Guidelines on establishing a Labuan company management business

Guidelines on establishing a Labuan company management business

The Labuan Financial Services Authority (LFSA) has issued revised guidelines dated 1 March 2021 on the establishment of a Labuan company management business in the Labuan International Business and Financial Centre (IBFC). The six-page guidelines replace the earlier guidelines dated 14 May 2019 and comprise the following paragraphs:

1.0          Introduction

2.0          Applicability

3.0          Permissible activities

4.0          Eligibility

5.0          Effective date

6.0          Application requirements

7.0          Operational requirements

8.0          Annual licence fee

9.0          Submission of application and enquiries

Appendix

The new guidelines are effective from 1 March 2021. Although the new guidelines supersede the earlier 2019 guidelines, the new guidelines specify that all approvals already granted shall remain valid unless otherwise revoked.

Some of the key changes are outlined below.

1.    The new guidelines stipulate that the permissible activities of a company management firm are as follows:

(a)   Provision of treasury processing services for its group of related companies regionally or internationally. The said services include:

-        Arranging intra-group financing or factoring

-        Managing cash and liquidity positions or

-        Providing in-house investment or finance advisory services

(b)  Provision of managerial services as follows:

-        Back-room and middle office services

-        Act as authorized representatives for support services or

-        Intermediation functions, excluding financial intermediation services conducted by financial institutions (FIs) such as commercial banks, investment banks, (re)insurers, fund managers and money brokers etc.

The services may be conducted based on conventional or Islamic requirements.

2.    The eligibility criteria, operational requirements and annual licence fee have been updated in the new guidelines.

3.    The new guidelines outline the application process for a Labuan company intending to carry out a company management business in Labuan IBFC.

4.    The new guidelines should be read together with the requirements of the relevant guidelines and circulars, including the following:

i.           Guidelines on Fit and Proper Person Requirements

ii.         Guidelines on Compliance Function for Labuan Licensed Entities

iii.        Directive on Financial Reporting Standards for Labuan FIs

iv.        Circular on Financial Reporting Standards for Labuan FIs

v.         Directive on Accounts and Record-keeping Requirements for Labuan Entities

vi.        Guidelines on External Auditor of Labuan FIs

vii.       Guidelines on Shariah Governance for Labuan Islamic FIs

viii.     Directive on Islamic Financial Business in Labuan IBFC

The guidelines are available on the LFSA website [Other Businesses - Guidelines | Labuan FSA  > Company Management Business in Labuan IBFC > Guidelines for Company Management Business in Labuan IBFC]