Labuan Cryptocurrency Exchange License

Tetra Consultants assists our international clients to secure Labuan cryptocurrency Exchange license. The two available are cryptocurrency exchange license and cryptocurrency wallet license. Tetra Consultants will ensure our clients’ businesses meet all requirements and can legally conduct business inside and outside of Labuan.

Company Registration

2 Weeks

Local Director?

Yes

Bank Account Opening

4 Weeks

Travel Required?

No

Excellent

Based on 87 reviews

Labuan Cryptocurrency Exchange License

  • Before you proceed to apply for a Labuan cryptocurrency exchange license, Tetra Consultants advises you to read through this guide to fully understand the law and regulations governing such a license. Our team of licensing experts is well aware of the requirements and procedures to secure a Labuan cryptocurrency exchange license ensuring accurate advice to our clients.
  • Labuan, Malaysia, encourages those interested in establishing a legally acceptable Cryptocurrency Exchange in an offshore setting. Labuan considers itself a mid-shore rather than an offshore jurisdiction since it satisfies the requirements for dealing with both domestic and foreign markets.
  • Labuan is on the OECD’s white list due to its mid-shore structure. As a result, the cryptocurrency exchange license is justifiable, and bank account opening is permitted, allowing you to do business more smoothly throughout the world. Your cryptocurrency exchange corporation may be licensed through the fully compliant and white-listed Labuan Jurisdiction at a reduced operational cost under the Labuan Financial Services Authority (Labuan FSA). Companies are also advised to have a modern and competent KYC (know your client) compliance system in place for customer onboarding and maintenance.

Benefits of Labuan Cryptocurrency Exchange License

  • Crypto exchange/digital assets exchange platform allows you to transfer electronic money and cryptocurrencies. This gives a convenient opportunity to exchange different currencies; for example, you can exchange cryptocurrencies for cryptocurrencies, cryptocurrencies for fiat, and fiat for cryptocurrencies.
  • Market participants can pay for cryptocurrencies by credit card, e-wallets, and other methods of payment. It is possible to obtain an exchange license in Labuan and this has been in great demand since 2018.
  • In Labuan (Federal Territory of Malaysia), you get the opportunity to conduct business on the international market under 3% corporate tax and on the Malaysian market under 24% rate.
  • Fusang Exchange, a fully licensed Asian stock exchange, received full approval for the stock exchange from the Labuan FCA in 2019. In Labuan, great efforts are made to regulate exchanges and trade, in accordance with adequate AML and KYC standards in order to establish a sustainable business.
  • Under the applicable law, the exchange can freely operate in other jurisdictions which provides great convenience for entrepreneurs. Labuan is known for its affordable costs and good reputation and is popular with people who start new businesses.

Why is it worth getting a Labuan cryptocurrency license:

  • 100% foreign ownership, no need for a local partner
  • No management fees, pass-through interest taxes, technical fees, and royalties
  • Currency exchange is not controlled
  • No stamp duties, no VAT
  • No sales and service taxes, as well as import duty
  • There is no capital gain tax and inheritance tax.
  • There is access to over 70 Treaties on Avoidance of Double Taxation
  • Tax reduction for foreign managers and specialists at the rate of 50%
  • No taxes on director’s fees
  • There is no tax on dividends to shareholders
  • Malaysian 2-year work visa with the possibility of further extension

Qualifying Eligibility for a Labuan Cryptocurrency Exchange License

  • Individual or institution with cryptocurrency exchange expertise with a good track record and sufficient years of experience in the industry; or
  • A regulated cryptocurrency exchange or provider of such services from other jurisdictions with approval from home authority with the letter of consent; or
  • Any licensed institutions including approved cryptocurrency exchange under the Financial Services Act 2013 with approval from the Central Bank of Malaysia.

