Labuan Money Broker

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Labuan Money Broking License

LABUAN, also known as the Pearl of Borneo, is centrally located in the heart of the South China Sea. Roughly equidistant from Singapore, Bangkok, Hong Kong, Kuala Lumpur, Manila and Jakarta, it also shares the same time zone with major Asian cities such as Beijing, Tokyo, Hong Kong, Manila, Bangkok, Singapore, Jakarta and Perth. The climate is warm and humid throughout the year, with daytime temperatures average 30°C. The official currency is the Malaysian Ringgit (RM).

Unlike other Malaysian towns, Labuan is unique as it is totally surrounded by sea. This tropical-islands paradise with International Business and Financial Center plus Free Trade Zone transforms it into an ideal business playground for the corporate tourist, business and affluent travelers.

Become a Forex Money Broker in Labuan

The money broking business is defined as the business of arranging transactions between buyers and sellers in the money or foreign exchange markets with brokers acting as an intermediary for consideration of brokerage fees paid. It is a straight thru processing (STP) model. Labuan Forex Money Broking license, however, does not include the buying or selling of Ringgit and foreign currencies by the broker as principal in such markets.

It is easy to start your own Forex or Money Broking business in the Labuan jurisdiction with 100% foreign ownership! Labuan Authority has recently issued new guidelines on money broking business in Labuan with effective 1st Jan 2019.

Global Premier & Associates offers you a complete package to set-up a system for a Labuan Forex Broker License. We will help you in each and every step of the way to ensure your business trust and high level of confidence during Labuan Forex Company Formation.

Our complete package offers you all the mandatory requirements that are very needed for a successful registration and renewal with the Labuan FSA and IBFC along with the required compliance with the regulatory authorities.

LIBFC (Labuan International Business and Financial Centre) is one of the regulatory bodies that are responsible for issuing, reviewing and regulating the FX companies licensed by these authorities. The LIBFC licenses are only issued to those financial companies which look forward to engaging in Forex activity, but only if they meet certain criteria set by the regulator, including capital adequacy, proper tests and mandatory physical office in Labuan.

Money Broking license in Labuan can be obtained relatively quickly with an approximate time frame of 3 months and it weighs lesser on pockets. Documents processing and bank procedures are easy in Labuan and entitles it as a well-regulated jurisdiction.

Labuan Money Broking License Advantages

  • 100% foreign ownership, no need Malaysian local partners;
  • Tax only 3% or pay flat fee RM20,000 on Trading Profit;
  • Zero withholding tax on Interest, Management fee, Royalty fee and Technical fee;
  • No Foreign Exchange Controls;
  • No stamp duty or GTS;
  • No import duty/Sales/Service Tax;
  • Ability to access more than 7’ Malaysian Tax Treaty partners;
  • 50% tax deduction for expatriate professionals/ managers’ employment;
  • 100% exemption for director’s fees for foreign directors;
  • No tax on dividends to shareholders;
  • Can apply for two years’ renewal multiple entry work permit to stay in Malaysia;

Features of Labuan IBFC

  • Highly flexible tax framework
  • Progressive legislative environment
  • Competitive pricing structure
  • Strategic location
  • Well-developed infrastructure with
  • satellite telecommunication
  • Political stability
  • Low cost of operation
  • Shares the same time zone with other
  • major Asian cities

Who qualifies?

Applicant should meet the following minimum criteria:

A licensed domestic money broker;

A Labuan company incorporated under the Labuan Companies Act 1990 (with money broking expertise); or

Any licensed institutions under the Banking and Financial Institutions Act 1989 with prior approval from Bank Negara Malaysia (Central Bank of Malaysia);

To have a good track record of financial performance, at least in the three years preceding the application; and

Committed to setting up a functional operation in Labuan.

Operational requirements

The applicant company:

Maintain a paid-up capital unimpaired by losses of at least RM500,000 (approx. US$120,000) or its equivalent in any foreign currency. Labuan FSA may also exercise its discretion to require additional capital to commensurate with the business operations of the Labuan money brokers, taking into account the risk profile as well as nature, scale, complexity and diversity of their business activities.

Maintain an operational office in Labuan. The operational office should be used for business purposes only and must be appropriately furnished with office equipment.

Ensure that the persons in controls, directors and principal officer meet the fit and proper person requirements as specified in the Guidelines on Fit and Proper Requirements issued by Labuan FSA. It is expected that the employees employed to transact in the money broking business are competent and possess sound knowledge of the services offered.

Ensure that the counterparties, i.e. principal broker and liquidity provider are regulated by a recognised supervisory or regulatory authority.

Labuan money broking business is intended to serve the institutional investors and high-net worth individuals. In this regard, the Labuan money broker is expected to impose a maximum leverage limit of 100:1 on its clients’ trading transactions that would translate to a minimum of 1% margin deposit to enable the opening of a trade position. For illustration purpose, assuming that the transacted volume is USD100,000, the minimum margin requirement will be equivalent to USD1,000.

For Labuan money broker’s business model/customer interface, which is exclusively or substantially electronic, proper management of technology risk must be in place:

– data/system security and arrangements for IT systems maintenance, resilience and support must be supported by a dedicated IT staff;

– notify Labuan FSA as soon as possible, upon discovery of any incident of system malfunction and intrusion; and

– a root cause and impact analysis report must be submitted to Supervision and Monitoring Department within 14 days or such longer period as the Authority may allow, from the discovery of the incident. The report shall contain:

– an executive summary of the relevant incident;

– an analysis of the root cause and the description of the impact of the relevant incident to the money broking business; and

– a description of the remedial measures taken to address the root cause and consequences of the relevant incident.

For Labuan money broker that undertakes Islamic money broking business, is required to appoint a qualified person to its internal Shariah advisory board to ensure that its management and operation are in compliance with Shariah principles. In this regard, the Directive on Islamic Financial Business in Labuan IBFC shall also be observed.

Why Global Premier?

What separates us from our competitors is that our services don’t end with the registration of your company. We offer a wide range of additional services others can’t or just won’t offer, such as lifetime free support.

Whilst most providers either specialise on personalized consultation at relatively high rates or run bulk registration factories without any support, we want to offer the positive aspects of both types.

Therefore Global Premier combines professional advice, worldwide registration services, reasonable fees, customized order processing, lifetime support and fast processing. Where others see company formation services as a bulk registration with no support and no individual assistance, we do care about your business needs.

Should you have any question or matter
You would like to discuss or clarify with us
Should you like to receive further Information
About our services and fees, …

Our multi-lingual team of business advisors is happy to assist you with all upcoming questions and issues in relation to your company.

You may call or email us, and we will be happy to assist you in a fast and efficient manner.

You can also come and visit us at our Limassol offices to discuss issues face to face if you prefer. Just arrange an appointment and we will be happy to meet with you.

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