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Labuan FSA Notification of Dealing with Malaysians
Labuan FSA recently announced that Labuan companies no longer need to notify the Authority of certain transactions with Malaysian residents.

 
Thus, the previous requirement which states that Labuan companies need to submit a notification within 10 working days of the transactions as listed below, no longer applies.

For reference among the transactions which previously required notification are:
  1. Investment into domestic company pursuant to the previous section 147(1) of the Labuan Companies Act, and 
  2. Labuan company which wholly owns a domestic commpany to carry on offshore business (“satay structure”) 

In addition, Sec 7 (6) of the recently enacted Labuan Companies Act 2010 provides that a Labuan Company need not nofify Labuan FSA of any transactions with a Malaysian resident where:
  1. The Labuan company carries on any licensed activity with a resident under the Labuan Financial Services and Securities Act 2010 or the Labuan Islamic Financial Services and Securities Act 2010. 
  2. The Labuan company makes or maintains deposits with a person carrying on a business within Malaysia. 
  3. The Labuan company makes or maintains professional contact with any counsel, attorney, accountant, bookkeeper, Labuan trust company or a corporation wholly owned by a Labuan trust company made available by the Labuan trust company to act or be appointed as a resident director or a resident secretary of a Labuan company, management company, investment adviser or other similar person carrying on business with Malaysia. 
  4. The Labuan company prepares or maintains books and records within Malaysia. 
  5. The Labuan company holds within Malaysia meetings of its directors or members. 
  6. The Labuan company acquires or holds any lease of any property for the purpose of its operations or as accomodation for its officers or employees. 
  7. A resident of Malaysia holds shares in that Labuan company. 

The lifting of the notification requirement and the allowances as detailed above enshrines provisions of the recent liberalisation which further facilitates the setting up of Labuan companies by Malaysian entities and individuals for non Ringgit business and transactions.
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