Due to Labuan International Bank Financial Centre’s stable administrative framework, adaptable and convenient tax regimes and low cost of set-up and development, it has strongly drawn many global investment bankers to set up in Labuan Jurisdiction Investment Bank are given somewhat different in business activities, hence need different license to operate.

Timeframe: around 6-12 months

Minimum capital: £18,40,000 or its similar in any other currency

Overview

A Labuan investment bank can be created as a division or subsidiary and registered or organized under the Labuan Companies Act 1990. The application may be received from:

  • An investment bank or group joining in investment banking ventures licensed by the administrative authority in the country of origin
  • A licensed bank or an accepted financial institution or financial service provider managed by a qualified regulatory authority
  • Any businesses licensed under the Financial Services Act 2013 with prior permission from Bank Negara Malaysia; and
  • Corporations with significant expertise and knowledge in the commercial industry with at least three years of good track record and controlled by an authority in their home country

Labuan investment banks are not authorized to receive deposits.

Advantages

  • The strategic location of Labuan to obtain the Asia Pacific especially Asian businesses
  • Great infrastructure, management, and amenities of the Labuan IBFC
  • Labuan is a “white” listed jurisdiction, supports the bilateral exchange of tax info
  • Passage to more than 70 double tax agreements with Malaysia
  • 100% ownership is permissible
Notable features

General information

  •    Minimum two directors with banking background that match the fit & proper person standards;
  •     Principal Officer or a director
  •     Compliance Officer

Taxation

  • The corporate tax rate is 3% or a flat charge of RM20,000
  • No withholding tax on profits, interest, management fee, royalty, and technical fees
  • No import tax, sales tax and service tax for all foreign dealings
  • No inheritance tax

Registered office – Needed

Registered agent – Needed

Secretary – Needed

Accounting and Audit obligations

Submission of reports to Labuan FSA within 6 months after the end of every financial year

Local Certified Auditor has to be elected during the process

  • Language: Any
  • Letters: From the Roman alphabet
  • Limited any name that is indistinguishable or similar to a present company
  • Names having royal, state, international, and financial or other significance are forbidden
  •  Names that are misleading or deceitful are forbidden
  • Offensive names are prohibited
  • An only suffix “Limited” is recognized. After establishment, the suffix “Ltd” can be used ubiquitously
Procedure

In order to get a license, the subsequent steps will be taken out:

  • Proposal of the name for the bank
  • Submission of Banking license application to FSA
  • Conditional endorsement processing (approx. 30-60)
  • Company development
  • Accomplishment of all demands on per conditional endorsement
  • Issuance of banking license
Document

In order to proceed, kindly provide the documents in case of the branch and/or subsidiary set up:

  • A letter of awareness from a qualified administrative authority that oversees the applicant’s shareholder/head office
  • A letter of guarantee from the candidate’s shareholder or an attempt from the head office
  • Marketing/ Business plans inclusive of three years’ economic predictions of the candidate
  • Certified authentic copy of the Memorandum and Articles of Association of the appellant
  • Certified authentic copy of the resolutions of the committee or minutes of the customary meeting, which authorize the candidate to apply for a license
  • Copy of the audited year-end accounts of the applicant’s shareholder/head office for the three previous years

Applicant’s corporate profile, which comprises:

– The name, place, and date of establishment of the appellant

– The names, addresses, skills, and expertise of the directors and officers accountable for the overall administration of the affairs of the appellant

– The name and location of each member who holds 10% or more of the polling shares of the applicant

Presentation by the applicant on the integrity of its directors and officers who are accountable for the management of the appellant

Any other data relevant to the application

Operational Requirements:

  • Keep a physical presence in Labuan
  • Every director or chief officer of a Labuan investment bank must be eligible and proper persons and shall not be the discussion of any conflicting report from any credible references. The employment of a director or PO of a Labuan investment bank should receive the prior endorsement from Labuan FSA
  • Comply with the legal obligations under the Labuan Financial Services and Securities Act 2010
  • Comply with the prudential and reporting obligations published by Labuan FSA
  • Adhere to any other obligations published by Labuan FSA from time to time
  • Meet specific pre-determined criteria, should it favor to co-locate to any other parts of Malaysia

For every beneficial partner, shareholder, director, entitled signatory and officer:

  • A notarized copy of valid passport
  • Complete CV dated and signed
  • Notarized 2nd ID
  • Criminal background of no conviction
  • Notarized copy of verification of residential address (ex. utility bill not older than 3 months)
  • 2 certified acknowledged reference letters
  • 2 certified Bank reference letters
  • Notarized Copies of Diplomas of a Higher Education
  • 3 months bank record with sufficient funds to cover the capital obligations and support business for the first year