The Ultimate Guide to Cryptocurrency Exchange Tax in Malaysia

Although Blockchain is a new technology, the growth has been encouraging with the liberalisation approach of the Malaysian government to this new industry. In Labuan, Cryptocurrency Exchange is licensed and made legal with adequate KYC compliance and AMLA regulations. Cryptocurrencies are the third-largest assets holding (21%) besides the real estate (44%) and gold (33%) by the community in Malaysia. In this blog, we will be discussing the Cryptocurrency Tax in Malaysia. Labuan offers one of the most interesting low-tax options for international businesses and crypto startup. Labuan is capable of attracting fintech companies, including Blockchain and Cryptocurrencies. The Labuan FSA (Authority) regulates Cryptocurrency Exchange activities that allow you to facilitate coin brokers and traders in listing activities, buying and selling digital assets (including Cryptocurrency) via the exchange platform.

The compliance requirements for crypto business activities:

  • Your crypto activities will need to have an appropriate measure and system to manage AML/CTF risks
  • Your transaction will also go through an assessment process by the Labuan FSA to make sure you have sufficient capital and internal policies
  • You will also need to have protocols for cybersecurity risk management and governance expertise
  • Your management team will also be accessed in the background to make sure that they are fit and proper persons
  • The entire licensing process takes about 4-6 months
  • The Malaysian residents are allowed to trade within the crypto platform
  • You will have a meeting with the regulator, introduce your business to determine eligibility

Setting up a business entity in Labuan gives you access to top-notch banks, and the required minimum deposit is quite low. However, a non-regulated Cryptocurrency Company faces a lot of challenges as their eligibility to Open Offshore Business Bank Account is very difficult. Labuan offers an attractive legal framework which you can legalise your crypto exchange activity. This is necessary for people running crypto to fiat exchange processing system, and your business needs to perform a high amount of transactions daily. If you want to target clients outside Malaysia, Labuan Crypto Exchange can be the ideal place for your setup as the corporate tax is much lower, only 3% after audited net profit.

To set up a Labuan Cryptocurrency Exchange, you will need to fulfill the regulatory requirements and compliance reporting process. The initial due diligence required is to check the eligibility of Directors and Stakeholders to meet the compliance requirements and understand the business structure.

At QX Trust, we provide customised consultation and advisory to all our clients especially on crypto-related business. You can reach us at +60 3 9212 6940 or to get your offshore crypto exchange license and company set up in the most hassle-free manner. Visit to find out the rest of our services.