Leasing is the business in which one company may obtain the use of certain fixed or movable assets for which it pays a series of contractual, tax deductible payments. It is the words “tax deductible” that we find added value in respect of the offshore version of such contracts.
Labuan IBFC offers you significant benefits in this regard. For example, no stamp duty is imposed on leasing transactions; nor is there any withholding tax on the lease rentals.
As such, Labuan is the ideal location for your leasing business. Over 100 corporations from around the world have established leasing companies at Labuan IBFC and can certainly attest to the benefits of Labuan as a leasing centre.
Malaysian companies have not been left out in the cold either, as they have been accorded the right to use Labuan IBFC for their leasing transactions, as part of special exemptions from the Ministry of Finance.
So it comes as no surprise that leasing continues to be one of fastest growing financial service industry in Labuan IBFC. This can be seen in the number of leasing companies that grew from 104 in 2007 to 119 in 2008 and to 136 in 2009. In terms of cumulative value of assets, there was also a corresponding increase, from USD14.1 billion in 2007 to USD17.3 billion which is a 23% growth. The trend continued unabated in 2009 with growth hitting 26% over 2008 and cumulative assets at USD21.8 billion.