Labuan Companies (Amendment) Act 2022

Subsection 4(b) is deemed to have come into operation on 1 January 2019.

by substituting for the words “shall be guilty of an offence against this Act” wherever appearing the words “commits an offence under this Act”; and

in the English language text, by substituting for the words “shall be guilty of an offence under this Act”

wherever appearing the words “commits an offence under this Act”.

Amendment of section 2

in the definition of “domestic company”, by substituting for the words “Companies Act 1965 [Act 125]” the words

“Companies Act 2016 [Act 777]”;

in the English language text, in the definition of

“foreign offshore company”, by substituting for the words

‘ “foreign offshore company” ’ the words ‘ “foreign

Labuan company” ’; and

in the definition of “resident”, by substituting for the words “pursuant to section 43 of the Exchange

Control Act 1953 [Act 17]” the words “pursuant to paragraph 214(6)(a) of the Financial Services

Act 2013 [Act 758] and paragraph 225(6)(a) of the

Islamic Financial Services Act 2013 [Act 759]”.

Amendment of section 7

in subsection (3)—

by substituting for the words “Division 5 of

Part IV of the Companies Act 1965” the words

“the relevant provisions of the Interest Schemes

Act 2016 [Act 778]”; and

by deleting subsections (4), (5) and (6).

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in subsection (1), by inserting after the words

“Subject to such conditions” the words “and payment of the prescribed fee”; and

by inserting after subsection (4) the following subsection:

“(4a)  If default is made in complying with this section, the person who is in default commits an offence under this Act.

Penalty: Fifty thousand ringgit or imprisonment for a term not exceeding three years or both.”.

Amendment of section 13

in subparagraph (a)(i), by substituting for the word “six”

the word “seven”;

in subparagraph (a)(iii), by substituting for the word

“fifteen” the word “seven”; and

in paragraph (b), by substituting for the words

“fifteen years” the words “seven years and six months”.

issue a bearer share or bearer share warrants;

convert a share into a bearer share or bearer share warrants into share warrants; or

exchange a share for a bearer share.

Any purported issuance, conversion or exchange of such bearer share, bearer share warrants, share or share warrants under subsection (1) is void.

A provision in a Labuan company’s memorandum or articles which purports to enable the company to issue, convert or exchange any of the bearer share, bearer share warrants, share or share warrants is void.

This section shall apply to a foreign Labuan company.

If default is made in complying with this section, the Labuan company, foreign Labuan company and every officer of the company who is in default commits an offence under this Act.”.

Amendment of section 53

by inserting after subsection (9b) the following subsection:

“(9ba)  If default is made in complying with subsection (9b), the director of the Labuan company who is in default commits an offence under this Act.

Penalty: Fifty thousand ringgit or imprisonment for a term not exceeding three years or both.”; and

in subsection (10), by substituting for the words

“Imprisonment for three years or ten thousand ringgit or both” the words “Three million ringgit or imprisonment for a term not exceeding five years or both.”.

in subsection (3c), by inserting after the words “certified copy of the solvency declaration” the words “and notice of such redemption of share in the prescribed form”;

and

by inserting after subsection (3c) the following subsection:

“(4)  If default is made in complying with subsection (3c), the director of the Labuan company who is in default commits an offence under this Act.

Penalty: Fifty thousand ringgit or imprisonment for a term not exceeding three years or both.”.

Labuan Companies (Amendment)

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Amendment of section 58

by inserting after subsection (1) the following subsection:

“(1a) If default is made in complying with subsection (1), the Labuan company which is in default commits an offence under this Act.

Penalty: Twenty thousand ringgit. Default penalty.”; and

in subsection (6), by substituting for the word “Ten”

the word “Twenty”.

Amendment of section 69

by renumbering the existing provision as subsection (1);

and

by inserting after subsection (1) as renumbered the following subsection:

“(2)  If default is made in complying with this section, the person who is in default commits an offence under this Act.

Penalty: Three million ringgit or imprisonment for a term not exceeding five years or both.”.

Amendment of section 70

by renumbering the existing provision as subsection (1);

and

by inserting after subsection (1) as renumbered the following subsection:

“(2)  If default is made in complying with this section, the Labuan company, foreign Labuan company or agent of the company who is in default commits an offence under this Act.

Penalty: Three million ringgit or imprisonment for a term not exceeding five years or both.”.

in subsection (2), by substituting for the words

“Ten thousand ringgit” the words “Fifty thousand ringgit and default penalty of five hundred ringgit”; and

in subsection (5), by substituting for the word “Ten”

the word “Fifty”.

If default is made in complying with this section, the Labuan company and every officer of the company who is in default commits an offence under this Act.

