Startup Formations has been the chosen partner for investors seeking to enroll a credit token business in Labuan. The token industry is determined as any business where a token, being a cheque, card, stamp, voucher,  coupon, booklet form or other documents.

Timeframe: Around 6 months

Minimum paid up capital: Not prescribed

Overview

Labuan is an island and a Federal Territory of Malaysia, which offers one of the effective administrative frameworks for several financial service corporations. This, besides with the advantageous tax system, makes Labuan a great place where to start a Token Licensed Business. According to local authorities issuer of such tokens undertakes that:

  • On the creation of the token, whether or not some other work is further required, the issuer will provide cash, goods or services on credit; or
  • Where, on the creation of the token to a third party, whether or not any other work is further needed, the third party provides cash, goods or services, the issuer will give the third party for them, whether or not decreasing any discount or fee, in return for payment to be made following to the issuer by the customer.

Currently, there is no least paid-up capital for credit token business directed by LFSA. Nevertheless, the Regulator may tax the provision in their conditional permission letter to assure that the capital is in accordance with their business actions. Such capital may be needed to be paid in an amount up to Pound 184700.00 which is same of about USD 250 000.00.

Notable features

General information

Company structure

  • Minimum one shareholders needed. Who can also be a legal person, no nationality or residency limitation*;
  • Minimum 2 directors needed. Who can only be natural person, no nationality or residency limitation*.
  • *Limitation may be imposed by Bank instead.

Taxation

  • 3% of audited earnings or a set price per year MYR 20 000 (based on the organization’s choice can be chosen on or the other

Accounting & audit requirements – A Labuan Offshore Company requires to have an audit conducted by an authorized auditor. A yearly return must be registered 30 days prior to the organizations’ anniversary date of establishment. A set of accounting reports must be kept in Labuan.

  • Secretary – Native secretary, presented by a local trust company
  • Local office – Needed, local trust company
  • Registered Agent – Needed, local trust company
  • Local employees – Needed

Company name

Language: Any

Letters: From the Roman alphabet

  • The company name need end with such suffixes or their acronyms: Limited, Incorporated, Corporation, Societe Anonyme, Sociedad Anonima. If the Malaysian word Berhad is applied then it must be introduced by “(L)” to denote that the organization is incorporated in Labuan
  • Names Needing Consent or a Licence: Bank, insurance, assurance, reinsurance, buildings society, investment fund, trust, trustees, Chamber of Commerce, fund management university, municipal or their foreign language equivalents
  • Names that are misleading or tricky are banned
  • If the Malaysian word Berhad is utilized then it needs to be introduced by “(L)” to denote that the organization is incorporated in Labuan.
  • The company name is restricted to be alike or similar that of an existing company
  • Offensive names are prohibited
Procedure

In order to receive a license, the subsequent steps will be carried out:

  • Gathering and preparation of the records for initial verification
  • Once the confirmation is done and initial paperwork is made, the originals must be couriered
  • Other appropriate documents should be provided to the LFSA based on their requests
  • The application will be prepared with the LFSA for the license
  • Conditional permission will be granted by LFSA so to enable to have enough time (usually 90 days) to:

– meet the capital demands the company

– find and set-up an office

– ask for the phone number

– find a local representative

– comply with other demands

Document

For each beneficial partner, stockholder, administrator, authorized signatory, and secretary:

  • A notarized photocopy of valid passport
  • Notarized proof of residential address
  • Bank recommendation letter
  • CV
  • Lawyer/CA recommendation letter
  • For directors and shareholders:
  • Educational qualification document
  • For shareholders Bank balance evidence

N.B.

All documentation shall be provided in English*

* If records are not in English, then they must be brought by a notarized translation.