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Commodity Trading

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 LITC’s business is the trading of physical and related derivative instruments of petroleum and petroleum-related products including liquefied natural gas (LNG).
key highlights
42 number of Labuan International Commodity Trading Companies (LITCs) in 2020

  • Majority of the LITCs were from Asia and the Pacific, mainly from Malaysia and Singapore. The remaining 19.1% were spread throughout, with the most from the Far East region
  • Petroleum and petroleum-related products constituted 87.7% of the total commodities traded. The agriculture products and refined raw materials contributed 7.2% and 5.1% share of the total, respectively in 2020

  • POST-LICENSING REQUIREMENTS
  • OPERATIONAL REQUIREMENTS
  • POST-LICENSING REQUIREMENTS
    1. Achieve annual minimum turnover of USD50 million; 
    2. Incur minimum annual business spending of RM3 million payable to Malaysian residents in Malaysian Ringgit; and 
    3. Employ at least three professional traders that fulfill the following requirements: 
      1. The Principal officer or any person performing a senior management function who would be principally accountable for:
        1. making decisions that affect the whole, or a substantial part of the LITC business;
        2. implementing and enforcing policies and strategies approved by the LITC’s Board of Directors including Head of Department or any equivalent designated person; or
        3. internal controls and processes of the LITC. 
      2.  These professional traders shall be involved in any one of the following areas: 
        1. Trading; 
        2. Risk Management; 
        3. Procurement; or 
        4. Sales & Marketing. 

    These professional traders shall be residents of Malaysia in a calendar year for the year of assessment under the Income Tax Act 1967 (ITA)
  • OPERATIONAL REQUIREMENTS

    1. The LITC must have sufficient capital or working funds that commensurate with its operations and activities. 
    2. The LITC must indicate clearly on its letterhead, stationery and other documents including signage containing its name that it is licensed as a “Labuan International Commodity Trading Company licensed by Labuan FSA”, together with its licence number.
    3. The LITC is required to establish its operational office, which can be anywhere in Malaysia. The following details must be identified and provided to Labuan FSA prior to the commencement of business:
      1. Principal Officer
        • Name, designation and contact details such as telephone number and e-mail address of the officer that is in charge of the LITC.
      2. Address of Operational Office
        • To provide address and staffing plan at its operational office. 
    4. The LITC must ensure that its business is conducted with both corporate governance and risk management frameworks in place.
    5. Ensure that the Principal Officer, Director(s) and Officer(s) responsible for the management of the company are fit and proper persons pursuant to Section 4 of LFSSA and the Guidelines on Fit and Proper Person Requirements issued by Labuan FSA. 
    6. The LITC is required to submit to Labuan FSA the following:
      1. The completed Annual Update Submission Form latest by 15 January of each year (as per Appendix I); and
      2.  A copy of its audited financial statements within six (6) months after the close of each financial year. 
    7. Obtain prior approval from Labuan FSA on any new changes being effected on the following:
      1. Business plan;
      2. Principal Officer;
      3. Directorship; and
      4. Shareholding.
    8. The LITC is expected to comply with all the requirements of this Guidelines as well as the relevant requirements under LCA, LFSSA, other Labuan legislations and the laws of the jurisdictions in which the LITC operates from, whichever applicable. 

  • Post-Licensing Requirements
    1. Achieve annual minimum turnover of USD50 million; 
    2. Incur minimum annual business spending of RM3 million payable to Malaysian residents in Malaysian Ringgit; and 
    3. Employ at least three professional traders that fulfill the following requirements: 

      1. The Principal officer or any person performing a senior management function who would be principally accountable for:

        1. making decisions that affect the whole, or a substantial part of the LITC business;
        2. implementing and enforcing policies and strategies approved by the LITC’s Board of Directors including Head of Department or any equivalent designated person; or
        3. internal controls and processes of the LITC. 

      2.  These professional traders shall be involved in any one of the following areas: 

        1. Trading; 
        2. Risk Management; 
        3. Procurement; or 
        4. Sales & Marketing. 

    These professional traders shall be residents of Malaysia in a calendar year for the year of assessment under the Income Tax Act 1967 (ITA)
  • Operational Requirements

    1. The LITC must have sufficient capital or working funds that commensurate with its operations and activities. 
    2. The LITC must indicate clearly on its letterhead, stationery and other documents including signage containing its name that it is licensed as a “Labuan International Commodity Trading Company licensed by Labuan FSA”, together with its licence number.
    3. The LITC is required to establish its operational office, which can be anywhere in Malaysia. The following details must be identified and provided to Labuan FSA prior to the commencement of business:

      1. Principal Officer
        • Name, designation and contact details such as telephone number and e-mail address of the officer that is in charge of the LITC.

