TBA & Associates

Labuan money broking license

Labuan, also known as the Pearl of Borneo, is centrally located in the heart of the South China Sea. Roughly equidistant from Singapore, Bangkok, Hong Kong, Kuala Lumpur, Manila and Jakarta, it also shares the same time zone with major Asian cities such as Beijing, Tokyo, Hong Kong, Manila, Bangkok, Singapore, Jakarta and Perth. The climate is warm and humid throughout the year, with daytime temperatures average 30°C. The official currency is the Malaysian Ringgit (RM).

Unlike other Malaysian towns, Labuan is unique as it is totally surrounded by sea. This tropical-islands paradise with International Business and Financial Center plus Free Trade Zone transforms it into an ideal business playground for the corporate tourist, business and affluent travelers.

Become a Forex Money Broker

The money broking business is defined as the business of arranging transactions between buyers and sellers in the money or foreign exchange markets with brokers acting as an intermediary for consideration of brokerage fees paid. It is a straight through processing (STP) model. Labuan Forex Money Broking license, however, does not include the buying or selling of Ringgit and foreign currencies by the broker as principal in such markets.

It is easy to start or expand your own money broking or forex business through Labuan which offers 100% foreign ownership and low tax!

Now many brokers have begun to take an interest in obtaining a Labuan Money Broking Forex license. 100% foreign ownership and low tax, relatively low capital requirements, regional banking, and a quick application procedure are just a few reasons why more brokers are considering Labuan FX license, making Labuan the best jurisdiction for those who wish to promote this business model.

Labuan Authority has recently issued new guidelines on money broking business in Labuan which have been effective since 1st Jan 2019. Labuan has globally become the emerging country of forex market.

TBA & Associates offers you a complete package to set-up a system for a Labuan Forex Broker license. We will help you in each and every step of the way to ensure your business trust and high level of confidence during Labuan Forex company formation.

Our complete package offers you all the mandatory requirements that are very needed for a successful registration and renewal with the Labuan FSA and IBFC along with the required compliance with the regulatory authorities.

LIBFC (Labuan International Business and Financial Centre) is one of the regulatory bodies that are responsible for issuing, reviewing and regulating the FX companies licensed by these authorities. The LIBFC licenses are only issued to those financial companies which look forward to engaging in Forex activity, but only if they meet certain criteria set by the regulator, including capital adequacy, proper tests and mandatory physical office in Labuan.

Money Broking license in Labuan can be obtained relatively quickly with an approximate time frame of 3 months and it weighs lesser on pockets. Documents processing and bank procedures are easy in Labuan and entitles it as a well-regulated jurisdiction.


  • 100% foreign ownership, no need Malaysian local partners;
  • Tax only 3% or pay flat fee RM20,000 on Trading Profit;
  • Zero withholding tax on Interest, Management fee, Royalty fee and Technical fee;
  • No Foreign Exchange Controls;
  • No stamp duty or GTS;
  • No import duty/Sales/Service Tax;
  • Ability to access more than 7’ Malaysian Tax Treaty partners;
  • 50% tax deduction for expatriate professionals/ managers’ employment;
  • 100% exemption for director’s fees for foreign directors;
  • No tax on dividends to shareholders;
  • Can apply for two years’ renewal multiple entry work permit to stay in Malaysia.

Features of Labuan IBFC

Highly flexible tax framework

Progressive legislative environment

Competitive pricing structure

Strategic location

Well-developed infrastructure with satellite telecommunication

Political stability

Low cost of operation

Shares the same time zone with other major Asian cities

Who qualifies?

Applicant should meet the following minimum criteria:

  • A licensed domestic money broker;
  • A Labuan company incorporated under the Labuan Companies Act 1990 (with money broking expertise); or
  • Any licensed institutions under the Banking and Financial Institutions Act 1989 with prior approval from Bank Negara Malaysia (Central Bank of Malaysia);
  • To have a good track record of financial performance, at least in the three years preceding the application; and
  • Committed to setting up a functional operation in Labuan.

Operational requirements

The applicant company must:
Maintain a paid-up capital unimpaired by losses of at least RM500,000 (approx. US$100,000) 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, taking into account 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.
Ensure that the counterparties, i.e. principal broker and liquidity provider are regulated by a recognised 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 USD100,000, the minimum margin requirement will be equivalent to USD1,000.
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. The report shall contain:
    • an executive summary of the relevant incident;
    • an analysis of the root cause and the description of the impact of the relevant incident to the money broking business; and
    • a description of the remedial measures taken to address the root cause and consequences of the relevant incident.
For Labuan money broker that undertakes Islamic money broking business, is required to appoint a qualified person to its internal Shariah advisory board to ensure that its management and operation are in compliance with Shariah principles. In this regard, the Directive on Islamic Financial Business in Labuan IBFC shall also be observed.

Documents required

Copies of passport notarized in English.

Copies of last 3 months’ utility bill, notarized in English along with original.

Directors/ Shareholders’ Bank reference letter.

Reference letter from CA or CPA and Lawyer Copies of educational qualification certificate and CV in English.

Bank balance confirmation letter stating a minimum balance of MYR 500,000.

License application – expected timeframe

Although every application is unique, making it difficult to provide an exact timeframe, it will require roughly 12-16 weeks.

Our company licensing services

— What we do and do not do

Our company is EXCLUSIVELY engaged in assisting worldwide clients, either individuals or corporate entities, to get duly and properly licensed with local Regulators and Financial Authorities to get respective official licenses to legally carry out their cryptocurrency or financial related business activities.

TBA & Associates Tax Business Advisors does not provide or carry out any sort of Cryptocurrency or Financial services!

Disclaimer: While TBA & Associates strives to make the information on this website as timely and accurate as possible, the information itself is for reference purposes only. You should not substitute the information provided in this article for competent legal advice. Feel free to contact TBA Customer Services for advice on your specific cases.

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