Labuan Forex Money Broker
Operational requirements after approvaly
The Labuan Forex Money Broker License
Money broking business is defined as the business of arranging transactions between buyers and sellers in the money markets with brokers acting as an intermediary in consideration of brokerage fees paid or to be paid but does not include the buying or selling of foreign currencies by the broker as a principal in such markets.
It is easy to start your own Forex or Money Broking business in the Labuan jurisdiction with 100% foreign ownership! Labuan Authority has recently issued new guidelines on money broking business in Labuan with effective 1st Jan 2019.
Applicant should meet the following minimum criteria:
a) Individual or institution with money broking expertise with a good track record and sufficient years of experience in the field;
b) Regulated money broker or provider of such services from other jurisdictions with approval from home authority with the letter of awareness or consent available;
c) Any licensed institutions including approved money broker under the Financial Services Act 2013 with approval from the Central Bank of Malaysia;
Advantages of Labuan Forex broker license
The significant benefits of obtaining a Forex broker license on Labuan are a low tax rate that is 3% of the verified net profit or fixed tax, as well as the lack of currency control.
Legal entities – residents of Labuan, additionally can get access to tax benefits under the agreements of Malaysia on avoidance of double taxation.
An important advantage of Labuan’s license is the ability to open a bank account in Malaysian banks. However, do not forget that Malay banks will ask the beneficiary personally to be present at the process of opening an account for the company.
The term for obtaining a Forex broker license in Labuan is 3 months from the date of submission of all necessary documents.
Labuan Money Broking Forex License
Operational requirements after approval
- Minimum paid up capital of MYR 500,000 (can be in the equivalent in foreign currencies) unimpaired by losses with a certificate of evidence from the banks in Labuan
- Must maintain an operational office in Labuan and all transactions must be done to, through and from Labuan with minimum 2 staffs with minimum annual spending of MYR 100,000
- Transact in foreign currencies of your choice, except with Malaysian Ringgit
- No transactions are permitted to be done with Malaysian residents, other than authorized dealers approved by the Malaysian Exchange Control
- The money broking company shall impose a maximum leverage limit of 100:1 on clients’ trading transactions (i.e. a minimum of 1% margin deposit to enable the opening of trade position). Example: if the transaction is USD100,000, then the margin requirement is USD1,000
- Ensure the counterparties ie principal broker or liquidity provider are regulated by a recognized supervisory or authority
- It is necessary to obtain approvals from the authorities who intend to operate prior commencing the business in those respective markets and such approvals have to be copied to Labuan FSA
- Where technology client interface is deployed, any intrusions or malfunctions of the systems incidents discovered must report to Labuan FSA with root cause and impact analysis report to be submitted within 14 days
- Labuan money broker must disclose to their clients the list of introducing brokers and their roles and responsibility
- The company must appoint an approved external auditor to carry out an audit of business operations annually
- Maintain a separate account for clients’ monies and marked clearly each clients monies in record and client’s withdrawal has to be done within 3 working days
- Have proper written agreements and contracts with clients and any parties
- The money broking company must have a principal broker, liquidity provider, trading platform provider and copies of Agreements
- Ensure compliance with the AML/CFT Act and Guidelines issued by Central Bank of Malaysia and Labuan Authority with a compliance officer hired
- Any changes on shareholders, directors, office location, additional office outside Labuan and outsourcing arrangements required to obtain approval from Labuan FSA
- Yearly license fee payable to Labuan FSA is MYR 5,000 (USD 1,500).
What separates us from our competitors is that our services don’t end with the registration of your company. We offer a wide range of additional services others can’t or just won’t offer, such as lifetime free support.
Whilst most providers either specialise on personalized consultation at relatively high rates or run bulk registration factories without any support, we want to offer the positive aspects of both types.
Therefore TBA combines professional advice, worldwide registration services, reasonable fees, customized order processing, lifetime support and fast processing. Where others see company formation services as a bulk registration with no support and no individual assistance, we do care about your business needs.
Should you have any question or matter
You would like to discuss or clarify with us
Should you like to receive further Information
About our services and fees, …
Our multi-lingual team of business advisors is happy to assist you with all upcoming questions and issues in relation to your company.
You may call or email us, and we will be happy to assist you in a fast and efficient manner.
You can also come and visit us at our Limassol offices to discuss issues face to face if you prefer. Just arrange an appointment and we will be happy to meet with you.