Labuan Securities License

Unlock success with a Labuan Securities License! Tetra Consultants offers a comprehensive suite of services as your one-stop solution. From company incorporation and offshore financial licenses to compliance solutions and international trademark registration, we handle it all. Trust us to streamline your business setup and ensure seamless operations. Partner with us today! 

Company Registration

2 Weeks

Local Director?

No

Bank Account Opening

4 Weeks

Travel Required?

No

Excellent

Based on 87 reviews






    Labuan Securities License 

    • The Labuan Securities License, established by the Labuan Financial Services Authority (FSA) and effective from 1 January 2014, is an arrangement provided to an individual or company engaging in providing investment advice or administrative service on securities. Operations of the Islamic securities licensee shall adhere to Shariah precepts and rulings.  
    • Unlike a Labuan fund manager, a securities licensee is not authorized to hold any money or assets for clients. The financial sector in Labuan is governed by the Labuan Financial Services and Securities Act 2010, which administers banking, money broking, financial business, insurance, and leasing activities.  
    • Any investor who intends to conduct any business in the investment market of Labuan must apply for and be approved to have a securities license. The Labuan jurisdiction has demonstrated a friendly tax environment, with an effective registration process to make it attractive to foreign investors. Our team can help you with securing securities licenses and guides on how to register company in Labuan quickly and hassle-free. 

    Advantages of obtaining Labuan Securities License 

    Advantages of obtaining Labuan Securities License

    Tax benefits 

    • The Labuan offshore company itself offers huge tax benefits to attract businesses. Most notably, it maintains a very low corporate tax rate that sits at 3% of audited consolidated net profits. Other than this benefit, a firm will not have to bear other taxes, including withholding tax, stamp duty, import duty, sales tax, capital gains tax, and inheritance tax. 
    • The personal income tax for qualified expatriate professionals is reduced by 50%. Moreover, an expatriate director does not need to pay any tax on his or her director’s fees. The incentives provided in relation to the above significantly enhance Labuan’s financial efficiency and make it more attractive to operate within. 

    Market access and credibility 

    • A Labuan Securities License opens access to key markets while boosting business credibility. A licensed company in Labuan is granted access to the dynamic financial markets of Labuan and is authorized to undertake a myriad of activities related to securities. The access allows companies not only an entrance into very lucrative opportunities but also a heightened reputation.  
    • Increased credibility with investors, counterparties, and regulatory authorities instills confidence and assures feelings of trust in the business. Beyond that, Labuan will also be an effective gateway to the regional and international expansion of markets, allowing firms to leverage this strategic location and friendly business environment in their effort to reach out to more markets and grow globally. 

    Streamlined operations 

    • A Labuan Securities License grants legal authorization to companies to undertake a wide range of securities-related activities, thus making operations simple in business. Such approval certainly does mean that businesses run within a defined framework of the law, reducing administrative hurdles and allowing management of operations more efficiently.  
    • The license eliminates uncertainties likely to be encountered in business management by clarifying the requirements of the regulating environment. Due to this, businesses are more confident about focusing on core activities because of an assurance of compliance and a better approach toward the smooth management of their operations. 

    Regulatory oversight 

    • Under the Labuan Securities License, business activity is conducted under the very strict supervision of Labuan Financial Services Authority (FSA) to ensure compliance with the relevant laws and regulations, and particularly with the international best practices. This means it must adhere to the most stringent regulatory compliance standards for maintaining operational integrity and upholding industry benchmarks.  
    • This license further fortifies governance aspects through the responsive adoption of regulatory supervision and strengthens risk management practices through robust internal controls. Thus, a much safer and cleaner operational environment is achieved by firms, which protects them from potential risks and enhances confidence among the stakeholders. 

    Regulatory Authority for Labuan Securities License 

    • The License is regulated by the Labuan Financial Services Authority, known as Labuan FSA. It is established under the Labuan Financial Services and Securities Act 2010, LFSSA. This act lays down the groundwork for the legal framework supporting the securities industry in the Labuan International Business and Financial Centre, Labuan IBFC. It includes all financial services—banking, insurance, and securities activities. 

    Some of the key regulations include: 

    Labuan Financial Services and Securities Act 2010 (LFSSA): 

    • This act gives the legal basis for the licensing and regulation of financial services in Labuan, including relevant securities activities. 

