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