Foreign exchange (forex) trading involves the buying and selling of currencies with the aim of generating profit from exchange rate movements. Labuan IBFC provides a well-regulated and tax-efficient platform for forex broking and money broking businesses operating across Asia.
Labuan Forex / Money Broking Licence
Forex and money broking activities in Labuan require a licence issued by Labuan FSA under the Labuan Financial Services and Securities Act 2010 (LFSSA). The licence permits the holder to carry out dealing in currencies, foreign exchange transactions and related money broking services for non-resident clients.
Key Advantages of a Labuan Forex Licence
- 3% corporate tax on net trading profits from international dealings
- No withholding tax on dividends, interest, management fees or royalties
- No capital gains tax
- No foreign exchange controls on offshore banking
- Multi-currency banking across major currencies
- Access to Malaysia's 70+ bilateral tax treaty network
- 100% foreign ownership permitted
- Eligibility for Labuan working visa for key personnel
Regulatory Framework
Labuan FSA takes a facilitative but thorough approach to licensing. Applicants must demonstrate a credible business model, adequate capitalisation, fit-and-proper management, and the operational infrastructure to conduct regulated activities. Our licensing advisory service guides clients through the full application process from initial assessment to submission and approval.
Substance Requirements for Licensed Entities
Licensed entities in Labuan are subject to substance requirements that go beyond those applicable to standard trading companies. Proper planning for employees, office infrastructure, governance arrangements and ongoing compliance is essential from the outset — and forms the foundation of a credible, sustainable licence operation.