Banking & Islamic Banking, Investment Banking

Labuan Banking & Labuan Islamic Banking

  1. The business of receiving deposits on a current account, deposit account, savings account or any other account as may be specified by Labuan FSA, including compliance with Shariah principles for Islamic Banks
  2. Labuan investment banking business
  3. Labuan financial business
  4. Labuan Islamic banking business, or
  5. Such other business as Labuan FSA may specify, with the approval of the Minister of Finance, in any currency (including in MYR where permitted under the Financial Services Act 2013 or such other relevant law in force).

Note:

The above-mentioned businesses, where applicable, include compliance with Shariah principles for Islamic Banks.

Labuan Investment Banking & Labuan Islamic Investment Bank

  1. The business of providing credit/financing facilities
  2. The business of providing consultancy and advisory services relating to corporate and investment matters including dealing in securities, or making and managing investments on behalf of any person
  3. The business of undertaking foreign exchange transactions, interest/profit rate swaps, dealings in derivative instruments or derivative financial instruments or any other similar risk management activities
  4. Labuan Islamic investment banking business
  5. Labuan financial business, or
  6. Such other business as Labuan FSA may specify, with the approval of the Minister of Finance, in any currency (including in Malaysian Ringgit where permitted by the Financial Services Act 2013 or such other relevant law in force).

Note:

The above-mentioned businesses, where applicable, include compliance with Shariah principles for Islamic Investment Banks.

Labuan Investment bank & Labuan Islamic Investment Bank are not allowed to accept deposits.

Islamic Banking Window for Labuan Bank or Labuan Investment Bank

  • Labuan Bank / Labuan Investment Bank can establish an Islamic banking window under LFSSA 2022 without a separate license or additional fee by submitting:
    1. Certified true copy of board resolution for the Islamic banking window.
    2. Business plan with 3 years’ financial projections.
    3. Information on its internal Shariah Advisory Board (SAB).

Additional Incentives for Islamic Banking

  • Labuan Islamic Banks, Labuan Islamic Investment Bank and the Islamic divisions of both Labuan Bank and Labuan Investment Bank under MIFC have greater flexibility with:
  1. Exemption from physical presence in Labuan; operations offices can be opened anywhere in Malaysia (subject to Labuan FSA approval).
  2. No limitation on staffing or number of offices outside Labuan.
  3. Conducting Islamic financial business in non-Ringgit currencies mainly with non-residents per Labuan legislation.
  4. Allowed dealings with residents in non-Ringgit transactions as permitted by foreign exchange administration policies.

Licensing  Requirements

Operational Requirements

Steps