Regulatory and operational requirements for a Labuan Cryptocurrency License

Our team of experts advises you to read through the below-mentioned operational and regulatory requirements for acquiring a Labuan cryptocurrency exchange license:

  • There is a minimum paid-up capital requirement of MYR10,000,000 (or equivalent) unimpaired by losses with a certificate of evidence from the banks within Malaysia and Labuan.
  • You will be required to maintain an operational office in Labuan and all transactions must be done to, through, and from this Labuan local office to fulfill the minimum expenditure requirement.
  • You will be allowed to transact in foreign currencies of your choice, including Malaysian Ringgit (MYR)
    Accordingly, the transactions with Malaysian residents are permissible, including authorized dealers approved by the Malaysian Exchange Control
  • An incorporated secured system for the entity where the technology client interface is deployed, any intrusions or malfunctions of the systems including adverse incidents discovered must be reported to Labuan FSA on the root cause and an impact analysis report is to be submitted within 14 days.
  • The company must appoint an approved external auditor to carry out an audit of business operations annually.
    You are required to maintain a separate account for clients’ monies and each transaction is to be marked clearly. All withdrawals are to be reported within 3 working days. Along with the conditions of having the written agreements and contracts with clients and any party to be documented.
  • You are mandatorily required to adhere and comply with the AML/CFT Act and Guidelines issued by the Central Bank of Malaysia and Labuan Authority via the provision of a compliance officer.
  • In case of changes in shareholders, directors, office location, additional office outside Labuan, and outsourcing arrangements require prior approval from Labuan FSA.

Other regulatory requirements

Company structure

  • At least 1 shareholder (can also be a legal person, no nationality or residency restrictions*);
  • At least two directors (can only be natural person, no nationality or residency restrictions*).
  • A resident company secretary, will be provided by Tetra Consultants before advancing to the registration of Labuan company.

The local office is a mandatory requirement for companies looking to set up business in Labuan and the same will be provided by Tetra Consultants.

  • Local employees For companies to be incorporated in Labuan to conduct the operation as licensed cryptocurrency exchange businesses are mandatorily required to have a minimum number of local employees while also having to fulfill the condition of minimum annual operating expenditure in Labuan.

Company name

  • Letters: From the Roman alphabet
  • Company name must end with such suffixes or their abbreviations: Limited, Corporation,
  • Incorporated, Societe Anonyme, Sociedad Anonima. If the Malaysian word Berhad is used then it must be preceded by “(L)” to denote that the company is incorporated in Labuan
  • Names Requiring Consent or a Licence: Bank, buildings society, insurance, assurance, reinsurance, fund management, investment fund, trust, trustees, Chamber of Commerce, university, municipal or their foreign language equivalents

Restrictions on Company name

  • Restricted connections for a company name with the name of state, national or local government.
  • Any name that implies illegal activity or implies royal or government patronage is restricted.
  • The registrar is allowed to reject any name that it considers undesirable or contrary to the public interest.
  • A company name is restricted to identical or similar to an existing company name.
  • In case when a foreign language is used for the company name the translation must be provided to Registrar which will ensure conformity to the above-listed restrictions.

Taxation, accounting and audit requirements

  • The tax implication for a company registered in Labuan is considered as a charge of corporate tax at the rate of 3% of audited profits or a fixed price per year of MYR 20,000 (based on the company’s preference can be chosen one or the other.
  • Additionally, a Labuan Offshore Company needs to have an audit performed by an approved auditor. An annual return must be filed 30 days prior to the company’s anniversary date of incorporation. A set of accounting records must be kept in Labuan.

What is the procedure to get a Labuan Cryptocurrency exchange license?

Our team of experts advises you to read through the below-mentioned steps that take place during a typical course of engagement for obtaining a Labuan cryptocurrency license:

Step 1: Registration of Labuan entity

  • Tetra Consultants will begin the engagement with the process to register company in Labuan with the Labuan company formation authority. We expect to complete the registration process for the Labuan entity within 2 weeks.
  • Once the company is registered, Tetra Consultants will send you the Certificate of Incorporation, Memorandum and Articles of Association, and other corporate documents.

Step 2: Preparation of legal documents required for license application

  • Once the company is successfully registered, Tetra Consultants will prepare a business plan which describes the company’s operations and strategies.
  • Our legal and compliance team will also prepare the required AML/CFT procedures and internal policies such as technology risk management, corporate governance, regulatory reporting, and others. On average, this process takes around 3 weeks to complete.

Step 3: Meeting the local economic substance requirements

  • In order to meet the additional economic substance requirements, Tetra Consultants will assist you to rent a local Labuan office located in the Central Business District. This office has to be operational and fully furnished as regulated by Labuan FSA. Tetra Consultants’ legal team will prepare a lease agreement as per local Labuan real estate regulations, to be signed by all parties. Thereafter, you will pay monthly rent directly to the landlord.
  • In addition, Tetra Consultants will recruit at least 2 quality employees for your established company. Our services include conducting initial screening and interviews as well as preparing employment contracts as per Labuan employment regulations. You are only required to attend the final interview to pick the preferred candidate. Thereafter, monthly salaries are to be paid directly to your employees.
  • Tetra Consultants will assist the directors, principal officers, and controllers to secure ‘fit and proper’ status. During this process, these individuals will be required to provide enhanced KYC documents including no-criminal records.

