Labuan Financial Licenses

Money Broking Licenses:

Money broking business is defined as the business of arranging transactions between buyers and sellers in money or foreign exchange markets with brokers acting as an intermediary in consideration of brokerage fees paid or to be paid but does not include the buying or selling of foreign currencies by the broker as a principal in such markets.

Entry Requirements:

Applicant should meet the following minimum eligibility criteria:

• A licensed domestic money broker;
• A Malaysian offshore company incorporated in the Companies Act 1990 (with money broking expertise);
• Any licensed institution under the Banking and Financial Institutions Act 1989 with prior approval from Bank Negara Malaysia;
• Has 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 the Malaysian offshore region.

Application Requirement:

The submission should include, but is not restricted to, the following:

• Undertaking letter from the head office/parent company to undertake any liability arising from the operations of its branch or subsidiary in the Malaysian offshore region;
• The controller or director or Chief Executive Officer and the directors of the board of the applicant company must be fit and proper persons. Prior written approval of Malaysian offshore Financial services authority must be obtained for the appointment;
• A business plan detailing the operations and strategies of the applicant;
• Audited financial statements for the last two years, if applicable;
• A signed declaration by directors and senior staff of the applicant on confidentiality and secrecy;
• The applicant must have a paid-up capital of RM500,000 (unimpaired by losses) or its equivalent in any foreign currency (circa US$105,000); and any other information that is relevant to the application.

Operational Requirements:

The applicant:

• must inform the Malaysian offshore Financial Services Authority of any changes in its shareholding structure and/or any erosion of paid-up capital;
• must maintain a physical presence in the Malaysian offshore region. All dealings must be done through this office in the offshore region;
• Should maintain sufficient staff along with a center manager.
• can only transact business in foreign currency and not deal in ringgit except for the purpose of defraying administrative and statutory expenses;
• is prohibited from dealing with residents other than authorized dealers as specified under section 4 of the Exchange Control Act 1953;
• is required to appoint an auditor; and
• must notify the Malaysian offshore Financial Services Authority of any amendments or alteration to any information in its constituent documents.

A Malaysian offshore Company involved in money brokering is deemed a Trading Company under Section 2 of the Malaysian Business Activity Tax Act, hence the company has a yearly election of paying 3 percent of audited net profit.

Checklist for Applications:

Documents required:

2 years forecast financial statement (i.e. income statement & Balance sheet)

A detailed business plan, which covers:

• Business objective
• Types of services/Products
• Target Market
• Target industry/sector
• Territorial scope (indicate percentage) (i.e. Singapore 50%, Indonesia 50% etc).
• Strategic plan
• Risk Management and internal control process
• Manpower planning
• Marketing strategy
• Particular of internal control and compliance officer
• Proposed financial year end and accounting standard
• Any other relevant supporting documents/information
• Group shareholding structure

Directorship & Shareholding:

For Natural/Individual person:

• Malaysia Identity card/Passport (for a non-Malaysian)
• Address proof (i.e. most recent utility bill, less than 3 months old)
• Educational proof
• Recent year’s tax return filed in the respective country of domicile
• Proof of capital availability through a bank statement of shareholder

For Body Corporate:

• Certificate of incorporation
• Memorandum and Article of Association
• Latest annual return (if any)
• Recent three years audited account
• Director resolution-Investment into the offshore entity
• Director resolution-Corporate Representative