Eternity Law International News Crypto Exchange Licensing in Labuan

Crypto Exchange Licensing in Labuan

April 19, 2022

Labuan cryptocurrency exchange is a digital space via which issuer of digital assets can transfer their funds (incl. cryptoactives) to other persons, in particular, invest in a project, and trade in cryptocoins, transfer fiat for crypto and like that. Crypto exchange licensing in Labuan is a necessary step for entrepreneur wanting to master this niche.

A trader or crypto investor sells or buys certain cryptoassets listed on exchange, paying for them with a credit card, through digital wallet or using some other form of payment. The authorities of the Labuan jurisdiction have welcomed the cryptocurrency since 2018, among other things, by supporting digital exchange activities, quoting it in permits issued.

Crypto investor in Labuan has right to enter into partnership with international markets, fully controlling all his operations independently, which means that there is no need to “connect” a resident person to such activities. At the same time, the corporate tax rate will be 3%. Through Labuan Money Broking License, a trader or investor can interact with the Malaysian market as a whole, however, it should be noted that the local tax of jurisdiction itself is 24%.

In April 2019, first securities exchange in Asia was fully licensed for digital assets. Fusing Exchange, was approved by Financial and Services Authority in Labuan. Every effort was made by jurisdiction authorities to adequately regulate cryptoassets exchange and trade, therefore, exchange was subject to legalization and licensing with proper observance of AMLA and KYC rules.

Due to the fact that Labuan sets affordable pricing policy for cryptocoins sphere, it allows Labuan exchanges for sale to easily demonstrate the implementation of certain activities within state where structure is located directly. Thus, Labuan crypto exchanges is in great demand among crypto investors, since it does not require high operating costs and provides all kinds of support for all cryptostructures. Plus, cryptoasset exchange can also intend getting ICO permit.

Benefits of Crypto Exchange in Labuan

Obtaining license for crypto exchange in Labuan is supported by the following benefits.

  • Corporate tax – 3%.
  • No need to cooperate with a Malaysian resident partner – full control over enterprise and operations.
  • Management and royalties fees – no. In addition, there is no interest ones.
  • A zone free from currency monitoring.
  • No services and goods tax.
  • Labuan does not charge import duties, inheritance taxes or capital gains.
  • Doing business in Labuan, entrepreneur has 70+ partners access in Malaysia who are members of the tax-treaty.
  • Foreign managers and non-resident employees receive a 50% tax credit.
  • Remuneration paid to a foreign director is completely free from tax, as are shareholder dividends.
  • Job visa is issued for a period of 2 years. At the end of the term, it can be extended. Presence in Malaysia is not demanded.

Set up Labuan Cryptocurrency Exchange: Commercial Line

  1. Company with cryptocurrency exchange license in Labuan acts being services giver or as cryptoexchange directly, even operating in other jurisdiction – nevertheless, it is possible exclusively after obtaining accordant approval for crypto business from FSA in Labuan.
  2. Company in Labuan or individual who has perfect experience in operating with cryptocurrencies, in particular, with cryptoassets exchange, and can prove impeccable personal portrait, may obtain license for crypto exchange in Labuan.
  3. Establishment licensed with Malaysia Bank approval may also start as crypto asset exchange company, incl. cryptocoins exchange – that is described in Financial Services Act 2013.

Rules for Structures Getting Crypto exchange License in Labuan

  • Paid up initial capital must be a minimum of 10 million local currency or equivalent. It is obligatory getting confirmation from Labuan or Malaysia banking facilities.
  • Company must have premises in Labuan for running business. In addition, each transaction must be made exclusively via this jurisdiction.
  • Transactions may be made in any currency chosen by the trader or investor.
  • Company is allowed entering into deals with local commercials, including authorized dealers, who gained approval from Malaysian Foreign Exchange Control.
  • Firm must mandatory have external independent auditor for conducting audit on annual basis.
  • Each customer agreement and any contracts, as well as all transactions, should be recorded in written form and must be documented.
  • Organization must have Compliance Officer – AML/CFT Law and norms determined in Malaysia Bank guidance and Labuan governing bodies are to be strictly enforced.
  • If company wants to change directors, shareholders composition or relocate operational premises, incl. changes to outsourcing contract; it must receive prior FSA acceptance.

Documents Required for Permit Getting

  • Shareholders and directors details, including their professional level.
  • Business activity description in perspective of 3 years. The plan should include marketing strategies and financial projections.
  • AMLA, KYC and internal firm guidelines.
  • Accounting for last couple of years, if the company has been in operation.


  • One or two months are dedicated to filing application. The exact timeframe depends on the need to obtain additional information about the candidate. In some cases, face-to-face interviews with senior management may be required.

We reccomend you to get closer look to licenses for sale and ready-made companies. Eternity Law team can provide you with any type of special support and give complex advice on all issues you are interested in. We have long-standing experience of working with different commercial projects that have became a basis of our professionalism.

Please, contact our specialists for detailed information.

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