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Business
Discover the wide range of business and financial services available in Labuan IBFC
Factoring
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1. What is the Labuan factoring business?
Labuan factoring means the business of acquiring debts to any person or institution at a discount or such other business as approved by Labuan FSA.
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2. Who would be eligible to apply for a Labuan factoring licence in Labuan?
An applicant should meet the following minimum eligibility criteria:
- A Labuan company incorporated or registered under the Labuan Companies Act 1990
- A factoring company registered under the Banking and Financial Institutions Act 1989; and
- A special purpose vehicle (SPV) set up to facilitate inter-company factoring transactions.
- A Labuan company incorporated or registered under the Labuan Companies Act 1990
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3. How is the income of a Labuan entity from the factoring business taxed?
The income is taxed in a similar manner as other Labuan entities under the Labuan Business Activity Tax Act 1990 (LBATA). The rate of tax imposed is 3% of audited net profits or fixed tax of RM20,000, as elected.
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4. What is the governing legislation for the Labuan factoring business?
The Labuan factoring business is governed by the following Labuan laws:
- Labuan Financial Services and Securities Act 2010
- Labuan Business Activity Tax Act 1990
- Labuan Financial Services and Securities Act 2010
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5. What are the fees payable by Labuan factoring companies in Labuan IBFC?
The fees payable are illustrated in the table below:Type of FeesAmountProcessing FeeRM1,000USD350Annual FeeRM40,000USD13,000All licensees are required to pay to Labuan FSA annual licence fees on or before 15 January of each year.
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