Labuan is a federal territory of Malaysia, on seven islands near Brunei. The official languages are English and Bahasa. The legislation is based on English common law. It is one of the youngest offshore companies – it was founded in 1990. In 2010, the word “offshore” disappeared from all official documents against the background of the worldwide trend of combating money laundering in offshore areas. Thanks to the change of Malaysian legislation, transparent financial relations with foreign companies have been established. This authorized Labuan to receive IBFC (international financial and business services) status.
The location of this offshore company next to China, India, location in the same time zone with many major Asian trade and financial centers makes it attractive for many international companies. Add to this the low level of corruption (56th in the world) and strict compliance with the law.
Benefits of registering a forex broker in the offshore jurisdiction of Labuan
In Labuan, you can register an offshore company as a private company. The name must contain a sign of limited liability – Incorporated (Inc.), Corporation (Corp.), Limited (Ltd), Sociedad Responsabilidad Limitada (S.L), Societe Anonyme (S.A.). When using the word Berhad (a Malaysian term for a public limited company) in the name, the letter L must be preceded, showing the jurisdiction of Labuan.
The main advantage of Labuan offshore is the trust in it by international structures and clients of offshore companies.
Now about the rest of the advantages of this offshore jurisdiction:
- Three percent tax on activities related to the forex market.
- There is no tax on the salary of a foreign director.
- Lack of exchange controls.
- There is an agreement on the avoidance of double taxation with many countries, including most European countries and Russia (not with Ukraine, Belarus and Kazakhstan).
- Fast registration – 7-14 days.
- To register a company, it is enough to have a virtual office.
- Remote control of the company is authorized.
- There are no requirements for local employees on the company’s staff.
- No restrictions on the citizenship of the director and other employees of the company. The director can be both an individual and a legal entity.
- You can open accounts in local and foreign currency in the largest banks in Malaysia.
Disadvantages of registration in Labuan
- An appropriate brokerage license is required. Note that this license is equivalent to a European one, but at the same time it is faster to get it (in 2-3 months) and cheaper.
- The requirement for the authorized capital is at least 10,000 USD.
- Bearer shares are prohibited.
- It is obligatory to have a corporate secretary with qualifications.
- Availability of financial statements of income and expenses, which is certified by a local auditor.
- Low confidentiality. The following information is available to third parties – the name of the company, the amount of the authorized capital, the address of the office, the address and the name of the director.
In general, we can say that, despite higher taxes and stricter requirements for the minimum authorized capital than, for example, in the Seychelles or Marshall Islands, in Belize and similar unregulated offshores, the jurisdiction in Labuan benefits from greater prestige in the eyes of traders. This means their greater confidence, which is converted into a larger number of them who cooperate with the broker and a greater turnover.
Registration of a forex broker in Labuan jurisdiction by 321Broker
Our company offers a turnkey forex company. This service includes:
- Registration in the selected offshore zone, including Labuan.
- Registration of a license to conduct brokerage activities in the forex market.
- Creation of a technical base:
• a site with the functionality – traders’ personal accounts, connection to payment systems, a trading platform, liquidity providers, etc.;
• implementation of CRM for effective interaction with traders.
- Favorable prices.
- High competence.
- Ten years of experience in this business.
- Complete confidentiality.