    Guidelines on the Establishment of Labuan Securities Licensee:  

    • These are guidelines issued by the Labuan FSA, setting out the requirements to be satisfied before the grant of a securities license. They deal with such matters as the qualifications of the applicant and operational and compliance obligations in general, with specific provisions for Islamic securities licensees pertaining to the application of Shariah precept principles. 

    Anti-Money Laundering and Anti-Terrorism Financing Act 2001:  

    • Licensees are to act in a way to comply with this Act, which makes it imperative that the licensee, within their operational framework, embed measures against money laundering and financing of terrorism. 

    Permitted activities under Labuan Securities License 

    Investment advisory 

    • This license allows a corporation to conduct the analysis of securities and make investment recommendations to clients’ objectives and financial situations. This includes advice on securities and dissemination of research reports and analysis. Other activities which shall be involved by the licensed entity include consultancy and advisory services in corporate finance, budget planning, and others for corporate clients. 

    Administrative services 

    • A Licensee may submit the following, on behalf of their clients, to the Labuan FSA with regard to securities and other reporting requirements which includes, undertaking the preparation and issue of necessary documents, including prospectuses, in compliance with the regulatory framework. 

    Dealing in securities 

    • A Labuan Securities Licensee may make two-way quotes and undertake the necessary arrangements relating to the sale or purchase of securities on behalf of or for the benefit of clients issued but not listed on any stock exchange. Also, a licensee may sponsor securities and underwrite their placing if such activities are within the means of the company’s financial standing. The license also authorizes regular dealing in securities if the Licensed Person continues to adhere to rules and regulations issued by Labuan FSA. 

    Time required to obtain Labuan Securities License 

    • The time required to obtain a Labuan license typically ranges around 6-7 months, depending on the completeness of the submitted documents. This would involve the steps of incorporating a local company in 2 weeks after which we will be submitting an application to the Labuan Financial Services Authority together with detailed business information, legal compliance documents, and other data which may be called for.  
    • The applicants must demonstrate relevant experience and expertise with at least three years of minimum exposure in the capital markets or fund management sectors. Also, we provide a registered auditor to undertake an annual audit performed with reports submitted within six months after the completion of a fiscal year. 
    • In addition, we offer services related to corporate bank account opening, with which you will get a bank account in 4 weeks after the company is well incorporated. Planning is therefore very critical, as Tetra Consultants reckons the entire process, inclusive of company registration and setup, can be completed within 6-7 months to avoid delays. 

    Procedure to obtain Labuan Securities License 

    Procedure to obtain Labuan Securities License 

    Step 1: Deciding on to the legal structure 

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

    Step 2: Fulfill company requirements 

    • 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.  

    Step 3: Application and documents preparation 

    • 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). 

    Step 4: Comply with financial requirements 

    • 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. 

    Step 5: Comply with operational requirements 

    • 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. 

    Step 6: Submission of the application 

    • 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. 

    Step 7: Compliance and maintenance  

    • 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. 

    Step 8: Corporate bank account opening 

    • 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 

    • 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 

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

    FAQ

    Who can apply for a Labuan Securities License?

    • Individuals with a relevant degree or professional qualification, or those with a diploma and at least three years of experience in capital markets or fund management, are eligible. Licensed professionals from IOSCO member jurisdictions can also apply.

    What are the capital requirements for obtaining a Labuan Securities License?

    • Applicants must maintain a minimum paid-up capital of RM150,000 (approximately US$35,000) throughout their operations.

    Are there residency requirements for directors?

    • Yes, at least one director must be a resident of Labuan or a member country of the International Organization of Securities Commissions (IOSCO).

    What insurance coverage is required?

    • License holders must have a professional indemnity insurance policy with a minimum coverage of RM1million (or its equivalent in foreign currency).

    How long does the application process take?

    • The process typically takes 6-7 months, depending on the completeness of the documentation and any inquiries from the Labuan Financial Services Authority (FSA).

    What are the ongoing compliance requirements for license holders?

    • License holders must conduct annual audits, maintain proper records, and comply with the Anti-Money Laundering and Anti-Terrorism Financing Act, among other regulations.

    What are the tax benefits associated with the Labuan Securities License?

    • Companies benefit from a 3% tax on net profits, no withholding tax, and exemptions from capital gains tax, inheritance tax, and stamp duty.

    Can a company operate without a physical office in Labuan?

    • No, a registered office in Labuan is required, and business activities must be conducted from this location.

    Is there an annual fee for the Labuan Securities License?

    • Yes, the annual license fee payable by January 15 each year following the year of approval.






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