Labuan Investment Banking - Banking

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Labuan investment banking is defined as:

The business of providing credit facilities
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
The business of undertaking foreign exchange transactions, interest rate swaps, dealings in derivative instruments or derivative financial instruments or any other similar risk management activities
Labuan Islamic investment banking business
Labuan financial business, or
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).

Labuan investment banks are not allowed to accept deposits.

key highlights

61 number of banks in 2020

Total customer deposits increased by 7.8% to USD8.6 billion in 2020
Loan exposure by region in 2020: Asia and The Pacific (75.2%), Europe (15.2%), America (4.4%), Far East (3.6%) and Middle East and Africa (1.6%)
USD49.4 billion of assets in 2020

View list of Labuan Banks and Investment Banks

Entry Requirements
Application Requirements
Operational Requirements
Fees

Entry Requirements
A Labuan investment bank can be set up as a branch or subsidiary and registered or incorporated under the Labuan Companies Act 1990. The application may be accepted from:

An investment bank or group engaging in investment banking activities licensed by the regulatory authority in the country of origin
A licensed bank or an established financial institution or financial service provider supervised by a competent regulatory authority
Any institutions licensed under the Financial Services Act 2013 with prior approval from Bank Negara Malaysia; and
Corporations with the necessary expertise and experience in the financial industry with at least three years of good track record and regulated by an authority in their home country.
Application Requirements
An applicant is required to submit an application of which the submission should include the following:

A letter of awareness from a competent regulatory authority that supervises the applicant's shareholder/head office.
A letter of guarantee from the applicant's shareholder or an undertaking from the head office.
Business plans inclusive of three years' financial projections of the applicant.
Certified true copy of the Memorandum and Articles of Association of the applicant.
Certified true copy of the resolutions of the board or minutes of the general meeting, which approve the applicant to apply for a licence.
Copy of the audited annual accounts of the applicant's shareholder/head office for the three preceding years.
Applicant's corporate profile, which includes:
The name, place and date of establishment of the applicant.
The names, addresses, qualifications and experience of the directors and officers responsible for the overall management of the affairs of the applicant.
The name and address of each member who holds 10% or more of the voting shares of the applicant.
Declaration by the applicant on the probity of its directors and officers who are responsible for the management of the applicant; and
Any other information relevant to the application.
Operational Requirements
Maintain a physical presence in Labuan.
Every director or principal officer (PO) of a Labuan investment bank must be fit and proper persons and shall not be subject of any adverse report from any reliable sources. The appointment of a director or PO of a Labuan investment bank must obtain prior approval from Labuan FSA.
Comply with the statutory requirements under the Labuan Financial Services and Securities Act 2010.
Comply with the prudential and reporting requirements issued by Labuan FSA.
Adhere to any other requirements issued by Labuan FSA from time to time.
Meet certain pre-determined criteria, should it prefer to co-locate to any other parts of Malaysia
Fees

All licensees are required to pay to Labuan FSA annual licence fees on or before 15 January of each year:
Type of fees
Amount
Annual Fee
RM100,000
USD30,000
Marketing Office Fee
RM7,500
USD2,500
Co-Located Office Fee
RM10,000
USD3,500

Entry Requirements
A Labuan investment bank can be set up as a branch or subsidiary and registered or incorporated under the Labuan Companies Act 1990. The application may be accepted from:

An investment bank or group engaging in investment banking activities licensed by the regulatory authority in the country of origin
A licensed bank or an established financial institution or financial service provider supervised by a competent regulatory authority
Any institutions licensed under the Financial Services Act 2013 with prior approval from Bank Negara Malaysia; and
Corporations with the necessary expertise and experience in the financial industry with at least three years of good track record and regulated by an authority in their home country.
Application Requirements
An applicant is required to submit an application of which the submission should include the following:

A letter of awareness from a competent regulatory authority that supervises the applicant's shareholder/head office.
A letter of guarantee from the applicant's shareholder or an undertaking from the head office.
Business plans inclusive of three years' financial projections of the applicant.
Certified true copy of the Memorandum and Articles of Association of the applicant.
Certified true copy of the resolutions of the board or minutes of the general meeting, which approve the applicant to apply for a licence.
Copy of the audited annual accounts of the applicant's shareholder/head office for the three preceding years.
Applicant's corporate profile, which includes:

The name, place and date of establishment of the applicant.
The names, addresses, qualifications and experience of the directors and officers responsible for the overall management of the affairs of the applicant.
The name and address of each member who holds 10% or more of the voting shares of the applicant.

Declaration by the applicant on the probity of its directors and officers who are responsible for the management of the applicant; and
Any other information relevant to the application.
Operating Requirements
Maintain a physical presence in Labuan.
Every director or principal officer (PO) of a Labuan investment bank must be fit and proper persons and shall not be subject of any adverse report from any reliable sources. The appointment of a director or PO of a Labuan investment bank must obtain prior approval from Labuan FSA.
Comply with the statutory requirements under the Labuan Financial Services and Securities (Amendment) Act 2022 (Act A1654).
Comply with the prudential and reporting requirements issued by Labuan FSA.
Adhere to any other requirements issued by Labuan FSA from time to time.
Meet certain pre-determined criteria, should it prefer to co-locate to any other parts of Malaysia
Fees
All licensees are required to pay to Labuan FSA annual licence fees on or before 15 January of each year:
Type of fees
Amount
Annual Fee
USD30,000
Marketing Office Fee
USD2,500
Co-Located Office Fee
USD3,500

Labuan Islamic Investment Banking Window

The setting up of an Islamic investment banking window by a Labuan investment bank under the Labuan Financial Services and Securities (Amendment) Act 2022 (Act A1654) does not require a separate licence and there is also no additional licence fee involved. A Labuan investment bank may submit the application for approval with the following documents:

Certified true copy of board resolution pertaining to the proposed establishment of an Islamic banking window.
Business plan inclusive of three years' financial projections.
Information on its own internal Shariah Advisory Board (SAB).

