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Guidelines on Prescribed Labuan Business Activities for Non-Licensed Trading Entities in LIBFC
As highlighted in an earlier alert, the Labuan Financial Services Authority (LFSA) issued a Frequently Asked Questions (FAQs) document dated 14 December 2021 in relation to the Labuan Business Activity Tax (Requirements for Labuan Business Activity) Regulations 2021 (Regulations) (see Tax Alert No. 25/2021). The FAQs document was intended to provide guidance on the types of activities that fall within the list of prescribed services outlined below (i.e., per Item 20 of the First Schedule of the Regulations), pending the issuance of Guidelines under Section 4A of the Labuan Financial Services Authority Act 1996 (LFSAA):
i) administrative
ii) accounting
iii) legal
iv) backroom processing
v) payroll
vi) talent management
vii) agency
viii) insolvency-related
ix) management
Following the above, the LFSA has issued the Guidelines on Prescribed Labuan Business Activities for Non-Licensed Trading Entities in LIBFC (Guidelines) dated 24 January 2022. The Guidelines reiterate the types of activities that fall within the above-mentioned types of services per the FAQs, and apply to any Labuan financial institution (as defined in Section 2(1) of the LFSAA) that undertakes any Labuan business activity prescribed in Item 20 of the First Schedule of the Regulations.
The Guidelines are deemed to have come into effect on 1 January 2019.