In July the Malaysian government formed the Malaysia Petroleum Resources Corporation (MPRC), with the long term aim of making Malaysia the number one storage and trading hub in the Asia-Pacific.
Then at the end of October, the MPRC, along with the Labuan FSA, launched an incentive programme to help those developing the country’s storage sector.
The Global Incentives for Trading (GIFT) scheme aims to encourage global storage and trading companies to use Malaysia as their base for storage, trading and business development purposes.
Incentives offered under the GIFT programme to include a flat corporate tax rate of 3% of chargeable income and 100% exemption on director fees paid to non-Malaysian directors.
Others are 50% exemption on gross employment income for non-Malaysian professional traders; tax exemption of stamp duties on documentation for Labuan business activities and tax exemption on dividends received by or from the LITC companies and all other fiscal incentives that are attached to a Labuan entity.
Five trading companies have been given the inaugural licenses by Labuan FSA, entitling them to be immediately eligible for the GIFT incentives.
These are PETCO which is a subsidiary of Petroliam Nasional, Dialog Group, YTL Power International (a subsidiary of YTL), B.B. Energy of Greece and Vitol.
To qualify for these benefits, companies must also generate a minimum company turnover of $100 million (€73 million) annually, employ a minimum of three professional traders as well as use and engage local support services among others.