MM2H vs Labuan for a Freelancer

Hello Friends!

I am a freelancer from India (age under 50) and I have a few clients in Asia Pacific region. I would like to work from Malaysia for balanced work-timings.   Please note that I don't have any Malaysian client.

Thanks to the forums and ever-helpful Gravitas, I had two options to do so:

1) MM2H
2) Labuan visa

I would like to know which option is better -

MM2H:
Can I work as a freelancer in Malaysia under MM2H, as long as I don't have any Malaysian client? Also, I saw threads that there is a backlog and delay in MM2H applications because of an administrative change. Do you think this will clear up anytime soon?

Labuan Visa:
This may be an alternative to MM2H, but I'm worried about the operating costs every month for setting up a company. What do you think are the minimum cost incurred per month with this setup? Also, is this feasible?


Thanks for your help,
Param

You can check out these sites. They should have the information you need.
www.labuanbusiness.com

and

www.migratemalaysia.com

For the first part...Can you work Free-Lance in Malaysia as long as you don't have Malaysian clients. I'd give a conditional yes. If you are working On-Line or sending work product abroad through the mail. courier or hand-delivering it I'd see no issue.

Obviously if you are buying and selling in Malaysia it will raise concerns. It's probably better to have a foreign bank and business address (as a drop) as well. You could then transfer any money into your local bank account as needed.

You'd be taxed abroad on the business but would probably constitute a Malaysian Tax Resident provided you reside 183 days or more per year in Malaysia.

If your business entirely consists of non-malaysian clients then I see no reason to incorporate in Labuan unless there might be some tax-perks. There are some nice deductions for a computer and other items I'd consider business expenses in the Malaysian personal income tax code...but these are deductions...so you need to be paying taxes and receiving local income to take advantage. The Labuan Business/Investors Visa requires having some Malaysian partners, although the way they set up the Directorship these individuals are more in the nature of "placeholders" that receive a fee. Read the fine print carefully though.

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