Penalty: Fifty thousand ringgit. Default penalty.”.

Amendment of section 85

in subsection (1), by inserting after the words “a Labuan trust company” the words “, or any other office approved by the Authority”; and

in subsection (5), by substituting for the word “Ten”

the word “Fifty”.

Amendment of section 86

in subsection (1), by deleting the words “Penalty: Ten thousand ringgit. Default penalty.”;

by inserting after subsection (1) the following subsection:

“(1a)  If default is made in complying with subsection (1), the Labuan company and every officer of the company who is in default commits an offence under this Act.

Penalty: Fifty thousand ringgit. Default penalty.”; and

in subsection (4), by substituting for the word “Ten”

the word “Fifty”.

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Amendment of section 87

in subsection (1), by substituting for the words “at least one director who may be a resident director” the words

“one or more directors at least one of whom shall be resident director”;

by substituting for subsection (2) the following subsection:

“(2)  A resident director of a Labuan company under subsection (1) shall be—

a trust officer of a Labuan trust company approved by the Authority under the Labuan

Financial Services and Securities Act 2010

made available by the Labuan trust company to be appointed as resident director; or

any natural person who has attained the age of eighteen, who is otherwise of full legal capacity, fulfills such criteria or requirement as may be determined by the Authority and has consented in writing to be appointed as resident director.”;

by substituting for subsection (5) the following subsection:

“(5)  A trust officer or a natural person appointed as resident director pursuant to paragraph (2)(a)

or (2)(b), as the case may be, may retire or resign subject to the terms of the agreement between the

Labuan trust company and the Labuan company of which he was appointed as resident director.”;

by deleting subsection (5a);

by inserting after subsection (9) the following penalty provision:

“Penalty: Three million ringgit or imprisonment for a term not exceeding five years or both.”; and

by substituting for subsection (10) the following subsection:

“(10)  The fees payable for the appointment as resident director shall be paid—

in the case of the trust officer appointed as resident director of Labuan company pursuant to paragraph 2(a), to the Labuan trust company which made him available for the appointment; and

in the case of the natural person appointed as resident director of Labuan company pursuant to paragraph 2(b), directly to the person.”.

by substituting for subsection (11) the following subsection:

“(11)  An officer of a Labuan company who contravenes this section shall be liable to the company for any profits made by him and for any damage suffered by the company as a result of such contravention.”;

by inserting after subsection (12) the following penalty provision:

“Penalty: Five hundred thousand ringgit or imprisonment for a term not exceeding five years or both.”; and

by inserting after subsection (12) the following subsection:

“(12a)  If default is made in complying with subsection (3), the director of the Labuan company who is in default commits an offence under this Act.

Penalty: Three million ringgit or imprisonment for a term not exceeding five years or both.”.

Amendment of section 93

in subsection (2)—

by substituting for the words “an officer” the words “a trust officer”;

in subsection (2c), by substituting for the words

“the provisions of section 151 shall apply”

the words “the company is deemed to be struck off the register”; and

by substituting for subsection (6) the following subsection:

“(6)  The salary of the resident secretary of a Labuan company payable by a Labuan company shall be paid directly to the Labuan trust company which made him available for the appointment.”.

in the shoulder note, by deleting the words “directors and”;

by deleting the words “resident director or”; and

by substituting for the words “shall be guilty of that offence” the words “commits an offence under this Act”.

Any Labuan company or foreign Labuan company may, by notice in writing, require any member of the

Labuan company or foreign Labuan company whom the

Labuan company or foreign Labuan company knows or has reasonable grounds to believe that he is a beneficial owner in relation to the Labuan company or foreign Labuan company—

Where a Labuan company or foreign Labuan company is informed or knows or has reasonable grounds to believe, that any other person is a beneficial owner of the Labuan company or foreign Labuan company, or is likely to have that knowledge, the Labuan company or foreign Labuan company may by notice in writing require that other person—

Any Labuan company or foreign Labuan company may, by notice in writing, require any member of the Labuan company or foreign Labuan company to inform the Labuan company or foreign Labuan company, within a reasonable time, as is specified in the notice, whether ownership or control of such member in the Labuan company or foreign Labuan company is subjected to an agreement or arrangement under which another person is entitled to control the member’s exercise of his interest or right and if so, to give particulars of the agreement or arrangement and the parties to the agreement or arrangement.

A resident secretary of a Labuan company or foreign

Labuan company shall ensure that the Labuan company or foreign Labuan company complies with the obligations under this section.

If default is made in complying with this section, the

Labuan company, foreign Labuan company and every officer of the company who is in default commits an offence under this Act.

