Labuan investment banks are designed for capital markets and advisory-oriented business models.

Permissible activities typically include:

• Corporate finance and investment advisory
• Capital raising and structuring
• Credit facilities to corporates and investment vehicles
• FX, derivatives and risk management transactions
• Islamic investment banking activities

Key distinction:

• Investment banks are not permitted to accept deposits
• Must meet minimum paid-up capital thresholds
• Business activities must align closely with approved scope under licence

This licence type is commonly used for:

• Cross-border structuring platforms
• Investment holding and financing hubs
• Funds, SPVs and deal structuring vehicles

Labuan’s Digital Banking Framework supports banking businesses conducted primarily or wholly through digital channels.

Applicants are expected to demonstrate:

• A viable technology-enabled business model

• Robust IT governance and cybersecurity controls

• Strong AML/CFT systems and transaction monitoring

• Adequate financial resources and operational capability

• A clear customer protection and data governance framework

Labuan has long been recognised as a centre for international Islamic finance, offering Shariah-compliant banking structures under the oversight of Labuan FSA.

In 2024, Labuan FSA introduced the Islamic Business Facilitation and Innovation Platform (i-BOX) — a regulatory sandbox designed to support Islamic digital banks and innovative Shariah-compliant financial solutions. The framework allows eligible applicants to operate within a controlled environment for a defined period while demonstrating commercial viability, governance and social impact.

i-BOX is designed to support:

• Islamic digital banking models

• Financial inclusion initiatives

• Islamic social finance solutions (e.g. waqf, zakat-linked models)

• Innovative fintech applications aligned with Shariah principles

Applicants are typically assessed on:

• Shariah governance framework

• Innovation and value proposition

• Technology resilience and cybersecurity

• Consumer protection measures

• Financial sustainability and capital adequacy

This initiative positions Labuan as a forward-looking hub for Islamic digital finance, attracting fintech founders, Islamic finance institutions and impact-driven investors seeking a regulated yet innovation-friendly environment.