Guidelines On Carrying Out Factoring Business In Labuan

1. What is factoring business?

Factoring business means the business of acquiring debts due to any person as defined under the Labuan Financial Services and Securities Act 2010.

2. Who qualifies?

Applicant should meet the following minimum criteria

  • Labuan company incorporated or registered under the Labuan Companies Act 1990
  • Factoring companies registered under the Banking and Financial Institutions Act 1989
  • Special Purpose Vehicle (SPV) set up to facilitate inter-company factoring transactions
  • No adverse report from any reliable sources

3. What is required?

Applicant should meet the following minimum criteria

  • The applicant company must pay an annual fee of RM40,000 to The Authority on or before every 15th day of January for those with physical presence and RM60,000 for those without physical presence
  • Signed declaration by directors and senior staff of the applicant on confidentiality and secrecy

4. Operational requirement

The applicant company

  • has an option to either set up an office in Labuan or operate 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‚Äôs daily operations
  • must transact business only in foreign currency and not deal in Malaysian Ringgit except for the purpose of defraying administrative and statutory expenses
  • is prohibited from dealing with Malaysian residents other than those approved by the Bank Negara Malaysia
  • 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 The Authority 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 The Authority in relation to prudential information, general business conduct and volume and direction of business in Labuan
  • must notify The Authority of any change to its constituent documents, shareholdings, management or business plan
  • any other requirements issued by The Authority from time to time