Duty to lodge information with the Authority 108c.  (1)  The particulars of beneficial ownership obtained under section 108b shall be lodged by the Labuan company, foreign Labuan company or the resident secretary with the

Authority as part of the annual return lodge pursuant to section 109 or 129.

The Authority may, by notice in writing, direct a Labuan company or foreign Labuan company to invoke its powers under this section and to immediately provide the Authority with the information obtained under section 108b.

Any person who submits false or misleading or inaccurate information to the Authority under this section commits an offence under this Act.

Particulars of beneficial ownership 108d.  (1)  The particulars of beneficial ownership required under subsection 108b(2) or (3) shall be determined by the Authority in a guideline issued under section 108g.

Whenever a Labuan company or foreign Labuan company receives information from a person in accordance with any requirement imposed on any person under section 108b, the Labuan company or foreign Labuan company shall be under an obligation to inscribe against the name of that member in a separate part of the register kept by the company under section 105—

If default is made in complying with this section, the Labuan company, foreign Labuan company and every officer of the company who is in default commits an offence under this Act.

Obligation of Labuan company to maintain and keep information up to date 108e.  (1)  A Labuan company or foreign Labuan company shall maintain and keep the particulars of beneficial ownership in its register of members under section 105 updated from time to time.

A Labuan company or foreign Labuan company shall, within thirty days of any changes to the particulars kept under subsection (1), lodge with the Authority such changes in the form and manner as may be determined by the Authority.

Labuan Companies (Amendment)

For the purposes of subsection (2), changes occur if—

A resident secretary of a Labuan company or foreign

Labuan company shall ensure that the Labuan company or foreign Labuan company complies with the obligations under this section.

If default is made in complying with this section or if the Labuan company or foreign Labuan company submits false or misleading or inaccurate information to the Authority under this section, the Labuan company, foreign Labuan company and every officer of the company who is in default commits an offence under this Act.

Power of Authority to require submission and examination 108f.  (1)  The Authority may at any time, by notice in writing, require a Labuan company, foreign Labuan company, a resident secretary or any person the Authority deems appropriate to furnish all the necessary information and particulars of any beneficial owner of the Labuan company or foreign Labuan company and have the information and particulars verified by a statutory declaration.

Any Labuan company, foreign Labuan company, resident secretary or person served with the notice under subsection (1) shall comply with such notice within seven days of the receipt of such notice.

Notwithstanding subsection (1), the Authority may use its power under sections 28b and 28c of the Labuan

Financial Services Authority Act 1996 in relation to the particulars of beneficial ownership and information kept by the Labuan company or foreign Labuan company pursuant to this Division.

If default is made in complying with this section, the Labuan company, foreign Labuan company or resident secretary and every officer of the company who is in default commits an offence under this Act.

Penalty: One million ringgit and in the case of a continuing offence, to a further fine of ten thousand ringgit for each day during which the offence continues after conviction.

If default is made in complying with this section, the person who is in default commits an offence under this Act.

Penalty: Imprisonment for a term not exceeding ten years or a fine three million ringgit or both, and in the case of a continuing offence, to a further fine of ten thousand ringgit for each day during which the offence continues after conviction.

Power of Authority to issue guidelines 108g. The Authority may issue guidelines pursuant to section 4a of the Labuan Financial Services Authority 1996

to clarify any provision of this Division.

Removal of entries from register 108h.  An entry relating to a natural person who used to be a beneficial owner may be removed from the register of members under section 105 after the expiration of six years from the date on which the natural person ceases to be a beneficial owner in relation to the Labuan company or foreign Labuan company.”.

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Amendment of section 110

by inserting after subsection (3) the following subsection:

“(3a)  If default is made in complying with subsection (1), (2) or (3), the director of the Labuan company who is in default commits an offence under this Act.

Penalty: Five hundred thousand ringgit or imprisonment for a term not exceeding five years or both.”; and

in subsection (5), by deleting the words “and sections 112

and 113”.

Amendment of section 111

in subsection (2a), by substituting for the words

“Subject to section 113a, a Labuan company” the words

“A Labuan company”; and

in subsection (3)—

by substituting for the words “this section”

the words “subsection (2) or (2a)”; and

by renumbering the existing provision as subsection (1);

and

by inserting after subsection (1) as renumbered the following subsection:

“(2)  Any director of a Labuan company who fails to take all reasonable steps to secure compliance by the company with the requirements of this section or a resident director who has by his own wilful act been the cause of any default by the company under this section, commits an offence under this Act.

