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How to register a payment system (PS) in Labuan

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Registering a payment institution in Labuan in 2020

Pros of opening a payment system in this jurisdiction:

  • Developed financial services sector;
  • 100% foreign ownership is possible;
  • There are no requirements for the payment of VAT, capital gains tax, and tax on profit repatriation;
  • Relatively simple conditions for obtaining a license in order to provide payment services.
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The idea of ​​registering a payment system is aimed at cashless transactions (using a debit card, a credit card, the online banking).

There are two types of PS models in Labuan, which are:
  • a single payment merchant system (SPMS);
  • the collective payment merchant system (CPMS).
Model 1: registering the SPMS in Labuan

Such registration allows the Merchant to provide the Client with more options for paying services both online/offline. As a result, it is possible to reduce labor costs, risks of loss or theft, since a cash is not present in circulation.

Model 2: opening a Labuan CPMS

Registering a financial institution connects the Client with the Seller's Partners (Merchant) in his community. A system unites all sellers in the community, using the principle of electronic wallets. It helps to increase sales and expand the customer database.

Registering a payment system in Labuan. A taxation

If you decide to obtain a license in Labuan, you should consider the following nuances:

  • no need for local Malaysian partners;
  • 3% tax or a flat fee of approximately $5,000 from trading profits;
  • a zero tax on the repatriation of income from interest, royalties and from management/maintenance fees;
  • no state duty, VAT;
  • no tax on sales and services;
  • no capital gains;
  • no dividend tax;
  • 70 double taxation treaties of Malaysia;
  • 50% tax reduction for foreign specialists;
  • no taxes for foreign and local directors;
  • the possibility of obtaining a multi-entry work visa for 2 years with the possibility of staying and working in Malaysia.
A commercial component for the tax transparency of your business

Since the costs of operating activities in Labuan are very low (the office rental, a hiring staff, professional legal services), we advise clients, who want to obtain a license for the payment system in Labuan, to use these advantages to prove the transparency of the business. Thus, with the help of evidence of a commercial component, your business will comply with CRS standards.

Read also:
Qualification requirements

To apply for a payment system license in Labuan, the following conditions must be observed:

  • The company must have positive financial statements for three years and have a new model of the payment system (you can check with our company specialists in more detail).
  • The company must be with an existing payment system (in case of transfer of the business to the Malaysian region).
  • A proof of the capital in the amount of $100,000.
Stages of the organization of the payment system
  • A preliminary approval of the business model with the Financial Services Authority of Labuan.
  • The consideration of an application for a license for a payment system in Labuan (term 1,5-2 months).
  • A company registration in Labuan.
  • The organization of a physical office.
  • Opening a bank account in Labuan.
How to get a payment system license in Labuan?

Contact IQD Consulting team for a payment system license in Malaysia. You will receive step-by-step a support and qualified assistance in the design of a promising and profitable business in Labuan.

  • IQD Consulting shall not be liable for any direct, indirect or consequential loss arising from the use of the information and material contained in this website.
  • Please, consider contacting our experts for possible solutions for your business.
  • Still have questions? Please, fill out the form or contact us in whatever way you find best.

    Our experts will be happy to answer your questions.

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