Additional Incentives

Under the Malaysia International Islamic Financial Centre's (MIFC) initiative, the Islamic divisions of Labuan investment banks are given greater flexibility as follows:

Exemption from maintaining physical presence in Labuan. The Islamic divisions of Labuan investment banks may open operations offices anywhere in Malaysia, subject to consideration by Labuan FSA.
No limitation on the staffing and number of operations offices to be opened outside Labuan.
The operations offices are to conduct Islamic financial business in non-Ringgit currencies and deal mainly with non-residents as per Labuan legislation.

Dealings with residents in non-Ringgit transactions are allowed as permitted under the current foreign exchange administration policies.

Governing Legislation, Related Guidelines and Circulars

For the latest governing legislation, related guidelines and circulars, please go to labuanfsa.gov.my

List of Labuan Banks and Investment Banks

For the latest list of Labuan Banks and Investment Banks, click here.
This list was updated on 22 Nov 2024 and does not reflect real-time data.

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Go to FAQs

List of Labuan Banks and Investment Banks

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A - C
ACE Investment Bank Limited
AmanahRaya Investment Bank Ltd
AmBank (M) Berhad, Labuan Offshore Branch
Asia Digital Bank Ltd (Labuan Investment Bank)
Asia Investment Banking Corporation
Asia Pacific Investment Bank Ltd.
BANK AL HABIB LIMITED
Bank Islam Malaysia Berhad (BIMB) Labuan Offshore Branch
Bank Muamalat Malaysia Berhad, Labuan Offshore Branch
BANK OF AMERICA, NATIONAL ASSOCIATION
Baxian Private & Investment Bank Ltd
BNP PARIBAS
Capital Investment Bank (Labuan) Limited
Cathay United Bank, Labuan Branch
China Construction Bank Corporation, Labuan Branch
CIMB BANK (L) LIMITED
CIMB BANK BERHAD, LABUAN OFFSHORE BRANCH
Citibank N.A., Labuan Branch
CITY CREDIT INVESTMENT BANK LIMITED
Credit Investment Bank Ltd
D - K
DBS Bank Ltd., Labuan Branch
DEUTSCHE BANK AG
European Credit Investment Bank Ltd.
Europe-Asia Investment Bank Limited
FIDELITY ASIA BANK LTD.
First Abu Dhabi Bank P.J.S.C.
FIRST EAST EXPORT BANK (P.L.C)
Golden Touch Investment Bank Ltd
HO WAH GENTING INVESTMENT BANK (LABUAN) P.L.C.
HONG LEONG BANK BERHAD, LABUAN INTERNATIONAL BRANCH
IBH Investment Bank Limited
INDUSTRIAL AND COMMERCIAL BANK OF CHINA (MALAYSIA) BERHAD, LABUAN INTERNATIONAL BRANCH
ING BANK. N.V.
JPMorgan Chase Bank, National Association
KUWAIT FINANCE HOUSE (LABUAN) BERHAD
L - P
MAYBANK INTERNATIONAL (L) LTD.
MAYBANK INTERNATIONAL LABUAN BRANCH
Mega International Commercial Bank Co., Ltd.
Middle East Investment Bank Ltd.
Mizuho Bank, Ltd., Labuan Branch
MUFG Bank, Ltd., Labuan Branch (fka. T BANK OF TOKYO-MITSUBISHI UFJ, LTD.)
NATIXIS
OVERSEA-CHINESE BANKING CORPORATION LIMITED
Perfect Hexagon Commodity & Investment Bank Ltd
PG ASIA INVESTMENT BANK LTD.
PUBLIC BANK (L) LTD
Q - Z
RHB BANK (L) LTD
RUSD INVESTMENT BANK INC.
Singpoli Investment Bank Limited
STANDARD CHARTERED BANK
SUMITOMO MITSUI BANKING CORPORATION
Taichung Commercial Bank Co., Limited
Taishin International Bank Co. Ltd., Labuan Branch
THE BANK OF EAST ASIA, LIMITED
THE BANK OF NOVA SCOTIA
THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED
UNITED OVERSEAS BANK LIMITED

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Find Labuan Banks and Investment Banks here

View List of Banks

FAQs

1. What is Labuan banking?
Labuan banking means the business of receiving deposits on current accounts, deposit accounts, savings accounts, and includes the investment banking business, Labuan financial business, Islamic banking business and such other transactions and terms and conditions as specified by Labuan FSA in any currency including Malaysian Ringgit where permitted by Bank Negara Malaysia.
2. What is investment banking?
Investment banking means the business of providing credit facilities and consultancy and advisory services relating to corporate and investment matters, including making investments on behalf of any person. Other activities include undertaking foreign exchange transactions, interest rate swaps, dealings in derivative instruments or derivative financial instruments or any other similar risk management activities.
3. What is Islamic banking?
Islamic banking is defined as a banking business that is in accordance with Shariah principles.
4. Who may apply for Labuan banking licence?
Organisations that meet the following minimum criteria may apply for a Labuan banking licence:
Must be a bank or financial institution
Possesses a sound track record
Accorded a good credit rating by acceptable rating agencies
Supervised by a competent regulatory authority; and
Conforms to generally accepted standards of international banking practices or the Bank for International Settlements (BIS).
5. What is the minimum working minimum fund for an investment bank?
RM10 million or its equivalent in any other currency.