Factoring

Factoring business means is the acquiring of accounts receivables due to international business at a discounted interest rate and is further defined under Section 86, Labuan Financial Services and Securities Act 2010.

A Labuan Company involved in factoring business is deemed a Labuan Trading Company, as defined in Section 2 of the Labuan Business Activity Tax Act 1990 and has a yearly election of either paying a flat tax rate of MYR20,000 per annum, or 3 percent of audited net profit.

Qualifications

Applicants for a factoring license could be any one of the following entities and should not have any adverse reports against it from a reliable source:

Labuan company incorporated or registered under the Labuan Companies Act 1990

Special Purpose Vehicle set up to facilitate inter-company factoring transactions
Factoring companies already registered under the Malaysian Banking and Financial Institutions Act 1989

Last Updated on Monday, 27 June 2011 00:54

GUIDELINES

Application Requirements

All applications should be directed to Director General, Labuan FSA and should include, amongst others the following:

the nature of the business of the applicant
a business plan detailing the operations and strategies of the applicant
the composition of the Board of Directors and senior management of the applicant (please note that prior written approval of Labuan FSA must be obtained for the appointment of directors, controller or chief executive officer)
audited financial statements of the applicant for the last two years, if applicable, and
any other information that is relevant to the application.

Operational Requirements

The applicant company:

has an option of either setting up an office in Labuan or operating through its registered office, however all transactions must be done through Labuan and adequate and proper records and books of accounts must be maintained in Labuan
must maintain capital sufficient to manage the company’s daily operations
must transact in currencies other than the Malaysian Ringgit, except as permitted by the relevant legislations and authorities
is prohibited from dealing with Malaysian residents other than those approved by the Malaysian Central Bank
must conduct its business with due diligence and sound principles and comply with the local laws and regulations where it services its clients
indicate clearly its name on its letterhead, stationery and other documents
must appoint an auditor
is to submit to Labuan FSA within three months after the close of each financial year, one copy of its audited annual balance sheet and profit and loss account
is to provide statistics and information as required by Labuan FSA in relation to prudential information, general business conduct and volume and direction of business in Labuan
must notify Labuan FSA of any change to its constituent documents, shareholdings, management or business plan
is to provide a signed declaration by directors and senior staff of the applicant on confidentiality and secrecy
must adhere to any other requirements issued by Labuan FSA from time to time.

Annual Fee

All licensees are required to pay Labuan FSA an annual licence fee on or before 15th January each year the following sum:

MYR40,000 for factoring firms with a physical presence in Labuan
MYR60,000 for factoring firms without physical presence in Labuan

..back to top

Who We Are

Labuan IBFC Inc Sdn Bhd is the sole official Malaysian agency authorised to promote, market and develop the benefits of Labuan IBFC as a premier international business and financial centre in Asia Pacific. In addition, Labuan IBFC Inc advises Labuan FSA on the development of all business sectors and ...

More about us

Business Opportunities

Quick Links
Modern Legislation Fiscal Structure FAQs Directory Events

Contact Info

Labuan IBFC Inc. Sdn. Bhd.
(817593-D)
Suite 3A-2, Plaza Sentral,
Jalan Stesen Sentral, KL Sentral
50470 Kuala Lumpur, Malaysia
t. +603 2773 8977
f. +603 2780 2077
e. info@LabuanIBFC.my

Hong Kong representative office
Suite 1102 11/F
Malaysia Building
No. 50 Gloucester Road
Hong Kong, SAR
t: +852 2527 2318
f: +852 2520 2938