Labuan Islamic Banking

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Labuan Islamic banking is defined as:

  • The business of receiving deposits on a current account, deposit account, savings account or any other account in compliance with Shariah principles as may be specified by Labuan FSA
  • Labuan Islamic investment banking business
  • Labuan Islamic banking business, or
  • Such other business as Labuan FSA may specify, with the approval of the Minister of Finance, in any currency (including in Malaysian Ringgit where permitted by the Financial Services Act 2013 or such other relevant law in force).
key highlights

  • 20 number of operators, comprising 2 full-fledged commercial banks, 1 full-fledged investment bank and 16 window operators in 2020
  • USD1,547.6 million of total financing in 2020
  • USD183.1 million of total deposits in 2020

  • Entry Requirements
  • Application Requirements
  • Operational Requirements
  • Fees
  • Entry Requirements
    An applicant should meet the following minimum eligibility criteria:

    • Must be a bank or financial institution
    • Possesses a sound track record
    • Accorded a good credit rating by acceptable rating agencies
    • Supervised by a competent regulatory authority; and
    • Conforms to generally accepted standards of international banking practices or the Bank for International Settlements (BIS), as the case may be.
  • Application Requirements
    An applicant is required to submit an application of which the submission should include the following:

    1. A letter of awareness from a competent regulatory authority that supervises the applicant's shareholder/head office.
    2. A letter of guarantee from the applicant's shareholder or an undertaking from the head office.
    3. Business plans inclusive of three years' financial projections of the applicant.
    4. Certified true copy of the Memorandum and Articles of Association of the applicant.
    5. Certified true copy of the resolutions of the board or minutes of the general meeting, which approve the applicant to apply for a licence.
    6. Copy of the audited annual accounts of the applicant's shareholder/head office for the three preceding years.
    7. Applicant's corporate profile, which includes:
      • The name, place and date of establishment of the applicant.
      • The names, addresses, qualifications and experience of the directors and officers responsible for the overall management of the affairs of the applicant.
      • The name and address of each member who holds 10% or more of the voting shares of the applicant.
    8. Declaration by the applicant on the probity of its directors and officers who are responsible for the management of the applicant.
    9. Information on its own internal Shariah Advisory Board (SAB).
    10. Any other information relevant to the application.
  • Operational Requirements
    • Maintain a physical presence in Labuan.
    • Every director or principal officer (PO) of a Labuan Islamic bank must be fit and proper persons and shall not be subject of any adverse report from any reliable sources. The appointment of a director or PO of a Labuan Islamic bank must obtain prior approval from Labuan FSA.
    • Comply with the statutory requirements under the Labuan Islamic Financial Services and Securities Act 2010.
    • Comply with the prudential and reporting requirements issued by Labuan FSA.
    • Adhere to any other requirements issued by Labuan FSA from time to time.
    • Meet certain pre-determined criteria, should it prefer to co-locate to any other parts of Malaysia.
  • Fees
    All licensees are required to pay to Labuan FSA annual licence fees on or before 15 January of each year:
    Type of fees
    Amount
    Annual Fee
    RM100,000
    USD30,000
    Marketing Office Fee
    RM7,500
    USD2,500
    Co-Located Office Fee
    RM10,000
    USD3,500
  • Entry Requirements
    An applicant should meet the following minimum eligibility criteria:

    • Must be a bank or financial institution
    • Possesses a sound track record
    • Accorded a good credit rating by acceptable rating agencies
    • Supervised by a competent regulatory authority; and
    • Conforms to generally accepted standards of international banking practices or the Bank for International Settlements (BIS), as the case may be.
  • Application Requirements
    An applicant is required to submit an application of which the submission should include the following:

    1. A letter of awareness from a competent regulatory authority that supervises the applicant's shareholder/head office.
    2. A letter of guarantee from the applicant's shareholder or an undertaking from the head office.
    3. Business plans inclusive of three years' financial projections of the applicant.
    4. Certified true copy of the Memorandum and Articles of Association of the applicant.
    5. Certified true copy of the resolutions of the board or minutes of the general meeting, which approve the applicant to apply for a licence.
    6. Copy of the audited annual accounts of the applicant's shareholder/head office for the three preceding years.
    7. Applicant's corporate profile, which includes:

      • The name, place and date of establishment of the applicant.
      • The names, addresses, qualifications and experience of the directors and officers responsible for the overall management of the affairs of the applicant.
      • The name and address of each member who holds 10% or more of the voting shares of the applicant.

    8. Declaration by the applicant on the probity of its directors and officers who are responsible for the management of the applicant.
    9. Information on its own internal Shariah Advisory Board (SAB).
    10. Any other information relevant to the application.
  • Operating Requirements
    • Maintain a physical presence in Labuan.
    • Every director or principal officer (PO) of a Labuan Islamic bank must be fit and proper persons and shall not be subject of any adverse report from any reliable sources. The appointment of a director or PO of a Labuan Islamic bank must obtain prior approval from Labuan FSA.
    • Comply with the statutory requirements under the Labuan Islamic Financial Services and Securities Act 2010.
    • Comply with the prudential and reporting requirements issued by Labuan FSA.
    • Adhere to any other requirements issued by Labuan FSA from time to time.
    • Meet certain pre-determined criteria, should it prefer to co-locate to any other parts of Malaysia.
  • Fees
    All licensees are required to pay to Labuan FSA annual licence fees on or before 15 January of each year:
    Type of fees
    Amount
    Annual Fee
    RM100,000
    USD30,000
    Marketing Office Fee
    RM7,500
    USD2,500
    Co-Located Office Fee
    RM10,000
    USD3,500
Additional Incentives

Under the Malaysia International Islamic Financial Centre's (MIFC) initiative, Labuan Islamic banks are given greater flexibility as follows:

