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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.
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.
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.