Guide to Apply For Labuan COMMERCIAL Banking License
Starting a bank in an onshore environment is subject to very restrictive conditions, often requiring local resident participation. Labuan International Business and Financial Centre (Labuan IBFC) warmly welcome qualified candidates to apply for the Labuan Banking business with 100% ownership permissible and have total control through the Labuan offshore solution.
There are two types of Labuan banking license available in the Conventional or Islamic system:
1. Labuan Commercial Bank
2. Labuan Investment Bank
There is a wide range of business you can provide with Labuan Banking license. The main difference between Labuan Commercial Bank and Labuan Investment Bank is Labuan Investment bank is not allowed to conduct the business of receiving deposits on a current account, deposit account, savings account or any other account.
To register a bank is a complex and intricate journey that can take a lot of money and time. When you consider establishing a commercial banking business in Labuan, we will guide you with a personalised approach every step of your Labuan Commercial Banking license application. Labuan Financial Services Authority (Labuan FSA) is the main institution which offers banking licenses. We will steer you with strategic planning and structuring the right profile effectively to meet all Labuan FSA’s requirements. Our team will also assist you through all legal and financial considerations, final complete formalizing and set-up of a registered financial institution with Labuan FSA up to your Labuan Commercial Banking license conditional approval is obtained.
Below is a list of Labuan Commercial Bank business activities which you can perform:
»Business of receiving deposits on a current account, deposit account, savings account or any other account
»Providing credit facilities
»Providing consultancy and advisory services relating to corporate and investment matters
»Dealing in securities
»Undertaking foreign exchange transactions
»Interest rate swaps
»Dealings in derivative instruments or derivative financial instruments or any other similar risk management activities
»Other business as the Labuan FSA may allow, with the approval of Minister.
16 BENEFITS OF A LABUAN COMMERCIAL BANKING BUSINESS
♣ The strategic location of Labuan to capture the Asia Pacific especially Asian businesses!
♣ Labuan has the same time zone as major Asian cities-easy for real-time transactions to be made!
♣ Excellent infrastructure, regulation, and amenities of the Labuan IBFC!
♣ Labuan is a “white” listed jurisdiction, endorses the bilateral exchange of tax info!
♣ Labuan entity recognised by Hong Kong and Singapore Exchanges for listing!
♣ Access to more than 70 double tax agreements with Malaysia!
♣ 100% ownership is permissible!
♣ Low corporate tax rate of only 3% !
♣ Permissible to deal with local residents in Malaysian Ringgit!
♣ No withholding tax on beneficial owner’s income!
♣ Foreign director’s fee is 0% tax !
♣ Expatriate employment can enjoy 50% personal tax rebate!
♣ Expatriates eligible for 2 years’ work permit together with their family members!
♣ Eligible to set up Marketing Office in Kuala Lumpur and Iskandar!
♣ Eligible to set-up Co-Located office in any part in Malaysia!
♣ A minimal annual license fee of RM100,000 only!
Labuan Commercial Banking License – The Requirements
The applicant should meet the following minimum eligibility criteria:
1. Must be a bank or financial institution
2. Possesses a soundtrack record
3, Accorded a good credit rating by acceptable rating agencies
4. Supervised by a competent regulatory authority; and
5. Conforms to generally accepted standards of international banking practices or the Bank for International Settlements (BIS), as the case may be.
After the license is approved, to operate your Labuan banking business, the entity must be a Labuan company or a foreign Labuan company incorporated or registered under the Labuan Companies Act 1990.
To apply for Labuan Commercial Banking license the following information and documents are required:
1. Business Plan for the first 3 consecutive years of operations with financial projections, AMLAH and KYC framework, risk policies and operational frameworks
2. Company Statutory documents of the applicant company- certified copy
3. A comprehensive Corporate Profile, which includes:
The name, place, and date of establishment of the applicant
The principal business and principal place of business of the applicant.
The name and address of each member who holds 10% or more of the voting shares of the applicant.
The names, addresses, qualifications, and experience of the directors and officers responsible for the overall management of the affairs of the applicant
4. Three (3) years’ consecutive audited accounts of the holding company or participants who each must hold 10% or more of the paid-up capital
5. Letter of Guarantee from the applicant’s shareholders/head office
6. Letter of Awareness from competent regulatory authority which supervises the applicant’s shareholder/head office
7. Memorandum and Articles of Association
8. Board’s Resolutions to apply for Labuan Bank license
9. Audited annual accounts for the three preceding years
The Labuan Commercial Banking License approval conditions and operational requirements include:
1. All business transactions must be done from and through Labuan.
2. The company must have an operation office in Labuan within minimum 3 staffs with annual spending of RM 180,000.
3. The company shall maintain such capital adequacy of RM 10 million at all times.
4. A licensed Labuan banking business may be allowed to deal in Malaysian Ringgit and with Malaysian residents, subject to the provisions under the Labuan Financial Services and Securities Act 2010 and the Exchange Control Act 1953.
5. Every director or principal officer (PO) of a Labuan bank must be fit and proper persons.
6. The appointment of a director or PO of a Labuan bank must obtain prior approval from Labuan FSA.
7. Comply with the statutory requirements under the Labuan Financial Services and Securities Act 2010.
8. Comply with the prudential and reporting requirements issued by Labuan FSA.
9. Adhere to any other requirements issued by Labuan FSA from time to time.
10. To obtain necessary approval or meet certain pre-determined criteria, should it prefer to set up the Marketing Office or Co-locate to any other parts of Malaysia.
Labuan Commercial Banking License – Managing Your Labuan Bank with a holistic approach
Running the banking business can be overwhelming, complicated and requires investors and levels of expertise to meet the criteria especially when you are new to the banking business in a new jurisdiction. We provide complete management outsourced solutions to support and promote your activities at every stage of a Labuan banking business. Everything is included right down to the making sure your company is compliant with all Acts which means your accounting and records system is reviewed, as well as financial statements approved and readily audited.
REPORTING and Compliance REQUIREMENTS FOR A LABUAN Commercial BANKING BUSINESS
1. Submit accounts to Labuan FSA within six months after the close of each financial year
2. Submit statistics and information required to Labuan FSA from time to time
3. To pay all annual fees due to Labuan FSA on or before 15 January of each year for the following:
- Labuan Banking License Fee RM100,000 (USD30,000)
- Marketing Office Fee RM7,500 (USD2,500)
- Co-Located Office Fee RM10,000 (USD3,500)
Our one-stop license application service level for Labuan Banking License include as follows:
* Consultation on your eligibility and procedures based on your profile
* Profiling, due diligence and guidance on documentation preparation
* Preparation of Business Plan, Financial Forecast and Operation Manuals
* Submission and supervision of application process until approval
* Act as your liaison and contact point with Labuan FSA for all correspondence and arrange an interview (if any)
WHY CP TRUST for Your SET UP A LABUAN Commercial BANKING BUSINESS
We are a fully licensed trust company with a highly experienced team of dedicated professionals. We provide complete solutions in pre-assess, meet, planning, structuring, establishment and corporate service for your Labuan Banking Business, ensuring you get a bespoke service that meets your banking business needs as well as onward operation.
Call us today at +603-2783 9191 or email contact@labuanbusiness for a private discussion on how to set up your Labuan Banking Business. We “simplify the complexities” of your Labuan investment.