Penalty: Fifty thousand ringgit and default penalty of five hundred ringgit.”.

in the shoulder note, by substituting for the words

“Companies Act 1965” the words “Companies

Act 2016”; and

by substituting for the words “Companies Act 1965 and licensed under the Banking and Financial Institutions

Act 1989, the Islamic Banking Act 1983, or the Insurance

Act 1963” the words “Companies Act 2016 and licensed under the Financial Services Act 2013 and the Islamic

Financial Services Act 2013”.

in subsection (2), by substituting for the word “ten”

the word “fifty”; and

in subsection (4), by substituting for the words “shall be guilty of a further offence against this Act” the words

“commits a further offence under this Act”.

by deleting subsections (3) and (4);

Labuan Companies (Amendment)

in subsection (5), by substituting for the words

“this section” the words “section 151bb”;

in subsection (6)—

by substituting for the words “this section”

the words “section 151bb”; and

in subsection (7), by substituting for the words

“Subsections (2) to (5)” the words “Subsections (2) and (5)

and section 151bb”.

fails to pay its annual fees or any additional amount in addition to the annual fee within the time specified pursuant to section 151;

fails to appoint a replacement resident secretary after the resignation of the former resident secretary pursuant to subsection 93(2c);

contravenes any provision of this Act and any other law relating to Labuan financial services;

being a licensed entity under the Labuan Financial

Services and Securities Act 2010 or Labuan Islamic

Financial Services and Securities Act 2010, has its licence, approval or registration surrendered or revoked by the Authority; or

is not carrying on any business or is not in operation.

Notice of intention to strike off Labuan company 151bb.  (1)  Before the name of a Labuan company can be struck off the register under section 151ba, the Authority shall send a notice to the Labuan company stating that if an answer showing cause to the contrary is not received the name of the Labuan company shall be struck from the register within thirty days from the date of the notice or any extended period as may be approved by the Authority.

After the expiration of the period specified in the notice under subsection (1) or any extended period, unless the

Labuan company has given reasons to the satisfaction of the

Authority, the Authority may strike the name of the Labuan company off the register.

The notice under this section shall be deemed to be served on the Labuan company if the notice—

The Authority may publish in such form and manner a notice of striking a Labuan company off the Register.

For the purposes of paragraph 151ba(d), where after a licence, approval or registration of the Labuan company has been surrendered or revoked by the Authority, if the

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company wishes to continue as a Labuan company, the

Labuan company shall change its name and memorandum within thirty days after such surrender or revocation of licence, approval or registration, or in the event that such

Labuan company intends to continue to use its name and memorandum, the Labuan company may apply to the Authority for approval.

This section shall not apply to striking off under subsection 93(2c).”.

Amendment of section 151c

in subsection (1)—

in paragraph (b), by deleting the word “or”;

in subsection (3)—

by deleting paragraph (a); and

by substituting for the words “Part VIII and Part X” the words “Subdivision 3

of Division 7 of Part III and Division 1

and Division 2 of Part IV”; and

b y s u b s t i t u t i n g f o r t h e w o r d s

“Companies Act 1965” the words

“Companies Act 2016”.

Amendment of section 151d

by renumbering the existing provision as subsection (1);

in as renumbered subsection (1)—

by inserting after the words “under section 151”

the words “or section 151ba”; and

by inserting after subsection (1) as renumbered the following subsection:

“(2)  Where a Labuan company has been dissolved pursuant to subsection (1), the Court may, at any time within six years after the date of dissolution, on an application of any person who appears to the Court to have locus standi and legitimate interest in the Labuan company, if the Court is satisfied that at the time of the dissolution of the Labuan company, the company has not discharged all of its debts and liabilities or that it is for the name of the Labuan company to be restored, make an order upon such terms declaring the dissolution to be void, and such proceedings may be taken as if the company has not been dissolved and the Court may by order give such directions and make such provision.”.

the name of the Labuan company is in the register;

the Labuan company has paid all fees and penalties due and payable; and

the prescribed fee has been paid.”.

in subsection (1), by substituting for the words

“Exchange Control Act 1953 [Act 17] and” the words

“Financial Services Act 2013, Islamic Financial Services

Act 2013 and”;

in subsection (2), by substituting for the words

“Exchange Control Act 1953 and” the words “Financial

Services Act 2013, Islamic Financial Services Act 2013

and”; and

in subsection (3), by substituting for the words

“Exchange Control Act 1953” wherever appearing the words “Financial Services Act 2013, Islamic Financial

Services Act 2013”.

All Labuan trust companies must comply with the requirements of subsection 93(2) of the principal Act within the period of six months from the date of coming into operation of this Act or any extended period approved by the Authority.

Any inquiry, trial or proceedings done, taken or commenced under the principal Act  before the commencement of this Act shall be continued and concluded under and in accordance with the principal Act as if the principal Act had not been amended by this Act.