The comparison
Scroll sideways on smaller screens — there's a lot to fit. The Labuan column is highlighted throughout.
| Category | United States (C-Corp) | Australia (Pty Ltd) | Labuan (Malaysia) | United Kingdom (Ltd) |
|---|---|---|---|---|
| Headline rate | 21% flat federal, all C-corps | 30% standard rate | 3% on net audited profits (trading); 0% for pure holding companies | 25% main rate |
| Lower-rate tier | None — flat 21% regardless of size | 25% for "base rate entities" (turnover under AUD 50M, ≤80% passive income) | 0% holding rate is itself the lower tier vs. 3% trading | 19% small profits rate (profits ≤ £50,000); marginal relief up to £250,000 |
| Regional tax on top | 0%–11.5% state tax on top (avg ~6.6% among states that levy it) | None — federal tax only, no state-level company tax | None — single federal-territory LBATA regime | None — single national rate |
| Substance / residency rules | None extra — follows US incorporation or effective management | Tax residency based on incorporation or central management/control in Australia | 2 full-time Labuan staff + ~MYR 50,000 (~USD 12,000) annual local spend, tested annually | UK tax residency based on incorporation or central management and control |
| Withholding tax (outbound) | ~30% on US-source dividends/interest/royalties to foreign persons (treaty rates lower this) | 30% dividends (0% if fully franked), 10% interest, 30% royalties to non-residents | 0% on dividends, interest, and royalties to non-residents | 0% — the UK charges no withholding tax on dividends at all |
| Personal tax when owner draws profit | Qualified dividends taxed separately at 0/15/20% (+3.8% NIIT for high earners) — no credit for corporate tax already paid | Franking credits refund the company tax already paid — owner pays only the gap up to their marginal rate (0–45% + 2% Medicare levy) | No Malaysian tax on distributions from LBATA-taxed entities — exempt from Malaysia's dividend rules; home country may still tax on repatriation | Dividends taxed 10.75% (basic) / 35.75% (higher) / 39.35% (additional) above a £500 allowance — partial, not full, offset for corp tax paid |
| Rough total owner-level bite | ~39–47% combined (corp + personal) for a high-income owner | Caps at the owner's top marginal rate (~47% incl. Medicare levy) — no extra layer on top of company tax | ~3% (or 0%) total in Malaysia — but home-country tax on repatriated profit still likely applies | ~45–55% combined for additional-rate taxpayers (25% corp + up to 39.35% dividend tax on the remainder) |
| Best fit | US-facing operations, US customers, USD banking access | Businesses with real Australian operations/customers; dividend imputation avoids double taxation for local shareholders | Genuine cross-border trading/holding structures with real Southeast Asian business activity — not shell-only setups | UK-facing trading companies, or non-resident owners who value the lack of dividend withholding tax |
The one line that matters most
Labuan's low headline rate is real, but the phrase to hold onto is "home-country tax on repatriated profit still likely applies." Labuan is not a way to avoid tax where you actually live — it's a low-tax jurisdiction for the company's cross-border trading or holding activity itself. What you owe once profit reaches you personally still depends on your own country's rules, same as every jurisdiction in this table. If you're a US, UK, or Australian resident, that's not just about repatriation either — see our guide to home-country CFC rules for how each system can tax the company's income directly.
General information only, not tax advice. Figures reflect 2026 rates and are approximate — actual combined and owner-level figures depend heavily on individual circumstances, applicable tax treaties, and residency status. Speak with a qualified cross-border tax advisor before structuring a business.