LABUAN INSURANCE LICENSE

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Labuan insurance and insurance-related companies within the Labuan International Business and Financial Centre (Labuan IBFC) are regulated by Part VII of the Financial Services & Securities Act 2010. A Labuan insurance broker, authorized to arrange Labuan insurance business, enjoys the flexibility to establish a takaful broking window without requiring a separate license.

A "Labuan insurance broker" refers to a licensed individual or entity that can:

1. Arrange Labuan insurance business for prospective or existing policy owners.
2. Arrange Labuan reinsurance business for insurers seeking reinsurance.
3. Analyze financial circumstances and provide plans to meet financial needs and objectives, regardless of charging a fee.

1. Approved Activities:
   • Direct insurance business.
   • Life insurance.
   • Reinsurance business.

1. Restricted Activities:
   • Dealing with residents (except for high net-worth individuals, reinsurance, and others as defined by Labuan FSA).
   • Brokering for direct Malaysian risks.

To carry out Labuan insurance broking activities, certain requirements must be met:

• Minimum paid-up capital of RM300,000 or its equivalent in any foreign currency, to be maintained unimpaired by losses.
• Professional indemnity insurance coverage of not less than RM2.5 million or its equivalent in any foreign currency.
• Compliance with substance requirements, including a minimum of two (2) full-time employees in Labuan and a minimum annual operating expenditure of RM100,000 in Labuan.

Labuan IBFC's taxation system, governed by the Labuan Business Activity Tax Act 1990 (“LBATA”), offers favorable tax regulations for Labuan business activities. Compliance with substance requirements is crucial to benefit under LBATA.

Labuan entities can conduct transactions with residents of Malaysia in Ringgit Malaysia, except for specific offerings and subscriptions.

• License Processing Fee (Once-off): USD350
• Annual License Fee: USD6,500

The annual license fee, payable when the license is approved, remains valid until December 31 of the approval year. Subsequent annual license fees are due by January 15 of each calendar year.