies can continue to transfer funds freely to and from
their accounts outside Malaysia without approval from the central bank of
Malaysia. The foreign currency accounts held with the offshore banks are
not considered as external accounts and are not subject to exchange control
measures. The offshore banks are also allowed to issue financial and nonfinancial
guarantees to residents in Ringgit. They can receive fees and
commissions related to guarantee in Ringgit. The holding requirement of one
year is not applicable to assets in Ringgit held in collateral by the offshore
banks for credit facilities granted to residents. The payments of existing
loans and guarantees in foreign currency by Malaysian residents to the
offshore banks do not require prior approval from the Central Bank.
In Labuan no tax is imposed on the income of offshore companies that
are non-trading companies, and offshore trading companies enjoy a low tax
regime with a rate of only 3% of their net income of RM 20,000 (USD
8000). Other benefits and incentives include:
• No tax on offshore companies carrying out offshore non-trading activities
such as holding of securities, shares, immovable properties and taking of
loans and placing of deposits.
• No withholding tax for dividends paid by an offshore company,
distribution from an offshore trust, royalties received from an offshore
company by a non-resident, interest earned on deposits with offshore
banks, and interest earned on loans to Malaysians.
• No inheritance, death, or estate duty.
• Exemption from paying stamp duty on all offshore business transactions.
• Double tax treaty agreements signed with over 40 other countries and
investment guarantee agreements with 50 countries.
Mauritius
Mauritius is fast becoming an international financial and business centre.
Offshore transactions are normally conducted with non-residents and in
currencies other than the Mauritius Rupee. Mauritius has focused its
offshore business on specific areas such as investment funds, investment
holdings and international trading. The island is becoming an attractive
Only for Private Circulation