Forex license in
Labuan 2024
Labuan is considered as an effective solution for financial companies looking to expand their geographic power and activity pool. It’s low approval timings accompanied by low tax and straightforward regulations has recommended itself as a prime choice. Legalaes ensures compliance with all licensing requirements by providing a guaranteed turnkey solution.
Regulations for Forex broker license in Labuan
The Labuan Financial Services Authority, established under the Labuan Financial Services Authority Act 1996, functions as the regulatory and supervisory body for finance-related entities in Labuan. Its objectives include:
- Promoting and developing Labuan as a premier international business and financial services center.
- Serving as the principal regulatory, supervisory, and enforcement authority within Labuan’s international business and financial services industry.
- Overseeing financial operations.
- Implementing rules and ensuring compliance with standards.
- Issuing and revoking licenses as required.
Taxation of forex companies in Labuan
- Corporate income tax is set at a competitive rate of 3% on worldwide net income.
- Dividends are not subject to withholding tax, promoting financial efficiency.
Types of Forex licensing in Labuan
| License type | Description of license |
|---|---|
| Dealing in Securities | Allows companies to actively engage in the trading and dealing of securities in Labuan, with permissions including:
|
| Investment Advisory | Essential for entities that specialize in offering investment advice and financial planning services. It supports a range of activities including:
|
| Administrative Services | Designed for firms that handle the administrative aspects of securities transactions and compliance, it covers:
|
Overview of requirements to obtain forex license in Labuan
- Incorporate a company under the Labuan Companies Act for legal operation within the jurisdiction
- Appoint at least two team members, including one in a managerial position, to ensure effective governance and oversight
- Secure a minimum paid-up capital of RM150,000 to demonstrate financial stability
- All team members must be deemed fit and proper, adhering to high standards of integrity and professional conduct
- Establish a physical business presence in Labuan for essential functions like record-keeping
- The shareholder and team members must have proven experience in the financial sector, showcasing their ability to manage financial services effectively
- Commit to annual operating costs of at least RM100,000 in Labuan, affirming the financial readiness to sustain operations
Estimated time frames to obtain forex license in Labuan
Business name verification
1-5 days
Company formation
7-14 days
Documents preparation
4 weeks
License application and approval
8-12 months*
* The timeline also depends on the workload of LFSA and any clarifications and queries that LFSA may request in relation to the application.
Legal services for obtaining Forex license in Labuan
Basic Package
22,000USD initial set up
- Name reservation
- Company incorporation
- Due diligence
- Government fees
- Eligibility check
- License application
- Guidance on a process
- Assistance with share capital contribution
Registration of the Forex Dealer licensed company under the minimum regulatory requirements
Additional services on request
- Individual Business plan
- Adaptation of prepared documents
- Accounting services
- Legal opinion
- Assistance in opening bank account
- Setting up KYC/KYT provider
- Apostilled corporate documents
- Legal support
Ready-Made solution
available on request
- Registered company
- Legal address for 1 year
- No debts, no liabilities – clean company
- Registered share capital
- Active license
- Corporate documents
- Assistance with transfer of ownership
Jegor Kupratsevits
Head of Finance Projects
Requirements for Forex licensing in Labuan
List of required documents
- Curriculum Vitae (CVs): Submission of CVs for shareholders and team members to provide insights into their experience and qualifications, ensuring a knowledgeable and skilled workforce.
- Reference Letters: Obtaining reference letters for every key person to validate their professional profile and integrity, reinforcing the credibility of the business team.
- Fit and Propriety Assessment: Compliance with the Guidelines on Fit and Proper Person issued by Labuan FSA, assessing the integrity, competence, soundness of judgment, and financial standing of each individual.
- Business Address Documentation: Providing proof of the business’s physical presence in Labuan through document proof of the principal place of business and an address for service, as well as evidence of a business address outside Labuan if applicable.
- Business Plan: detailed business plan that outlines business intentions, service offerings, target markets, revenue projections, expected financial performance, manpower plans, and equity structure, illustrating the company’s strategy and operational vision.
- Proof of Funds: Demonstrating adequate financial resources to support company operations, ensuring sustainability and stability.
- Insurance Quotation: Securing and submitting an insurance quotation, confirming risk management measures are in place for the proposed business activities.
- Manuals and Policies: Documenting comprehensive internal policies and procedures to guarantee regulatory compliance and maintain operational integrity.
Share Capital and Government Fees
- Minimum Paid-up Capital: Maintaining a minimum paid-up capital of MYR 150,000 (~US$32,000) to exhibit financial robustness and operational readiness for obtaining forex license in Labuan.
- Application Fees: Payment of relevant application fees as specified depending on the forex license in Labuan (Labuan securities license – US$ 1,500).
Personnel Requirements
- Compliance Officer: tasked with the ongoing responsibility of adhering to regulatory standards and compliance.
- Key Person Appointment: Appointing a key person charged with overseeing critical aspects of the company’s operations, ensuring effective management and leadership.
- Fitness and Propriety Standards: Certifying that all personnel adhere to high standards of fitness and propriety, reinforcing organizational trustworthiness and ethical conduct.
- Auditor Engagement: Engaging an approved auditor to conduct annual audits, validating the financial health and operational transparency of the company.
Business premises requirements
- Applicants for forex license in Labuan are required to have a registered office within Labuan, underlining the commitment to operate within the regulatory framework and ensuring proper record-keeping practices are in place.
Roadmap of obtaining Forex license in Labuan
For more detailed road map of the project and commercial offer – get in touch with our Forex professional.
