Labuan
Money Broking License

Labuan
Money Broking License

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

Issued and Regulated by Labuan Financial Services Authority (“Labuan FSA”)

Why Choose Labuan
Why Choose Labuan
Global Opportunities
Access to an international network of buyers and sellers in the money and foreign exchange markets.
Tax Advantages

Favorable tax incentives, including low tax rates or exemptions, for money broking activities in Labuan..

Strong Regulatory Framework
Compliance with international standards and oversight from the Labuan Financial Services Authority (Labuan FSA).
Confidentiality and Privacy

Strict confidentiality laws and a focus on protecting client information and data privacy.

Allowed Money Broking Activities

Allowed Money Broking Activities

In carrying on the money broking business, the licensee is expected to:
  • Bring together the counterparties on mutually acceptable terms for the same financial products in money or foreign exchange market to facilitate the conclusion of a transaction;
  • Receive payment for its service in the form of brokerage or commission fees. The fees charged must be adequate and appropriate; and
  • Act as a mediator and strictly not permitted to act as a principal.

Requirements

Operational Requirements

  • Maintain a paid-up capital unimpaired by losses of at least RM 500,000 (~EUR 50,000) 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, considering 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;
  • Establish an adequate set of internal policies and controls for its operations, compliances, corporate governance and risk management. These need to be regularly reviewed to ensure that they remain appropriate, relevant and prudent;
  • Ensure that the counterparties, i.e. principal broker and liquidity provider are regulated by a recognized 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 USD 100,000, the minimum margin requirement will be equivalent to USD 1,000;
  • Appoint a Labuan approved auditor to carry out an annual audit of its accounts in respect of the business operations pursuant to Labuan Financial Services and Securities Act (“LFSSA”) and Labuan Islamic Financial and Securities Act (“LIFSSA”);
  • Ensure compliance with the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 and the Guidelines on Anti-Money Laundering and Counter Financing of Terrorism – Banking sector issued by Labuan FSA;
  • Maintain adequate and proper records and books of accounts in Labuan as required by the Directive on Accounts and Record-keeping Requirement for Labuan Entities issued by Labuan FSA. Its name and company number must be clearly indicated on its letterhead, stationery and other documents; 

Obtain prior approval from Labuan FSA on the following matters:

  • Change of ownership and shareholding structure;
  • Appointment of its directors and principal officer;
  • Change of its place of business or office in or outside Labuan and business plan;
  • Establishment of additional office; and any outsourcing arrangement.
  • 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.

Reporting Requirements

Labuan money brokers are required to submit to Labuan FSA the following:

  • One (1) hardcopy and one (1) soft copy of its audited financial statements within six (6) months after the closure of each financial year;
  • Statistics and information as Labuan FSA may require from time to time.

Requirements For Directors and Shareholders

1. Director CVs;

2. Director Academic & Professional certificates;

3. 2 Director References (Name, address, contact and occupation);

4. Director Bank reference;

5. Director Passport copy and proof of address (Certified);

6. Bank reference letter;

7. For Shareholders: 3 months Bank statement with enough funds to cover the capital requirement.

If a company is a director or shareholder then we would require the following:

1. Certified copy of Certificate of Incorporation;

2. Certified copy of Memorandum and Articles ;

3. Certified copy of Register of Directors/Members

Reporting Requirements

Labuan money brokers are required to submit to Labuan FSA the following:
  • One (1) hardcopy and one (1) soft copy of its audited financial statements within six (6) months after the closure of each financial year;
  • Statistics and information as Labuan FSA may require from time to time.

Process of License Obtaining

Process of
License Obtaining

  • I
    Phase I Collection of Information
  • 1. Due diligence and KYC checks.
    2. Name check at the Financial Services Authority (FSA).
  • II
    Phase II Preparing Application Forms, Drafting and Compiling Documentation & Reviewing of Application
  • 1. Providing client with the information, documents and requirements for applying for a Labuan Money Broking License.

