Malaysia on the White List

There is a building right now.........that is the address for 18,000 corporations. Well that is either the biggest building in the world or the biggest sham in the world, and I think we know which one it is. I will shut down those offshore tax havens and all those corporate loopholes as President, because you shouldn’t have to pay higher taxes because some big corporation cut corners to avoid paying theirs. All of us have a responsibility to pay our fair share. That’s putting country first. - Barack Obama

Well most of us know Barack was talking about.......Delaware. Well he could have been referring to an island close to his old neck of the woods....Labuan.

Despite the "offshore" baggage known as Labuan, Malaysia on now on the OECD "white list" and fair game to park money and structures.

Like some of its Asian tiger neighbours, Malaysia has remained on the cusp of being a player in global finances. As for trusts, on paper, it was every bit a competitive a trust jurisdiction as Singapore or Hong Kong,......thirty years ago that is. English law based, some local jurisprudence, etc. Unfortunately, the competition just soaked up everything and left the place as is thirty years later.

Labuan is another matter. Labuan is a politically and geographically part of Malaysia but isn't when it doesn't want to be. The special economic zone of Malaysia.....quite an advanced concept back in the 90s. It was perhaps the most tax, funds and corporate vehicle advanced and sophisticated place in Asia at one time. At one time, there were perhaps as many international CPA/law firms, trust, funds and corporate providers there to rival the BVI or Caymans in their formative stages. Then "offshore" became a bad word, the tax "planning" got a little overzealous and Labuan's light started to dwindle and never reached the heights that it might have. It very well could have become the Delaware of Asia.....the Channel Islands of the East. Perhaps the Achilles' heel was that there was no "onshore" to support and bolster the offshore component.

Looking forward, there will always be a lucrative Malaysian wealth market to tap but unless there's some factor (ie tax) that drives you into Malaysia or Labuan, there's simply nothing to motivate you to move onto onshore Malaysia. In fact, the strategy will be as it was thirty years ago........pull the money out Malaysia and park it in Singapore or Hong Kong.