Guide to Applying for a Labuan Digital Bank License

Digital Banking is the New Normal in Asia

The financial services landscape in Asia is witnessing a transformative shift driven by technology-based innovations. This evolution has given rise to the emergence of digital banks in Labuan, aimed at delivering financial services with enhanced effectiveness and efficiency to a wider market audience. Labuan Financial Services Authority (Labuan FSA) offers the Labuan Digital Banking License, catering to both conventional and Islamic financial services. This trend is not confined to Labuan alone, as countries worldwide, such as Hong Kong and Singapore, have already granted digital banking licenses to prominent entities like Tencent, Ping An, Ant Group, DBS, OCBC, and UOB.

What is a Labuan Digital Bank?

A Labuan Digital Bank mirrors traditional banking services but distinguishes itself by operating predominantly or entirely online. In line with its core identity as a digital entity, a digital bank can only operate one physical place of business in Labuan, unlike traditional banks which can have a physical network of bank branches.

For enterprises contemplating the digital transformation of their banking operations and venturing into the Asian market, Labuan presents an enticing option. With a minimal corporate tax rate of 3%, Labuan facilitates the realization of business objectives. Our comprehensive services span Labuan company incorporation, seamless operational license applications, and thorough assistance, ensuring a smooth transition to the digital banking landscape.

Business Activities that a Labuan Digital Bank can Perform

  • Digital corporate banking
  • Customer onboarding
  • Digital trade
  • Digital loans origination
  • Watch banking / wearable tech
  • Financial chatbot
  • Mobile wallet
  • Social banking

See Also

Key Requirements for Labuan Digital Bank License Comparison of Labuan with Other Jurisdictions FAQs on Labuan Banking License Applications

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 for Labuan Digital Bank License

The applicant will have to meet all three criteria below to be eligible to apply.

1

Has strong financial resources and demonstrates the ability to meet and maintain the minimum paid-up capital.

2

Has a credible and viable business plan which sets out the approach on how it intends to incorporate the innovative use of technology for its operations to meet the proposed strategic business objectives.

3

Demonstrates the ability to conduct digital financial services, e-commerce and technological-driven business.

FA Advisory offers one-stop application solutions for your Labuan Digital Bank License, 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