LABUAN SECURITIES LICENSE

Labuan securities license is meant for individuals offering valuable investment advice or administrative services in respect of securities for purpose of investment and dealing in securities. For a Labuan Islamic securities license, its operations shall comply with Shariah principles.

LABUAN SECURITIES - Labuan Securities License

KEY ADVANTAGES OF A LABUAN SECURITIES LICENSE


  • 3% corporate tax on net audited profits
  • NO Withholding Tax
  • NO Stamp Duty / Import Duty / Sales Tax
  • NO Capital Gain Tax and Inheritance Tax
  • Ability to access to more than 70 Malaysia Tax Treaty partners
  • 50% Personal Tax Exempt for expatriate professionals
  • 100% tax Exemption for Director’s Fees received by Expatriate Directors
  • NO tax on Profit distribution to Shareholders via Dividends

Note: All activities carried out by a licensed Labuan Securities Company are deemed as Trading activities with after net profit corporate tax of 3% as per audited account. There will be no tax if there is loss incurred, auditing of the financial account is still required.

Labuan Securities License Permitted Activities


A. Investment Advisory

  • Conducting securities analysis and making investment recommendations based on client’s investment objectives and financial situation
  • Providing advice concerning securities including the issuance or promulgation of research report and analysis
  • Providing consultancy and advisory services relating to corporate finance and financial planning matters for corporate clients

B. Administrative Services

Making submissions on behalf of clients to Labuan FSA in respect of securities including any other reporting requirements including issuing any documents which are deemed to be a prospectus.

C. Dealing in Securities

  • Quoting two-way prices and dealing in securities
  • Arranging for the sale or purchase of securities including that are not listed on a stock market of a stock exchange, issued by, belonging to or on behalf of clients
  • Underwriting of securities and placement out of such underwritten securities to be commensurate with the adequacy of its financial resource
  • Other dealing in securities as may be permitted by Labuan FSA from time to time

Qualifying Eligibility for Labuan Securities License


  1. An individual who holds a relevant degree or professional qualification to carry out fund management activities. Labuan FSA may also consider an applicant with at least a minimum qualification of diploma holder and three (3) years relevant experience in capital market or direct experience in fund management activities;
  2. An approved fund manager or any provider of such services from a country or jurisdiction who is a member of the International Organization of Securities Commission (IOSCO);

OR

3. A person who does not fulfill paragraph (1) and (2) may also be considered, provided that the fund management activities are run and managed by suitably qualified and experienced individuals.

Important Documents Required for Labuan Securities License Application


  1. A three (3) years Business Plan covering the business objectives, types of services to be provided, target market, financial forecast, revenue projections and manpower, including the equity structure of the company in regards to the percentage of shareholding and operational strategies
  2. Resume of all keys personnel with education certificates
  3. Two (2) Reference Letters for each key personnel and relevant documents to validate profile is fit and proper
  4. Personal financial statement to evidence the existence of adequate financial resources for the sustainability of the business
  5. Must have at least two (2) directors in the company

Note: subject to the merit of each application, additional information and documents may be requested by Labuan FSA to facilitate the processing of the application

Regulatory and Operational Requirements for Labuan Securities License


  1. To maintain a paid-up capital of at least MYR 150,000 or its equivalent in any foreign currency throughout its operations. In addition, based on the securities licensee’s risk management assessment, additional capital may need to be injected to commensurate its risk profile as well as the nature and complexity of its business
  2. To maintain a professional indemnity insurance policy with coverage of not less than MYR 1 million or its equivalent in any foreign currency throughout its operation
  3. Must maintain an operational office in Labuan and all transactions must be done to, through and from Labuan. May establish a marketing office in Kuala Lumpur and/or Iskandar Johor, Malaysia
  4. To ensure compliance and duties of a Labuan fund manager is in place including segregation of client’s assets
  5. To establish adequate internal policies and procedures for its operations, compliance, internal controls, corporate governance, and risk management, including its business continuity plan. These have to be regularly reviewed to ensure they remain appropriate, relevant and prudent
  6. To ensure proper policies and procedures are in place to ensure a sound compliance framework safeguarding clients’ interests
  7. To appoint an approved auditor to perform an annual audit of accounts and to be submitted within 6 months after end of each financial year
  8. To conduct business in any foreign currencies including Malaysian Ringgit (MYR)
  9. To ensure its risk management plan clearly sets out the extent of financial requirements to sustain its operational business based on the risk appetite or tolerance levels in relation to the fund management strategies. This has to be reviewed on a yearly basis in line with its business plan
  10. To obtain prior approval from Labuan FSA on changes of its identity, place of business or office in Labuan or outside Labuan, ownership, and shareholding of the fund manager
  11. To notify Labuan FSA in writing of any amendments or alterations to any of its constituent documents, or business plan within thirty (30) days of the changes put into effect
  12. To take reasonable care to organise and control its affairs responsibly and effectively by having an adequate risk management and supervisory system in place
  13. To establish proper compliance to ensure business complies with the relevant directives, guidelines and reporting requirements issued by Labuan FSA from time to time
  14. To ensure compliance with the Anti-Money Laundering and Anti-Terrorism Financing Act 2001 and Guidelines on Anti-Money Laundering and Counter Financing of Terrorism relevant to Labuan IBFC

Application Timeframe


  1. Approximately 30 to 60 days, subject to further information and supporting documents required by Labuan FSA during the approval process
  2. Interviews / Meetings with the key personnel may be requested by the Labuan FSA to understand or clarify certain processes

Annual Fees


Annual License Fee MYR 5,000
Marketing Office Fee
(optional)
MYR 7,500

The Annual License and/or Marketing Office fee is payable upon approval and valid up to 31st December. For subsequent years, fees are to be paid on or before 15th January of each calendar year.

STEPS to Apply for A Labuan Securities License


HOW CAN I GET STARTED - Labuan Securities

QX TRUST, your one-stop Trust Company in Labuan!


QX TRUST license application service level for Labuan Securities license include:
  • Consultation on client's eligibility and application procedures
  • Feasibility study write-up based on client's profile
  • Due Diligence, Profiling and Guidance on documents preparation
  • Construct exclusive Business Plan to meet client's business objectives
  • Preparation of Financial Forecast, KYC, Operation and AML/CFT Manuals, Client Agreements etc
  • Submission and supervision of application process until approval
  • Act as liaison and key contact person for both client and Labuan FSA on all correspondences, meetings and /or interviews (if any)