Malaysia (Labuan) or Singapore: where should your business be based?
Malaysia (Labuan) ranks higher in the index, =03 against 05. 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.
For its first three years of assessment a new company pays no tax on 75% of the first S$100,000 of income and 50% of the next S$100,000. Goods and services tax is charged at 9%.
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.
Registration costs S$315 in total and is usually approved within 15 minutes of payment. Share capital can be S$1, and the annual return costs S$60.
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.
At least one director must be ordinarily resident in Singapore, and the company must appoint a company secretary within six months.
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.
ACRA's central register of controllers is available only to law enforcement agencies, and members of the public cannot access it.
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 EntrePass is open to an applicant holding at least 30% of a venture-backed or innovative company, who must also meet one of five further criteria.
Living and working
Currency
Malaysian ringgit (MYR). Labuan entities are not subject to Malaysian exchange control and can trade in any currency.
Singapore dollar.
Time zone
UTC+8 all year, with no daylight saving.
UTC+8.
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.
Estate duty does not apply to deaths on or after 15 February 2008.
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.
Changi connects Singapore to over 170 cities (January 2026); Singapore Airlines takes about 13 hrs 45 mins to 14 hrs to London and 18 hrs 25 mins to New York.
Language
English, Malay, Mandarin and Tamil are official languages, and all court proceedings are conducted in English.
Malaysia (Labuan) vs Singapore: 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. Singapore: For its first three years of assessment a new company pays no tax on 75% of the first S$100,000 of income and 50% of the next S$100,000. Goods and services tax is charged at 9%.
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. Singapore: Registration costs S$315 in total and is usually approved within 15 minutes of payment. Share capital can be S$1, and the annual return costs S$60.
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. Singapore: At least one director must be ordinarily resident in Singapore, and the company must appoint a company secretary within six months.
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. Singapore: ACRA's central register of controllers is available only to law enforcement agencies, and members of the public cannot access it.
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. Singapore: The EntrePass is open to an applicant holding at least 30% of a venture-backed or innovative company, who must also meet one of five further criteria.
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