Jegor Kupratsevits
Head of Finance Projects
Initial Setup
The initial phase is focused on conducting extensive due diligence on all company stakeholders, ensuring alignment with Labuan’s regulatory framework. Legalaes assists in the preparation of essential documents, including agreements, business plans, and compliance manuals, tailored to meet the specific regulations of Labuan. This step is crucial for organizing a comprehensive application package for submission to the Labuan Financial Services Authority (LFSA).
Company incorporation
This step involves the incorporation of a company in Labuan as per the Labuan Companies Act, ensuring that the shareholder structure is clearly defined. This includes detailing the team members and establishing the official address of the company within Labuan.
Submission
During the submission phase, the focus shifts to a detailed review and submission of the complete application package to the LFSA. Concurrently, the process for opening a bank account in Labuan, accommodating both local and foreign currencies, is initiated.
HR & Compliance Team
Legalaes presents options for selecting experienced local compliance teams well-versed with Labuan’s regulatory environment. This extends to supporting the recruitment process, guaranteeing that the chosen personnel meet the LFSA’s requirements.
Follow-Up
Ongoing communication with the LFSA is essential to address any inquiries or requests for additional information. The setup of the bank account continues, with a keen focus on providing any required documentation.
Approval
Upon securing approval, Legalaes assists in completing the formalities to receive the official Securities r License from the LFSA, including acquiring the Certificate of Incorporation.
Operational Launch
With the license in hand, companies can start their operations under the Labuan regulatory framework. Legalaes remains supportive, offering continuous assistance in compliance monitoring and regulatory reporting to ensure adherence to LFSA guidelines.
Advantages of registration Forex company in Labuan
01
Cost-Efficient Maintenance
Enjoy reduced financial liabilities with low maintenance fees, making it a cost-effective solution compared to other jurisdictions. This advantage helps in minimizing operational costs without compromising on the quality of financial services.
02
Tax Optimization
Enjoy a favorable tax regime with a corporate tax rate of just 3% on net profits, significantly enhancing your company’s profitability and facilitating quicker growth and expansion efforts.
03
Worldwide Recognition
The Labuan securities license is esteemed globally, ensuring your business gains international respect and recognition. This not only bolsters your credibility but also opens up expansive opportunities for global engagements and partnerships.
04
Licensing Process
Benefit from streamlined and efficient licensing procedures, with the regulator showing keen interest in fast-tracking the issuance of your license. This efficiency ensures that your business can start operations without unnecessary delays, giving you a competitive edge.
05
Spectrum of Permitted Activities
With one single license, gain the ability to engage in a wide range of financial activities, from investment advisory to brokerage services. This flexibility allows your company to diversify its offerings and provide service to a broader clientele without the need for multiple licenses.
06
Moderate Compliance
The regulatory framework for the Labuan securities license requires moderate compliance, providing a balance between careful oversight and operational flexibility. This approach reduces the burden of compliance while maintaining high standards of financial conduct and integrity.
Links for legislation related to Forex business in Labuan
Establishes the legal framework for financial and securities services in Labuan, overseen by the Labuan Financial Services Authority (LFSA). This act aims to promote and develop Labuan as an international financial center, ensuring the integrity and stability of its financial system. It covers a wide range of financial services activities, including banking, insurance, and Islamic finance, providing a comprehensive regulatory environment that supports business flexibility and compliance with international standards.
This act sets forth measures to combat money laundering and terrorism financing in Labuan, outlining responsibilities for financial institutions in identifying, preventing, and reporting any financial transactions suspected of being related to criminal activities.
Governs the incorporation, regulation, and dissolution of companies in Labuan. Designed to facilitate ease of doing business, this act provides a framework for the establishment and operation of both domestic and international companies in Labuan.
Provides a detailed set of criteria and requirements for obtaining a securities license in Labuan. These guidelines are intended to ensure that entities applying for a securities license possess the necessary qualifications, financial stability, and operational capabilities to offer securities trading and related services. By setting clear standards, the guidelines aim to protect investors and maintain the integrity of the financial services industry in Labuan.
Establishes the Labuan Financial Services Authority (LFSA) as the regulatory body for financial services in Labuan. The act defines the powers and functions of the LFSA, including the oversight of financial institutions, issuance of licenses, and enforcement of financial services laws. It aims to ensure the effective supervision of the Labuan financial services sector, promoting its development while protecting the interests of investors and the public.
FAQ about Forex license in Labuan
1. Why choose Labuan for a financial license?
Labuan stands out because it offers a single license that covers different activities like brokerage, investment advice, and administrative services. This makes Labuan an attractive spot for those looking for a straightforward and widely recognized financial license.
2. Who can apply for a Securities License in Labuan?
Individuals with the right degrees or qualifications in finance, those already licensed in other places, and even those without these qualifications but who have experienced people running their operations can apply for a Securities License in Labuan.
3. How long does it take to get a license in Labuan?
Getting a license can take anywhere from 10 to 16 weeks, depending on how prepared your business is and the specifics of your business model. This time frame allows the regulator to review your application and ask for any extra details if needed.
4. How can my clients check if my Labuan license is real?
The Labuan Financial Services Authority lists all licensed businesses on its official website, including their names and how to contact them. This way, clients can easily check to see if a license is legitimate.
5. I have a license from another country; will that affect my application in Labuan
Having a license from another country is actually a good thing for your Labuan application. It can make the process go faster and shows that your business meets high standards, making your company stand out in Labuan.
Each of our projects receives unique and tailored solutions in accordance with the initial objectives and vision of the shareholders.
May also interest you