      2. Address of Operational Office
        • To provide address and staffing plan at its operational office. 

    4. The LITC must ensure that its business is conducted with both corporate governance and risk management frameworks in place.
    5. Ensure that the Principal Officer, Director(s) and Officer(s) responsible for the management of the company are fit and proper persons pursuant to Section 4 of LFSSA and the Guidelines on Fit and Proper Person Requirements issued by Labuan FSA. 
    6. The LITC is required to submit to Labuan FSA the following:

      1. The completed Annual Update Submission Form latest by 15 January of each year (as per Appendix I); and
      2.  A copy of its audited financial statements within six (6) months after the close of each financial year. 

    7. Obtain prior approval from Labuan FSA on any new changes being effected on the following:

      1. Business plan;
      2. Principal Officer;
      3. Directorship; and
      4. Shareholding.

    8. The LITC is expected to comply with all the requirements of this Guidelines as well as the relevant requirements under LCA, LFSSA, other Labuan legislations and the laws of the jurisdictions in which the LITC operates from, whichever applicable. 

Governing Legislation
Labuan Financial Services and Securities (Amendment) Act 2022 (Act A1654)
Labuan Companies Act 1990
Related Guidelines and Circulars
Guidelines on the Establishment of Labuan International Commodity Trading Company under the Global Incentives for Trading Programme
LITC Company Annual Update Submission Form
Directive on Labuan International Commodity Trading Company Trading in Non-Petroleum and Non-Petroleum-Related Commodities
List of Labuan International Commodity Trading Companies
  • A - F
  • G - M
  • N - S
  • T - Z
List of Banking Institutions Providing Commodity Trading Financing
List of Labuan International Commodity Trading Companies
  • A - F
  • G - M
  • N - S
  • T - Z
  • A - F
    • AGO Energy 47 Inc.
    • APSA INTERNATIONAL MALAYSIA PTE LTD.
    • ASIAN TRADES & INVESTMENTS CORPORATION LTD.
    • Awin Resource (Malaysia) Ltd
    • B.B. ENERGY MALAYSIA LTD.
    • CCK Petroleum (Labuan) Limited
    • Cergas Energy Limited
    • CONTINENTAL PLATFORM (LABUAN) LTD
    • Dialog Systems (Labuan) Ltd.
    • Ensa Energia A.G.
    • Farlin International Corporation Ltd.
    • Farlin Trading Ltd.
  • G - M
    • GK Pacific Limited
    • GLOBAL LNG (LABUAN) LTD
    • HORIZON PETROLEUM LIMITED
    • Intra Asia (Malaysia) Pte. Ltd.
    • Irfaz International Limited
    • JD Resources Limited
    • JOSOVINA COMMODITIES TRADING LTD.
    • MALAYSIA HENGYUAN INTERNATIONAL LIMITED
    • Malaysia Refined Gas & Oil Limited
    • Marin Selatan Limited
  • N - S
    • PETCO Trading Labuan Company Ltd
    • PETRONAS Chemicals Marketing (Labuan) Ltd
    • PETRONAS FLOATING LNG 1 (L) Ltd
    • PETRONAS FLOATING LNG 2 (L) Ltd
    • PETRONAS LNG Ltd.
    • PP METALLIX LTD
    • QL International Pte. Ltd.
    • Sea Oil Offshore Ltd.
    • Sime Darby Global Trading (Labuan) Limited
    • SPRING METAL LIMITED
    • Synergy Energy (Labuan) Ltd.
  • T - Z
    • TAK Group Resources Ltd
    • Talos Commodities Ltd.
    • Toprich Sources International Trading Limited
    • Triumph Metals and Minerals (Labuan) Limited
    • UIL Malaysia Ltd.
    • Ultimate Supply Ltd.
    • VICTORIA INTERNATIONAL PETROLEUM CORP.
    • VITOL TRADING MALAYSIA LABUAN LTD
    • Welltrade Limited
    • WESTSUN INVESTMENT COMPANY LTD.
    • Wilson International Trading (L) Bhd.
    • YTL Power Trading (Labuan) Ltd
  • A - F
  • G - M
  • N - S
  • T - Z
List of Banking Institutions Providing Commodity Trading Financing
Search for Labuan Companies

For company search, please click on the link provided : https://www.lfsacoral.gov.my/reefs/
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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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