Labuan Securities License

• Initially, our experts will assist you to register company in Labuan within 2 weeks, with a recommendation to incorporate an International Business Company (IBC).  

• For obtaining Securities Licenses we will set up a Labuan company with at least two directors without residency requirements and appoint 2 key personnel relevant to the investment adviser, fund manager, or securities company licensed in this sector and having all their necessary qualifications.  
• Under the Labuan Business Activity Tax Act requirement, every company must have at least two full-time employees based in Labuan. 
• Additionally, we can also provide you with nominee director and shareholder services for maintaining a local presence of your company in Labuan. 

• Subsequently, we will prepare all required documents for the filing and processing of obtaining a Labuan Securities License. We can help complete the form LSCM with a detailed business plan, including a description of your business, services proposed, target market, revenue projections, and company structure. We also attach compliance under Anti-Money Laundering and Anti-Terrorism Financing Act. The application will include: 
• Business particulars, detailing financial and human resources, as well as administrative facilities. 
• Statements providing the business address in Labuan and the contact details of the authorized representative. 
• A separate statement confirming compliance with the Anti-Money Laundering and Anti-Terrorism Financing Act. 
• Any other required information or documents as deemed necessary by the Financial Services Authority (FSA). 

• After filling out the application form and preparing all supporting documents, we will ensure that all financial requirements of Labuan for the Securities License are complied with. We will also facilitate in maintaining the minimum paid-up capital at RM150,000 or approximately US$35,000, or its equivalent in any foreign currency. Additionally, we will assist you in purchasing professional indemnity insurance too. 

• Furthermore, completed application forms and all other documents will be submitted to the Labuan FSA by our experts. Added to this, we will give a soft copy for your preliminary review to ensure that everything meets the necessary requirements before final submission. 

• Furthermore, completed application forms and all other documents will be submitted to the Labuan FSA by our experts. Added to this, we will give a soft copy for your preliminary review to ensure that everything meets the necessary requirements before final submission. 

• Upon receiving the Labuan Securities License, we can ensure your company complies with all requirements on operations and tax. This includes year-to-year coordination of audits with a certified auditor as well as an update of the changes to the structure, ownership, and key personnel of your company to the Labuan FSA. Moreover, Tetra Consultants also offer the most advanced tax registration services under our accounting and tax obligation support. 
• Under the Labuan Business Activity Tax Act, companies with a Labuan Securities License are considered Labuan Trading Companies and pay corporate tax at 3% on audited net profits. Companies must meet the requirements regarding substance in order to continue enjoying this preferential tax rate. We will help you through these regulations and ensure that you not only comply but also optimize your tax position. 

• Once your business is registered, we will proceed with a corporate bank account opening through which you will be able to have a bank account for your business in 4 weeks after incorporation. 

Documents required to acquire Labuan Securities License 

• Business Plan: A comprehensive document covering: 
• Business objectives 
• Types of services to be provided 
• Target market 
• Budget forecast and revenue projections 
• Workforce details and equity structure 
• CV/resumes of key personnel including educational qualifications and relevant experience. 
• Two reference letters for each key personnel 
• Financial resources statement 
• Documentation confirming the company has a minimum of two directors. 
• Statements confirming compliance with: 
• The Anti-Money Laundering and Anti-Terrorism Financing Act 
• Any other relevant legal requirements 
• Operational details such as place of business in Labuan, including the name and address of the authorized representative. 
• Proof of a professional indemnity insurance policy 
• Notarized copy of identification document for directors and shareholders. 

Qualifying eligibility for Labuan Securities License 

• The eligibility for a Labuan Securities License is primarily focused on the qualifications of individuals involved in the management of the licensee, including directors, shareholders, and UBOs, ensuring that the company is run by competent and experienced personnel. 

Degree or skilled qualification:  

• Any degree or skilled qualification in fund management. However, the Labuan FSA may consider applicants possessing a diploma in any discipline and having relevant experience of at least three years in capital markets or direct fund management activities. 