Step 4: Corporate bank account opening

  • Tetra Consultants will proceed to open a local corporate bank account with a reputable Malaysian or international bank. Some of the banks we work with include RHB, Maybank, Standard Chartered, and OCBC. On average, this process takes around 4 weeks and you may be required to travel to Labuan for a face-to-face meeting. Once the account is opened, you will be required to deposit the initial paid-up capital into the corporate bank account.

Step 5: Submission of Labuan cryptocurrency license application to LFSA

  • With everything in place, Tetra Consultants will submit the Labuan cryptocurrency license application to Labuan FSA. After which, Labuan FSA may revert to asking for an interview with the directors, principal officer, and controllers.
  • Once satisfied, Labuan FSA will issue an in-principal approval together with a list of requirements to be met within a stipulated deadline. Some of these requirements include putting disclaimers on websites, injecting paid-up capital into a corporate bank account or providing additional KYC documents.
  • Once the above is completed, Labuan FSA will issue you the full Labuan cryptocurrency exchange license.

How much does it cost to obtain a Labuan Cryptocurrency exchange license?

  • The total engagement fee depends on the services you need from Tetra Consultants. We provide you with multiple services ranging from assisting you through the incorporation process of your entity in Labuan to obtaining the Labuan Cryptocurrency License. This total fee that will be charged will be inclusive of the Labuan company registration fee, license fee, and any additional cost that may arise.
  • We will discuss with you the total engagement fee charged in detail before we begin the registration process so that you have a better understanding of what you are paying for.

How much time does it take to obtain a Labuan Cryptocurrency exchange license?

  • Before the start of the engagement, Tetra Consultants will send you a project plan with the timelines stipulated for Labuan entity setup, drafting of documents as well as Labuan Cryptocurrency License application. This is to ensure that all parties are clear on the upcoming project.

Our services

  • Tetra Consultants is an international professional consultancy firm that specializes in the attainment of different offshore financial licenses including cryptocurrency license. We can assist you in obtaining a specific license or authorization from your selected jurisdiction like Labuan, to lawfully operate your cryptocurrency business. We provide licensing services in all major jurisdictions that have introduced advanced legislation regulating cryptocurrency activities.
  • Tetra Consultants will assist you with communications with the local regulatory authorities, and government officials throughout the whole course of the engagement.
  • In addition, Tetra Consultants can also assist with attaining other offshore financial licenses depending on your long-term business goals.

Find out more!

Contact us to find out more about how to secure a Labuan Cryptocurrency License. Our team of experts will revert within the next 24 hours.

Do I need to be physically present in Labuan to incorporate the Labuan Company?

  • Tetra Consultants strive to provide our international client zero to minimum traveling solutions as such you will not be required to travel to Labuan to get the entity registered and incorporated.

What are the minimum director and shareholder requirements for a Labuan company?

  • For a typical Labuan entity, there are the minimum regulatory requirements of one director who can either be an individual or a corporate entity and one shareholder who can either be an individual or a corporate entity.

What are the benefits of registering a business in Labuan?

  • Labuan is considered to be one of the important Asian investment locations. Labuan has become a prominent jurisdiction for attracting numerous investors and enterprises from all over the world in recent years. To conduct business in Labuan, Malaysia, investors, and enterprises will benefit from a variety of advantages, including cheap taxes, 100 percent foreign ownership, cost-effectiveness, and secrecy.

Who is the regulating authority of a Labuan cryptocurrency exchange license?

  • The Labuan Financial Services Authority (LFSA) is the body responsible for regulating the financial centers in the country.

Does a Labuan cryptocurrency entity require the appointment of a company secretary?

  • Yes, a Labuan registered entity contemplating conducting cryptocurrency business in the country is required to appoint a resident company secretary.






    Follow us on

    Address

    22 Sin Ming Lane #06-76 Midview City, Singapore 573969

    ©2010-2022 Tetra Global Consultants. All rights reserved.

    • Contact Us

      Contact Form

    • WhatsApp