US Citizens Hub

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    Labuan Company vs Sdn Bhd: US Person CFC & Tax Guide

    ParSmart Invest Malaysia

    Every US person incorporating in Malaysia faces the same pivotal question: Labuan company or Sdn Bhd? The answer depends almost entirely on US international tax law — not on Malaysian corporate rates. A Labuan company taxed at 3% under LBATA still triggers Controlled Foreign Corporation status under IRC §957, exposing its US owner to immediate Subpart F income inclusions and GILTI at ordinary US rates up to 37%. Without a Check-the-Box election on Form 8832, the 3% Malaysian advantage is systematically eliminated at the US level.
    This technical guide compares both entities across 12 dimensions: CFC analysis, Subpart F traps (FPHCI and FBCSI), GILTI mechanics and the critical individual vs C-Corp asymmetry, Check-the-Box election procedure and trade-offs, economic substance requirements, IRS filing obligations, and a decision matrix covering six distinct US investor profiles — from passive holding and active SaaS businesses to family offices and real estate structures.

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    US Citizen Buy Property Malaysia: Direct Ownership vs US LLC vs Labuan IBFC

    ParSmart Invest Malaysia

    Buying Malaysian real estate as a US citizen through the wrong structure can cost hundreds of thousands of dollars in avoidable estate tax, excessive RPGT, and probate complications. The choice between direct personal ownership, a US LLC, and a Labuan IBFC holding company determines your Form 706 estate tax exposure, your RPGT rate at exit, your liability protection during ownership, and your stamp duty burden at acquisition.
    This guide provides the complete decision framework: RPGT rates by holding period and buyer category, the estate tax mechanics of IRC §2031 applied to foreign real property, why a US LLC provides zero estate tax shelter (a fact most US advisors miss), and how a Labuan IBFC structure can achieve both the domestic Malaysian stamp duty rate and meaningful estate planning flexibility. Includes Budget 2026 stamp duty analysis (8% flat for foreign buyers), a full three-structure comparison matrix, and a worked case study on a RM 1.5M KLCC condominium held seven years. Essential reading before signing any Malaysian Sales and Purchase Agreement.

  • US Investor Malaysia Tax Strategy 2026: The Playbook

    ParSmart Invest Malaysia

    The United States taxes its citizens on worldwide income regardless of where they live — making Malaysia’s jurisdiction-specific tax advantages meaningless without the right cross-border architecture. For American HNWI investors and tech founders relocating to Southeast Asia, Malaysia’s 1984 bilateral tax treaty, Labuan IBFC 3% corporate rate, territorial personal income tax, and MM2H residency programme create a legitimate arbitrage opportunity unavailable elsewhere in the region.
    This playbook covers the complete US investor Malaysia tax strategy for 2026: FEIE maximisation ($132,900 exclusion), FATCA-compliant banking via HSBC and Labuan private wealth, corporate structuring through US LLC, Sdn Bhd, and Labuan IBFC entities, CFC and GILTI trap avoidance using Check-the-Box elections, MM2H as a residency planning tool, and a full IRS annual disclosure matrix covering Forms 2555, 5471, 8938, FinCEN 114, 8832, and 1116. Includes a jurisdictional benchmark against Singapore, Dubai, and Portugal, and a 90-day implementation roadmap.