Utilising Labuan Payment System as a Digital Wallet

Overview of Labuan Payment System

The Labuan Payment System is strategically designed to facilitate seamless cashless transactions, primarily focusing on electronic payments for goods and services. Conventional methods like debit cards, credit cards, and online internet banking paved the way, while the evolving fintech and blockchain landscape introduced advanced electronic payment systems, notably E-Wallets, offering cost-effective solutions to the mass market consumer.

Embracing the Innovative Financial Services (IFS) framework in Labuan, the Labuan Payment System stands out for its versatility. It can be pursued as a stand-alone license or coupled with others like Money Broking, Fund Manager, and Credit Token licenses. Operating independently incurs a 24% tax rate, while bundling with another license reduces the tax to 3%, in accordance with P.U.(A) 392.

How can a Money Broking license be used alongside a Digital Wallet?

In the dynamic landscape of digital asset trading, the strategic pairing of a Money Broking License, designed to facilitate both forex trading and cryptocurrency exchange, with digital wallets promises an enhanced and seamless user experience. This license serves as a pivotal link between conventional and cryptocurrency markets, providing users with a versatile platform for acquiring cryptocurrencies and participating in forex trading. Traders can effortlessly set up a dedicated money broking account, allocate funds for trading positions, and leverage digital wallets for secure storage, frictionless transactions, and efficient management of stocks and cryptocurrencies. This integration offers users a holistic and user-friendly solution for managing their financial assets in the evolving financial landscape with confidence and ease.

Benefits of a Payment System

Complete payment flexibility offers a competitive advantage
In today’s fast-paced market environment, meeting and surpassing customer expectations are paramount for sustained success. Labuan Payment System offers complete payment flexibility, positioning your business at the forefront of payment trends. Embracing contactless payments has become imperative, enabling users to effortlessly transfer and receive funds with a simple click, anytime, anywhere.
Lower operational costs
Modern payment systems are designed with a focus on cost efficiency. Advanced terminal management systems seamlessly communicate with multiple payment devices and workstations, reducing operational costs significantly. This integrated approach allows merchants to share devices across multiple workstations, eliminating the need for unnecessary terminal purchases and optimising expenditure.
Instant and convenient
Contactless payments, the swiftest method available, facilitate instant fund transfers. This feature is especially advantageous for online businesses and platforms, enhancing overall efficiency and customer satisfaction.

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Labuan Payment System offers two versatile models to cater to diverse business requirements. It also can be combined with another license for better payment facilitation.

Model 1: Single Merchant Payment System

The Single Merchant Payment System enables the merchant to provide payment flexibility in which consumers have more options to make payment for both online and offline products. This helps the company to reduce manpower and the risk of loss or theft as there is no cash in hand.

Model 2: Merchant Community Payment System

The Merchant Community Payment System connects consumers to the merchant’s associates within a community. This Payment System unites all the merchants in the community by sharing the same system, often utilising an e-wallet mechanism. This approach enables the merchants to work together in promoting better sales as well as having a greater database for future products and events.

Why Choose Labuan

Strategic location to tap into the Asia Pacific market

Shared time zone with major Asian cities for seamless interaction

Excellent infrastructure and regulations within the Labuan IBFC

OECD whitelist jurisdiction status

Recognised by prominent exchanges for entity listing (such as Hong Kong, Singapore, Malaysia, Australia, and Dubai Exchanges)

100% foreign ownership with a minimum requirement of 1 shareholder and 2 directors

Low corporate tax rate of 3%

Absence of withholding tax, stamp duty, GST, import duty, sales or service tax, capital gains tax, inheritance tax

Void of tax on dividends to shareholders

Void of tax on director fees for foreign directors

Eligibility Criteria of Labuan Payment System

1

Any individual with payment gateway expertise with at least 3 years of good track record and experience with the new Payment System model or any company with a current Payment System License.

2

Any regulated payment gateway or provider of such services from other jurisdictions with approval from home authority with the letter of consent.

3

Any licensed institutions including approved payment gateways under the Financial Services Act 2013 with approval from the Central Bank of Malaysia.

Note: Minimum Proof of Fund: USD 100,000.

Steps to Apply for a Labuan Payment System

Documents collection and compilation

License application
(45 – 60 days)

Establish a Labuan Company

Set up a physical office and bank account in Labuan

FA Advisory offers one-stop application solutions for your Labuan Payment System, encompassing:

Consultation on eligibility and procedural guidance tailored to your profile.
Profiling, due diligence and guidance on documentation preparation.
Preparation of Business Plan, Financial Forecast and Operation Manuals.
Submission and supervision of the application process until approval.
Acting as your liaison and contact point with LFSA, arranging for interviews (if any).
Tracking the license approval and handling all queries from LFSA.
Advisory services on the appropriate company structure post-approval.
Assistance in setting up onshore and offshore bank accounts.
Assistance in establishing operational and marketing or co-located offices.
Staff provision and office space rental.
Internal audit and compliance advisory.

About FA Advisory

Comprising a team of seasoned professionals well-versed in Labuan’s business landscape, FA Advisory Limited extends a comprehensive suite of services covering corporate services, private wealth management, and licensing compliance administration, all tailored to meet the unique needs of our clients.

At FA Advisory Limited, our expertise lies in delivering Labuan insights that facilitate business expansion, simplifying intricate processes, and offering valuable information to guide you through various facets of your journey.

Choose FA Advisory as your trusted partner in navigating the dynamic business landscape of Asia. With our commitment, we are your gateway to success in Labuan and beyond.

Email: advisory@finarkasia.com | Phone number: +6010-931 6678