    2. Assisting client in answering questions about the application process and requirements for a Labuan Money Broking License and

    3. Filling by the client the application and questionnaires. After client fills the form, they are to send to us. Scanned copies to be approved prior to sending the originals.

    4. Reviewing, suggesting amendments to finalize the application form and questionnaires.

    5. Identifying the Labuan Money Broking License functionaries where required.

    6. Drafting the Memorandum and Articles of Association of the Company.

    7. Sending the client the Memorandum and Articles of Association for client’s review and confirmation. Upon confirmation this will be signed by local agent as the Subscriber.

    8. Filing the application documents at the FSA.

  • III
    Phase III Filing Application with the Labuan FSA
  • Once the application is ready, filing it with the FSA together with the requisite fees takes place.

  • IV
    Phase IV Follow up and liaising with FSA
  • Follow up with FSA, attending to any queries until the outcome of the application is given by FSA.

Requirements

Requirements For Directors and Shareholders

1. Director CVs;

2. Director Academic & Professional certificates;

3. 2 Director References (Name, address, contact and occupation);

4. Director Bank reference;

5. Director Passport copy and proof of address (Certified);

6. Bank reference letter;

7. For Shareholders: 3 months Bank statement with enough funds to cover the capital requirement.

If a company is a director or shareholder then we would require the following:

1. Certified copy of Certificate of Incorporation;

2. Certified copy of Memorandum and Articles ;

3. Certified copy of Register of Directors/Members

Annual Renewal

Setup Fee

weform Service Service
weform Cost Cost

Professional and License Fee:

  • Drafting of offering memorandum;
  • Drafting of business plan;
  • Drafting of subscription agreements, redemption agreements;
  • Collation, preparation review and filing of License application documents;
  • License fees;
  • Assistance with initial set up in Labuan and liaising with regulator and other service providers.
€ 25, 000

Labuan Company Set- up Fees

€ 3, 500

Government Fees: Labuan Money Broking License Application fees

€ 400

Government Fees: Labuan Money Broking License fees

€ 1, 600

Provision of a Registered Agent, Office and Resident Secretary

€ 2, 800

Legal Advisor Consent Fees

€ 6, 500

Assistance with Bank Account Opening (Corporate Account)

€ 3, 500
Total € 43, 300

Annual Renewal

Monthly Maintenance

weform Service Service
weform Cost Cost

Provision of operational office fit for FSA approval

€ 1, 500

Provision of two (2) local employees as per Labuan Business Activity Tax Regulations 2018 (EUR 1,500 per employee)

€ 3, 000

Total

€ 4, 500

Annual Renewal

Annual Renewal

weform Service Service
weform Cost Cost

Professional and Legal Fees for Annual Maintenance Fees

€ 7, 000

Government Fees: Annual License Renewal Fees

€ 1, 600

Company Annual Fees

€ 2, 100

Provision of a Registered Agent, Office and Resident Secretary

€ 2, 800

Provision of a Registered Agent, Office and Resident Secretary

€ 6, 300

Total

€ 19, 800

Annual Renewal

Additional Services

weform Service Service
weform Cost Cost
Bank account opening assistance* € 2, 000
E-money account opening assistance* € 2, 000
Card payment solution opening assistance* € 1, 500
Legal opinion (depending on the complexity of the request) from € 3, 000
Additional consulting, partner, hourly rate € 400

Additional consulting, associate or consultant, hourly rate

€ 150

*Excluding provider’s fees, setup, compliance costs if any.

Costs and Timelines

Timeline

FSA’s suggested timeline for the outcome of the application is 12 – 16 weeks post submission of the application. The timeline also depends on the workload of FSA and any clarifications and queries that FSA may request in relation to the application.
Key personnel may be required by the Labuan FSA to attend interviews.

Gain a comprehensive understanding of costs and timelines by downloading our informative PDF.
Find all the essential details and empower yourself to make informed decisions.

Ready to capitalize on the benefits of Labuan Money Broking License?

Begin your licensing process effortlessly with our user-friendly online application. Or schedule a call to speak directly with our experts to discuss your goals, requirements, and start your journey towards success.