Eternity Law International — News — Offshore bank license in Labuan

Offshore bank license in Labuan

Published:
February 11, 2019

Labuan is located east of Malaysia, south of the South China Sea and north of the north of Brunei Bay. It is part of the federal territory of Malaysia and consists of one large and six small islands.

Labuan Investment Banking Business under the Labuan Financial Services and Securities Act 2010 (LFSSA) means:

  1. Provision of credit funds;
  2. Providing consulting and advisory services on corporate and investment issues or creating an investment on behalf of any person;
  3. Conducting foreign exchange transactions, interest rate swaps, transactions with derivatives or financial derivatives or any other similar risk management activities;
  4. Labuan Islamic Investment Banking Business;
  5. Other matters such as Management of funds, with the permission of the Minister, in any currency other than the Malaysian currency.
  6. Labuan Investment Banks are not allowed to accept deposits.

In accordance with the provisions of the LFSSA and the Foreign Exchange Control Act 1953 (ECM), a licensed investment bank Labuan may be allowed to transact in the Malaysian ringgit and with Malaysian residents.

Labuan license eligibility for sale

Labuan Investment Bank can be established as a branch or subsidiary and registered under the Labuan Companies Act 1990. The application can be accepted from:

  1. An investment bank or investment banking group licensed by the regulatory authority in the country of origin;
  2. A licensed bank or designated financial institution or financial service provider controlled by a competent regulatory authority;
  3. Any licensed institution under BAFIA with prior permission from Bank Negara Malaysia;
  4. Corporations with the requisite experience and knowledge in the financial industry, with good results at least 3 years of track record, and are regulated by a body in their respective countries.

Approval Requirements – Investment Banking License in Labuan for sale

The applicant company submits an application from the head office / parent company and assumes any liability arising from the activities of its branch or subsidiary in Labuan;

  1. The applicant company must submit a business plan for the first 3 years of work;
  2. The applicant company must also submit audited annual reports for the 3 years preceding the application;
  3. The application, where applicable, must be confirmed by a letter of consent from the regulatory body;
  4. The controller or director / CEO of the applicant company must be suitable and appropriate persons.

The appointment of the subsidiary’s board of directors also requires prior approval from the Labuan FSA.

Timeline – Labuan Investment Banking License
The term, excluding the time for opening a bank account – 6-12 months + delivery time for the courier, depending on the documents provided.

The minimum paid up capital is 10 million RMB (or equivalent in any other currency).
Opening a bank account – 3-4 weeks (depending on the client’s documents, his type of activity and the validity of the bank reference letter).

Allowed currencies are any other than Ringgit Malaysia.

PROCEDURE AND REQUIREMENTS

We will do it for you. We need the following documents from you:

  1. Certified copies of passports of directors and shareholders (2 sets);
  2. Certified utility bill from direct directors and shareholders (2 sets). Account or bank statement;
  3. Letter of recommendation from the bank;
  4. Confirmation of the bank balance for the shareholder – balance of at least 500,000 MYR (about 123,000 US dollars);
  5. All specified documents must be scanned for initial verification;
  6. After the verification passed, the documents should have been sent in original;
  7. Payment is made for the complete process;
  8. other relevant documents may be requested additionally;
  9. The application will be processed using the LFSA license.

Conditional approval will be granted once the capital requirement is met (Company capital of US $ 123,000, after depositing capital you can withdraw it for use) *

* Capital can be withdrawn for use, but the level of capital must be maintained at a minimum level. If the amount of capital falls below the minimum, the bank may close the account and the LFSA will therefore refuse / terminate the license.

  1. After initial approval, the client is required to pay an advance of £ 5,000 annually
  2. Passport of an authorized person on behalf of the corporation (copy certified by an authorized attorney, notary or embassy);
  3. Utility bill of an authorized person on behalf of the corporation (certified copy by an authorized attorney, notary or embassy);
  4. Recent proof of education and work experience of an authorized person for a corporate body;
  5. M&A includes a provision for the creation of a Labuan company or permission to do so;
  6. 2 Referral letters for an authorized person, which must be issued by a professional such as a lawyer, accountant, company secretary or bank of an authorized person for a corporate body;
  7. Registers of companies listing the name of the director, shareholder, auditor, company secretary (certified copy by the company secretary);
  8. Company registration certificate (for authentication by the company secretary);
  9. Company registered address certificate;
  10. Company resolution appointing an authorized person on behalf of the company (certified copy by the Company Secretary);

The company’s resolution on investing in the Labuan company

  1. Structure of the corporate block of shares, including the applicant;
  2. Certified document confirming the issue of the license provided by the relevant departments of the country of origin – if applicable;
  3. Statement of opposition to the creation of a subsidiary or branch of Labuan;
  4. Confirmation that the applicant is a shareholder or head of a good financial office
    standing;
  5. Cooperation agreement in the framework of supervision of the proposed branch in Labuan in terms of international regulatory standards;
  6. Minutes of the general meeting approving the applicant;
  7. copies of three-year financial statements / annual reports

COMPANY STRUCTURE – Investment Banking License in Labuan

Founders – from 1 shareholder (there can only be legal entities, without restrictions on citizenship or place of residence)
Director – at least 2 directors (can only be individuals, without restrictions on citizenship or place of residence).

Once licensed, a local office must be established (no requirements for the size or location of the office), at least 3 local employees and a local phone number. Physical presence of at least 1 Operations Manager, 1 Compliance Officer, and 1 Accountant.

TAXATION AND REPORTING

  1. Brokerage activities – 3% of net profit annually
  2. Other taxes – 0% (capital income, withholding tax, fees on offshore instruments)
  3. The brokerage company will be required to file financial statements.

Meetings – Labuan Investment Banking License

The deadline for the first meeting is the end of the first fiscal year. There are various companies that can provide such services. The price will depend on the service provider. Larger companies will charge higher fees than local companies.

ADDITIONAL REQUIREMENTS – Labuan Investment Banking License

According to the law, investment banks must spend a minimum of RM 180,000 on annual operating expenses in Labuan (i.e. local staff salaries, annual audits, etc.).

Our services

  1. Labuan Forex license with the establishment of Labuan company plus opening a bank account:
    – Registration of a company in Labuan
    – Initial set of corporate documents under apostille
    – Opening a bank account for a company (MayBank, FAB or other)
  2.  Individual drafting of AML procedures and company business plan

The cost of our services depends on the set of necessary measures. To obtain a calculation of the cost of obtaining a license, contact our specialist.

Also, every week we have new jurisdiction to offer a ready-made turn-key solution! We work worldwide.

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