  1. Exemption from maintaining physical presence in Labuan. The Labuan Islamic banks may open operations offices anywhere in Malaysia, subject to consideration by Labuan FSA.
  2. No limitation on the staffing and number of operations offices to be opened outside Labuan.
  3. The operations offices are to conduct Islamic financial business in non-Ringgit currencies and deal mainly with non-residents as per Labuan legislation.
  4. Dealings with residents in non-Ringgit transactions are allowed as permitted under the current foreign exchange administration policies.
List of Labuan Banks and Investment Banks

  • A - C
  • D - K
  • L - P
  • Q - Z
List of Labuan Banks and Investment Banks

  • A - C
  • D - K
  • L - P
  • Q - Z
  • A - C
    • ACE Investment Bank Limited
    • AmanahRaya Investment Bank Ltd
    • AmBank (M) Berhad, Labuan Offshore Branch
    • Asia Digital Bank Ltd (Labuan Investment Bank)
    • Asia Investment Banking Corporation
    • Asia Pacific Investment Bank Ltd.
    • BANK AL HABIB LIMITED
    • Bank Islam Malaysia Berhad (BIMB) Labuan Offshore Branch
    • Bank Muamalat Malaysia Berhad, Labuan Offshore Branch
    • BANK OF AMERICA, NATIONAL ASSOCIATION
    • Baxian Private & Investment Bank Ltd
    • BNP PARIBAS
    • Capital Investment Bank (Labuan) Limited
    • Cathay United Bank, Labuan Branch
    • China Construction Bank Corporation, Labuan Branch
    • CIMB BANK (L) LIMITED
    • CIMB BANK BERHAD, LABUAN OFFSHORE BRANCH
    • Citibank N.A., Labuan Branch
    • CITY CREDIT INVESTMENT BANK LIMITED
    • Credit Investment Bank Ltd
  • D - K
    • DBS Bank Ltd., Labuan Branch
    • DEUTSCHE BANK AG
    • European Credit Investment Bank Ltd.
    • Europe-Asia Investment Bank Limited
    • FIDELITY ASIA BANK LTD.
    • First Abu Dhabi Bank P.J.S.C.
    • FIRST EAST EXPORT BANK (P.L.C)
    • Golden Touch Investment Bank Ltd
    • HO WAH GENTING INVESTMENT BANK (LABUAN) P.L.C.
    • HONG LEONG BANK BERHAD, LABUAN INTERNATIONAL BRANCH
    • IBH Investment Bank Limited
    • INDUSTRIAL AND COMMERCIAL BANK OF CHINA (MALAYSIA) BERHAD, LABUAN INTERNATIONAL BRANCH
    • ING BANK. N.V.
    • JPMorgan Chase Bank, National Association
    • KUWAIT FINANCE HOUSE (LABUAN) BERHAD
  • L - P
    • MAYBANK INTERNATIONAL (L) LTD.
    • MAYBANK INTERNATIONAL LABUAN BRANCH
    • Mega International Commercial Bank Co., Ltd.
    • Middle East Investment Bank Ltd.
    • Mizuho Bank, Ltd., Labuan Branch
    • MUFG Bank, Ltd., Labuan Branch (fka. T BANK OF TOKYO-MITSUBISHI UFJ, LTD.)
    • NATIXIS
    • OVERSEA-CHINESE BANKING CORPORATION LIMITED
    • Perfect Hexagon Commodity & Investment Bank Ltd
    • PG ASIA INVESTMENT BANK LTD.
    • PUBLIC BANK (L) LTD
  • Q - Z
    • RHB BANK (L) LTD
    • RUSD INVESTMENT BANK INC.
    • Singpoli Investment Bank Limited
    • STANDARD CHARTERED BANK
    • SUMITOMO MITSUI BANKING CORPORATION
    • Taichung Commercial Bank Co., Limited
    • Taishin International Bank Co. Ltd., Labuan Branch
    • THE BANK OF EAST ASIA, LIMITED
    • THE BANK OF NOVA SCOTIA
    • THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED
    • UNITED OVERSEAS BANK LIMITED
  • A - C
  • D - K
  • L - P
  • Q - Z
Find Labuan Banks and Investment Banks here
FAQs
  • 1. What is Labuan banking?

    Labuan banking means the business of receiving deposits on current accounts, deposit accounts, savings accounts, and includes the investment banking business, Labuan financial business, Islamic banking business and such other transactions and terms and conditions as specified by Labuan FSA in any currency including Malaysian Ringgit where permitted by Bank Negara Malaysia.

  • 2. What is investment banking?

    Investment banking means the business of providing credit facilities and consultancy and advisory services relating to corporate and investment matters, including making investments on behalf of any person. Other activities include undertaking foreign exchange transactions, interest rate swaps, dealings in derivative instruments or derivative financial instruments or any other similar risk management activities.

  • 3. What is Islamic banking?

    Islamic banking is defined as a banking business that is in accordance with Shariah principles.

  • 4. Who may apply for Labuan banking licence?

    Organisations that meet the following minimum criteria may apply for a Labuan banking licence:

    • Must be a bank or financial institution
    • Possesses a sound track record
    • Accorded a good credit rating by acceptable rating agencies
    • Supervised by a competent regulatory authority; and
    • Conforms to generally accepted standards of international banking practices or the Bank for International Settlements (BIS).

  • 5. What is the minimum working minimum fund for an investment bank?

    RM10 million or its equivalent in any other currency.

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Stay ahead of the game
Access a wealth of information from Labuan IBFC from reports on forward-thinking research to insightful articles.
Get in touch
Interested to setup your business in Labuan? Speak to our dedicated advisors to find out more.
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