Labuan Leasing - Leasing

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Labuan Leasing

Labuan leasing is defined as the business of letting or sub-letting property on hire for the purpose of the use of such property by the hirer, regardless whether the letting is with or without an option to purchase the property, including charters of ships.

Property includes any plant, machinery, equipment or other chattel attached or to be attached to the earth, and charters of ships means bareboat charters only and does not include the transportation of passengers, cargo by sea or the charter of ships on a voyage or time charter basis.

Leasing businesses could be transacted via conventional means or in accordance with Shariah principles.

An applicant is required to submit an application of which the submission should include the following:
A business plan detailing the operations of the applicant and the nature of the leasing transactions, including whether they would be conducted with residents or non-residents
Group corporate shareholding structure
Diagram of leasing transaction
The composition of the board of directors for the proposed leasing company; and
Any other information that may be relevant to the application.
An approved leasing company is required to:
Maintain bank account(s) under its name preferably in Labuan IBFC and Malaysia to facilitate the leasing operation including lease remittances / lease rentals
Comply with any other requirements of the changes being effected by Labuan FSA from time to time
Ensure that the lease agreement is duly stamped and endorsed by the Collector of Stamp Duties, at the Stamp Duty Office of the Inland Revenue Board of Malaysia
Transact business only in foreign currency and not deal in Malaysian Ringgit except for the purpose of defraying administrative and statutory expenses as permitted under the Financial Services Act 2013
Notify Labuan FSA of any changes to its constituent documents and business plans within 30 days
Obtain approval from Labuan FSA on any new appointments or changes to its directorship and shareholding information
Notify Labuan FSA on the termination and extension of any leasing transactions within 30 days upon the termination / extension
Conduct its business with due diligence and sound principles and comply with the laws and regulations where it conducts its leasing business
Ensure all transactions are done through Labuan, and adequate and proper records and books of accounts are maintained in Labuan
Ensure all its leased assets are adequately insured; and
Ensure all leasing transactions with its related party comply with the transfer pricing rules issued by the related party’s relevant authorities.
All licensees are required to pay to Labuan FSA annual licence fees on or before 15 January of each year:
Type of Fees
Amount
Lease to Non-Malaysian Residents
Annual Fee
RM 60,000
USD 20,000
Nil
Each Subsequent Leasing Transaction
RM 20,000
(One off)
USD 6,000
Nil