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Labuan International Commodity Trading Company (LITC)

The Global Incentives for Trading (GIFT) programme is aimed at positioning Malaysia as a regional trading and storage hub for oil and gas. Under the programme, a set of incentives are offered through the establishment of the Labuan international commodity trading company (LITC), including incentives for traders and trading houses to use Malaysia as their international trading base.

The Labuan international commodity trading business is the trading of physical and related derivative instruments of:
  1. petroleum and petroleum-related products including liquefied natural gas (LNG)
  2. agriculture products
  3. refined raw materials
  4. chemicals; and
  5. base minerals,
in any currency other than the Malaysian Ringgit.

An LITC is to deal only with non-residents in any currency other than Malaysian Ringgit. However, an LITC that trades commodities as specified under item 1 above and coal is permitted to deal with residents in any currency other than Malaysian Ringgit.
  • Any qualified person intending to undertake the Labuan international commodity trading business under the GIFT programme may apply to Labuan FSA for a licence to carry out such business activities. The qualifying criteria include the following:
    1. Generate a minimum annual total revenue of USD100 million
    2. Spend a minimum of RM3 million in annual local expenditure billed to a Malaysian entity; and
    3. Employ a minimum of three professional traders.
  • The applicant:
    1. must have sufficient capital / working funds that commensurate or are in accordance with its operations and activities
    2. must clearly indicate on its letterhead, stationery and other documents, including signage containing its name that it is licensed as a "Labuan International Commodity Trading Company" under the Labuan Financial Services and Securities Act 2010, together with its licence number
    3. must maintain its registered office in Labuan, which is the office of the Labuan trust company but is allowed to establish its operations office(s) and operate anywhere in Malaysia
    4. must ensure that the business is conducted with proper corporate governance with a risk management framework in place; and
    5. comply with other requirements of Labuan laws and regulations.
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