On 28 November 2022, the Labuan Financial Services Authority issued a circular on the relaxation of regulatory and operational requirements for Labuan international trading companies, Labuan digital banks and Labuan protected cell companies.

This regulatory relaxation has been extended until 31 December 2023.

The table below sets out the guidelines and frameworks that are affected, as well as the type of reliefs that the Labuan Financial Services Authority offers.

Affected guidelines or relevant framework

Type of Labuan entity affected

Regulatory reliefs

Guidelines on the Establishment of the Labuan International Commodity Trading Company under the Global Incentives for Trading Programme

Labuan international trading companies

There are reductions of the minimum annual turnover as follows:

  • $25 million for petroleum and petroleum-related products, including liquefied natural gas; and
  • $10 million for other than petroleum and petroleum-related products, including liquefied natural gas.

Labuan Digital Banking Framework

Labuan banks intending to carry out digital banking business

There are reductions of:

  • the minimum capital requirement from 200 million Malaysian ringgit to 50 million Malaysian ringgit (or the equivalent amount in any foreign currency) unimpaired by losses; and
  • the amount of non-interest-bearing security deposit to be placed with the Labuan Financial Services Authority from 5 million Malaysian ringgit (or the equivalent amount in any foreign currency) to 2.5 million Malaysian ringgit.

Guidelines on the Establishment of Labuan Protected Cell Companies

Labuan protected cell companies

The requirement to obtain approval for the establishment of cell for protective cell companies captive as set out in paragraph 10.2 of the guidelines is waived.

For further information on this topic please contact Pamela Kung at Shearn Delamore & Co by telephone (+60 3 2027 2911) or email ([email protected]). The Shearn Delamore & Co website can be accessed at www.shearndelamore.com.