Malaysia (Labuan) or Mauritius: where should your business be based?
Malaysia (Labuan) ranks higher in the index, =03 against 20. Which suits you depends on where the owners live, what the company is for and how it will be run.
Pillar by pillar
Doing business, side by side
Tax
Labuan trading activity is taxed at 3% of chargeable profits, and qualifying non-trading (holding) activity at 0%. Failing the substance tests means 24% for that year. Labuan entities located in Labuan are outside sales and service tax.
Companies pay 15%, with an 80% partial exemption on specified foreign income where substance requirements are met. VAT is charged at 15%.
Set-up
Labuan FSA approves incorporation within 24 hours of complete documents, fee payment and due diligence clearance. The fee is USD 300 to USD 1,500 by paid-up capital, and the annual fee is USD 1,000 from 2026.
The Registrar charges Rs 3,200 to incorporate a Global Business Company and Rs 18,000 a year, plus licence fees. No minimum capital is stated.
On the ground
A licensed Labuan trust company must incorporate the company, and it needs a resident secretary and a registered office in Labuan. To keep the 3% rate it needs fit and proper full-time staff working in Labuan and minimum annual spending there.
A Global Business Company needs at least two resident directors, a secretary and a licensed management company to administer it.
Ownership
Beneficial ownership information is not on a public register. It is held through the Labuan trust company and is available to Labuan FSA and other authorities.
Access to beneficial ownership information is limited to the authorities. The information is not available to the public.
Residence
A Labuan company can sponsor an employment pass for a director or employee paid at least RM10,000 a month, and all pass holders can bring dependants. MM2H is the alternative, from a USD 150,000 deposit and a home worth RM600,000.
The Investor Occupation Permit requires US$100,000 transferred from abroad and a business plan. It is valid for 10 years, and dependants are eligible.
Living and working
Currency
Malaysian ringgit (MYR). Labuan entities are not subject to Malaysian exchange control and can trade in any currency.
Mauritian rupee.
Time zone
UTC+8 all year, with no daylight saving.
UTC+4.
Personal tax
Residents pay progressive rates up to 30% on taxable income above RM2 million, and non-residents pay a flat 30%. Dividends above RM100,000 a year are taxed at 2% from 2025.
Income tax bands of 0%, 10% and 20%, and 35% on income above Rs 12 million a year from 1 July 2026, under the Finance Act 2026. No capital gains, inheritance, gift or wealth tax.
Flights
Kuala Lumpur International Airport serves 143 destinations with 71 airlines, according to Malaysia Airports in 2026. Labuan has its own airport with domestic flights to Kuala Lumpur.
Air Mauritius flies direct to 13 destinations, including London Gatwick (12 hours 40 minutes, five days a week).
Language
English is the language of the Assembly and the Supreme Court; French can also be used in the Intermediate and District Courts.
Malaysia (Labuan) vs Mauritius: common questions
Malaysia (Labuan): Labuan trading activity is taxed at 3% of chargeable profits, and qualifying non-trading (holding) activity at 0%. Failing the substance tests means 24% for that year. Labuan entities located in Labuan are outside sales and service tax. Mauritius: Companies pay 15%, with an 80% partial exemption on specified foreign income where substance requirements are met. VAT is charged at 15%.
Malaysia (Labuan): Labuan FSA approves incorporation within 24 hours of complete documents, fee payment and due diligence clearance. The fee is USD 300 to USD 1,500 by paid-up capital, and the annual fee is USD 1,000 from 2026. Mauritius: The Registrar charges Rs 3,200 to incorporate a Global Business Company and Rs 18,000 a year, plus licence fees. No minimum capital is stated.
Malaysia (Labuan): A licensed Labuan trust company must incorporate the company, and it needs a resident secretary and a registered office in Labuan. To keep the 3% rate it needs fit and proper full-time staff working in Labuan and minimum annual spending there. Mauritius: A Global Business Company needs at least two resident directors, a secretary and a licensed management company to administer it.
Malaysia (Labuan): Beneficial ownership information is not on a public register. It is held through the Labuan trust company and is available to Labuan FSA and other authorities. Mauritius: Access to beneficial ownership information is limited to the authorities. The information is not available to the public.
Malaysia (Labuan): A Labuan company can sponsor an employment pass for a director or employee paid at least RM10,000 a month, and all pass holders can bring dependants. MM2H is the alternative, from a USD 150,000 deposit and a home worth RM600,000. Mauritius: The Investor Occupation Permit requires US$100,000 transferred from abroad and a business plan. It is valid for 10 years, and dependants are eligible.
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