Cryptocurrency Exchange License in Labuan

Cryptocurrency Exchange License in Labuan

Crypto exchange/digital assets exchange platform allows you to transfer electronic money and cryptocurrencies. This gives a convenient opportunity to exchange different currencies; for example, you can exchange cryptocurrencies for cryptocurrencies, cryptocurrencies for fiat and fiat for cryptocurrencies.

Market participants can pay for cryptocurrencies by credit card, e-wallets and other methods of payment. It is possible to obtain an exchange license in Labuan and this has been in great demand since 2018.

In Labuan (Federal Territory of Malaysia), you get the opportunity to conduct business on the international market under 3% corporate tax and on Malaysian market under 24% rate.

Fusang Exchange, a fully licensed Asian stock exchange, received full approval for the stock exchange from the Labuan FCA in 2019. In Labuan, great efforts are made to regulate exchanges and trade, in accordance with adequate AML and KYC standards in order to establish sustainable business.

Under the applicable law, the exchange can freely operate in other jurisdictions it provides great convenience for entrepreneurs. Labuan is known for its affordable costs and good reputation and is popular with people who start new businesses.

Why is it worth getting this license:

  • Foreign ownership, no need for a local partner
  • Corporate income tax is 3% or a fixed amount of 20,000 Malaysian ringgit (4,000 EUR) per year; it is possible to choice between these regimes.
  • No management fees, pass-through interest taxes, technical fees and royalties
  • Currency exchange is not controlled
  • No stamp duties, no VAT
  • No sales and service taxes, as well as import duty
  • There is no capital gain tax and inheritance tax.
  • There is access to over 70 Treaties on Avoidance of Double Taxation
  • There is a tax reduction for foreign managers and specialists in the amount of 50%
  • No taxes on CEOs fees
  • There is no tax on dividends to shareholders
  • Malaysian 2 year work visa with the possibility of further extension

Eligible Applicants:

  1. Person or institution that has many years of experience in the crypto industry (at least 3 years), good references and excellent reputation.
  2. Other service providers from other jurisdictions whose local authorities have provided an approval.
  3. Any licensed institution, meeting the requirements of the Financial Services Act (2013), adopted by the Central Bank of Malaysia.

Obligation and eligibilities of a license holder:

  1. Paid up capital in the amount of RM 10,000,000 (EUR 2,044,500) without any loss and with bank confirmation.
  2. Since all money transfers can be made only through Labuan, it is necessary to have an office for such transactions.
  3. Transactions with foreign currencies are allowed (including Malaysian ringgit).
  4. Operations with residents of Malaysia are possible.
  5. 5. The licensee must inform the Labuan FSA within 14 days of any technical failures or intrusions into the system.
  6. An external auditor should be appointed. Full audit is to be completed once a year.
  7. Provide segregated accounts for all clients, where all funds must be properly managed. Client must be able to withdraw their funds in the term of 3 working days.
  8. All agreements with clients are to be documented.
  9. Follow the AML / CFT Law and Guidelines issued by the Central Bank of Malaysia and the Labuan FCA.
  10. Labuan FSA will authorize company’s decision to change: director, ownership, location or to outsource some functions.
  11. Annual license fee – 40,000 RM (8,200 EUR).

Documents that are required to obtain the license:

  1. Business plan for 3 years, which includes possible marketing strategies and financial forecast.
  2. Profile and qualifications of directors and shareholders.
  3. Accounting reports for the last 2 years (only for companies –applicants).
  4. KYC, AMLA and Operations Manual / Procedures.

Timing:

  1. A period of 30 to 60 days, subject to the receipt of additional documents and the information that the Labuan FSA may request during the approval period.
  2. The Labuan FSA may also schedule meetings or interviews with key personnel to clarify or clarify specific issues.

Regular annual fees:

  1. Regular license fee – 40,000 RM (8,200 EUR).
  2. Optional fee on Marketing Office (possibility to have a representative office on the territory of Malaysia) – 7,500 RM (1,500 EUR).
  3. Optional fee on a Co-Located Office (possibility to locate office on the territory of Malaysia) – 10,000 RM (2,000 EUR).

The first payment must be made after the approval of the license, it will be valid until December 31, and then every year you must pay no later than January 15 of each year.

Eternity Law International will provide you with expert advice on obtaining a cryptocurrency exchanger license in a suitable jurisdiction. If you have any questions or need advice on obtaining the license, call us at the phones indicated on the site, or write to CRM form, our specialists will answer you online.

Tags
Prev Next