Establishing an Investment Bank in Labuan

Labuan jurisdiction boasts a robust regulatory framework, a flexible tax system, and competitive setup and operational costs, drawing international investment banks like Credit Suisse, Sumitomo, DBS, OCBC, among others. While both Labuan Commercial Bank and Labuan Investment Bank licenses share similarities, they differ in their permissible business activities, necessitating distinct licenses for operation.

When considering Labuan as the domicile for your Investment Banking business, aligning your business objectives and intended activities is essential. Labuan offers a spectrum of possibilities to meet your business objectives, providing comprehensive support from company incorporation to license application process, ensuring seamless operational readiness.

Labuan Investment Banks operate within a versatile scope, primarily catering to corporations, government entities, and high net worth individuals within their wealth management ambit. While they may engage in various commercial banking activities, they do not handle individual or corporate account deposits.

204a.Labuan Investment Bank Activities

Permissible Business Activities for a Labuan Investment Bank include:

  1. Transaction Banking: Offering credit facilities for principal investing, trade financing (letter of credit, performance, and financial bank guarantees), project or asset financing (project evaluation or feasibility studies), syndication or loan arrangement, and revolving credit.
  2. Corporate Finance: Providing consultancy and advisory services relating to corporate matters like mergers and acquisitions, initial public offerings (IPO), capital restructuring, and securities dealings.
  3. Securities Trading: Undertaking foreign exchange transactions, interest rate swaps, dealings in derivative instruments or derivative financial instruments or any other similar risk management activities.
    • Derivatives (interest rate swaps, cross-currency swaps)
    • Hedging (interest rates, LIBOR, etc)
    • FOREX (foreign exchange)
    • Treasury / government bonds
    • Unit trusts
    • Funds
    • Listings of financial instruments on Labuan International Financial Exchange (LFX)
    • Proprietary trading
    • Issuance of financial products for sale
  4. Asset & Wealth Management: Providing consultancy and advisory services relating to investment matters.
    • Private banking
    • Wealth management for High Net Worth Individuals (HNWIs)
    • Portfolio fund management of sovereign wealth funds, pensions, and corporations.
  5. Labuan Islamic Investment Banking business: Catering to Shariah-compliant investment banking activities.

See Also

Understanding Labuan Investment Bank License Application Process and Requirements
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 Investment Bank License

1

An investment bank or group engaging in investment banking activities licensed by the regulatory authority in the country of origin; or

2

A licensed bank or an established financial institution or financial service provider supervised by a competent regulatory authority; or

3

Any institutions licensed under the Financial Services Act 2013 with prior approval from Bank Negara Malaysia; or

4

Corporations with the necessary expertise and experience in the financial industry with at least three (3) years of good track record and regulated by an authority in their home country.

FinArk offers one-stop application solutions for your Labuan Investment 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 FAA Advisory Limited

Comprising a team of seasoned professionals well-versed in Labuan's business landscape, FAA 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 FAA 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 FAA 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