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Labuan Investment Bank

The operations of Labuan investment banking business are regulated by the Labuan Financial Services and Securities Act 2010 (“LFSSA”).

Labuan investment banking business includes:

1. Providing credit facilities.
2. Offering consultancy and advisory services related to corporate and investment matters, dealing in securities, and managing investments on behalf of clients.
3. Conducting foreign exchange transactions, interest rate swaps, dealing in derivative instruments, and similar risk management activities.
4. Engaging in Labuan Islamic investment banking business.
5. Conducting Labuan financial business.
6. Other businesses specified by Labuan FSA, subject to approval by the Malaysian Minister of Finance, in any permissible currency (including Malaysian Ringgit as permitted by relevant laws).

Labuan investment banks are not permitted to accept deposits.

A Labuan investment bank can be established as a branch or subsidiary under the Labuan Companies Act 1990. Eligible applicants include:

• Investment banks or groups engaged in licensed investment banking activities in their country of origin.
• Licensed banks, established financial institutions, or financial service providers supervised by competent regulatory authorities.
• Licensed institutions under the Financial Services Act 2013 with prior approval from Bank Negara Malaysia.
• Corporations with the necessary expertise and at least three (3) years of good track records and sound financial performance in the financial industry.

The applicant needs to demonstrate:

• Sufficient and sound financial resources to support the investment banking business.
• A credible business plan aligned with strategic objectives.
• Robust internal policies and controls matching business profile and risks.
• Competency and experience of board members and senior management.

Labuan investment banks must meet the following operational requirements:

• Maintain a minimum paid-up capital or working funds of RM10 million, subject to discretion by Labuan FSA for additional capital based on business operations and risk profile.
• Comply with substantial activity requirements as per the Labuan Business Activity Tax (Requirements for Labuan Business Activity) Regulations 2018, including establishing an operational office in Labuan.
• Adhere to all applicable laws, rules, regulations, and guidelines relevant to Labuan investment banking business, including those issued by Labuan FSA and other regulatory bodies.

• Submit audited financial statements annually to Labuan FSA’s Supervision and Monitoring Unit.
• Annual license fee: USD30,000, 
• Annual Co-located Office fee (if applicable): USD3,500, 
• Annual Marketing Office fee (if applicable): USD2,500. 
• Annual license fee is payable upon approval and due on or before January 15 each year.