Blog
Fresh breath of air for innovative financial services in Labuan
Sep 27, 2018
Labuan Financial Services Authority (LFSA) supports innovative financial services (IFS) such as fintech and assists Labuan entities in case of providing related to fintech activities.
LFSA expressed its interest in attracting “Innovative Financial Services” to the region including businesses involved in distributed ledger technology and cryptocurrencies as it stated in “Circular on Innovative Financial Services in the Labuan” sent on June 28, 2018. Labuan business is called upon to use IFS as a part of their management to assist their clients whether in, from or through Labuan Financial Centre.
Worth to note that Labuan entities would need to obtain LFSA prior approval for their proposed IFS-related activities in regard to protect clients’ interests. The above-mentioned permission is not necessary for innovations initiated by local entities for their in-house organizational advancements.
To guarantee the IFS is acted professionally and in an adequate wise manner, LFSA believes that local entities will resort to respective measures. Among the other things, having adequate safeguards to handle risks related to money laundering and the countering of terrorism financing. By doing this, Labuan entities committing IFS shall adhere to AML and CFT Requirements issued by Bank Negara Malaysia and LFSA.
Labuan entities implementing IFS have to assure that their trade operations can serve for such activities. Basically, they would need to prove sufficient level of capital; sufficient framework of internal policies and controls; computerized risk management and governance; and compliance with applicable laws, rules and regulations relevant to the IFS’s business operations.
Summing up we can say that Labuan become an interesting option for those who are willing to form up fintech business e.g. a regulated exchange that accepts fiat currencies in an advantageous fiscal environment.
Moreover, banks are quite selective, it is possible to open bank accounts for exchanges in both Malaysia and Labuan for formations incorporated and regulated in the free zone.
Offshorelicense LTD will be extremely happy take a hand and guide you in your needs for incorporating a company and obtaining the relevant license in Labuan.