International certification:  

• An associate or approved fund manager from a jurisdiction or country, a member of the International Organization of Securities Commissions. 

Experience based eligibility:  

• A person who does not fit within the above two categories may still be eligible, if fund management activities are in fact carried out and managed by highly qualified and experienced persons. 

Regulatory requirements for businesses to obtain Labuan Securities License 

• Minimum of 2 director of which one must be local. The local director must be a resident of Labuan or a country that is a member of the International Organization of Securities Commissions (IOSCO) to ensure compliance with local regulations. 
• At least 1 shareholder without residency requirements. 
• At least 2 local personnel as employees of the company. 
• At least 1 local company secretary. 
• The company must maintain a registered office in Labuan. 
• The minimum paid-up capital required is RM150,000 (approximately USD35,000). 
• Companies are required to have a professional indemnity insurance policy with a minimum coverage of RM1million (RM 1,000,000) to protect against potential liabilities arising from their business activities. 

Taxation system for Labuan Securities License 

The taxation system is governed by the Labuan Business Activity Tax Act 1990 (LBATA), which oversees the imposition, assessment, and collection of taxes on business activities conducted in, from, or through Labuan. 

• Labuan Business Activities: Entities carrying out business activities in Labuan are taxed under LBATA, which provides a favorable tax regime for licensed business operations. 
• Non-Labuan Business Activities: If a Labuan entity engages in activities outside of Labuan, it falls under the Malaysian Income Tax Act 1967 (ITA), which subjects it to Malaysian tax regulations. 

Taxation policy for Labuan Securities License 

Corporate tax rate: 

• A Labuan Securities License sets the company on the very attractive taxation policy ground, which includes a corporate tax rate of only 3% on audited consolidated net profits. The rate is notably low compared with most other jurisdictions, making Labuan quite an attractive choice to conduct business in. It reduces the tax burden, hence making Labuan more attractive as a financial hub and makes it easier for companies to gain a competitive edge in managing their tax liabilities. 

No Withholding Tax: 

• The Labuan taxation policy is very conducive, with no withholding tax on dividends, interest, or royalties. In other words, it accommodates easier and more cost-effective repatriation of profits, thereby facilitating the transfer of funds to the shareholders or for reinvestment without additional tax charges. This very favorable condition greatly enhances Labuan’s appeal as a financial center by reducing the overall tax impact on profit distribution and financial transactions. 

Exemptions from other taxes: 

• Wide-ranging tax exemptions are available to licensees in Labuan. These include nil stamp duty, import duty, sales tax, capital gains tax, or inheritance tax. This significantly reduces the effective tax liability for a business and makes Labuan one of the most attractive locations for financial activities. 

Cost of acquiring Labuan Securities License 

• At Tetra Consultants, the cost of obtaining a Labuan Securities License is tailored to your specific needs and the scope of services required. Our all-inclusive external user engagement fee covers every aspect from the initial company formation to the license application, including any additional fees that may arise during the process. We will conduct thorough consultations to provide a detailed breakdown of the total engagement fee before commencing registration.  
• This approach ensures full transparency, with all costs clearly outlined in our letter of appointment. By doing so, we aim to facilitate a smooth and well-informed licensing process for your business, ensuring clarity and confidence throughout the entire journey. 

Looking to obtain Labuan Securities License 

Contact us to know more about Labuan Securities License and our team will revert back in 24 hours. 

With Tetra Consultants by your side, registration at the very inception to ongoing compliance can let you make sure of proper guidance at each step in obtaining the Labuan Securities License. We provide end-to-end services for hassle-free application and ensuring regulatory compliance.  

Besides licensing, we have a full complement of business solutions ranging from digital marketing and SEO services to regulatory compliance consulting, visa application international trademark registration, and many more. Partner with us in leveraging our expertise and letting us make your operations lean and agile for success in Labuan’s financial sector and beyond. 

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