Not All Financial Licenses Were Created Equal – The Great Advantages of Labuan

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When considering a global financial operation aiming to reach greater audiences, jurisdictions like Mauritius and the Seychelles always take the lead, quite justly, in the global financial scene where these cater to the diverse needs of investors and businesses. There is however another option to consider when setting up a global financial operation – in the Federal Territory of Labuan.

Labuan, an international business hub and financial center located off the coast of Malaysia, has emerged as a prominent destination for global investors seeking favorable regulatory environments. With its robust legal framework and strategic location, Labuan offers a range of highly reputable financial licenses that cater to diverse investment needs. There are several licenses allowing an array of financial activities but we will delve into the benefits of three main ones – Fund Manager License, Money Broking License, and Securities License – and explore how they provide its holders with unique advantages.

 

Fund Manager License

The Fund Manager License in Labuan is a gateway for investment professionals looking to manage funds for clients globally. One of the primary advantages of obtaining a Fund Manager License in Labuan is the ease of access to international markets. With this license, fund managers gain the flexibility to structure and manage various types of investment funds, including mutual funds, hedge funds, and private equity funds.

Labuan’s regulatory framework offers a streamlined process for obtaining a Fund Manager License, making it an attractive choice for professionals seeking efficient regulatory procedures. The jurisdiction’s commitment to international standards ensures that licensed fund managers adhere to best practices, instilling confidence in investors and creating a conducive environment for fund growth.

Furthermore, Labuan’s tax incentives play a role in attracting fund managers. Income derived from fund management activities is subject to a low and fixed tax rate, providing a competitive edge for fund managers compared to other jurisdictions.

The Fund Manager license permits to engage in the management and administration of investment funds, including portfolio management, investment advisory, and related activities. Fund Managers may apply for an extension to become a Crypto custodian as well. 

Mandatory Requirements

Share Capital of 75,000 USD

Minimum 2 directors with 4 years’ experience regardless of nationality (doesn’t have to be local)

Local office in Labuan with a minimum 2 staff members

 

Money Broking License

Labuan’s Money Broking License is designed for entities engaged in foreign exchange and money market activities. This license offers a range of benefits, making Labuan an ideal hub for financial intermediaries and forex brokers.

One significant advantage of the Money Broking License is the ability to tap into Labuan’s network of double tax treaties. This provides favorable tax treatment for money broking activities and enhances the overall cost-efficiency for licensed entities. The jurisdiction’s commitment to financial innovation and technology also supports money broking businesses, enabling them to leverage cutting-edge solutions for enhanced efficiency and competitiveness.

Moreover, Labuan’s regulatory framework ensures a robust and transparent environment, fostering trust among market stakeholders. The Money Broking License empowers entities to facilitate currency trading activities, attracting a diverse range of clients seeking a secure and regulated platform for their financial transactions.

Money Brokers in Labuan are permitted to conduct foreign exchange and money market transactions, acting as an intermediary between buyers and sellers of currencies or money market instruments. 

Mandatory Requirements

Share Capital of 150,000 USD

Minimum 2 directors with 4 years’ experience regardless of nationality (doesn’t have to be local)

Local office in Labuan with a minimum 2 staff members

Needs to integrate with a third party licensed liquidity provider and a trading platform with minimum 3 years of good financial records.

Securities License

The Securities License in Labuan is tailored for entities engaged in the issuance, dealing, or management of securities. Labuan’s Securities License is a testament to the jurisdiction’s commitment to providing a comprehensive and reputable financial services ecosystem.

A key advantage of the Securities License is its applicability to various financial instruments, including equities, bonds, and derivatives. This versatility allows license holders to engage in a wide spectrum of financial activities, catering to diverse investor preferences.

Labuan’s Securities License also benefits from a streamlined approval process and a business-friendly regulatory environment. This expedites the establishment of securities-related businesses and promotes market efficiency. Additionally, the jurisdiction’s strong legal framework ensures investor protection and market integrity, creating a conducive environment for securities activities to thrive.

Securities’ license holders in Labuan are permitted to engage in activities related to the dealing, underwriting, and arranging of securities, as well as providing investment advice and managing portfolios.

Mandatory Requirements

Share Capital of 75,000 USD

Minimum 2 directors with 4 years’ experience regardless of nationality (doesn’t have to be local)

Local office in Labuan with a minimum 2 staff members

 

Labuan’s financial licenses offer a compelling proposition for global investors and financial professionals. These, when combined with Labuan’s welcoming approach to cryptocurrencies in the form of Credit Token license – either as a standalone license or as an addition to any of the above licenses – really upholds jurisdiction’s dedication of becoming a global financial hub. Labuan’s commitment to regulatory excellence, coupled with tax incentives and access to international markets, positions Labuan as a preferred destination for those seeking a dynamic and secure financial environment. As businesses continue to navigate the complexities of the global financial landscape, Labuan stands out as a strategic choice for unlocking financial opportunities and achieving steady growth.

Why us?

Porat Group boasts years of hands-on experience in Fintech, iGaming, technology, payments, regulation and marketing, with legal and business experts who have been consulting a myriad of clients on an ongoing basis successfully for more than a decade. Our firm has amassed years of experience in assisting clients obtaining financial licenses globally and establishing their businesses from the ground up. Harness our expertise to your advantage to establish your financial venture. With Porat Group’s experience, you shall enjoy ongoing legal and regulatory consultations, compliance advisory, connections to the most sought-after providers, market-leading technologies, well-established banking and payment solutions, and introductions with the best traffic sources to your business. Our business-oriented strategic consultations, business connections, and marketing expertise will assist you to navigate the dynamic financial industry seamlessly.

Want to learn more about financial licenses or the financial industry in general? 

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