You have decided to start your own brokerage firm. Perhaps you have heard that there is a lot of money to be made and want to join the bandwagon. Perhaps it is your long term dream to own a brokerage firm. Whatever your reason, choosing Labuan is one of the wisest decisions that you can make in your forex brokerage journey.
The Labuan jurisdiction makes it easy to start a money brokering or a forex business with 100% foreign ownership. One advantage of the Labuan forex license is the 3% taxation on the profits you make. It is the lowest you will find in Asia.
More importantly, the process of attaining a license in Labuan has a shorter time frame as compared to other regions. On average, the processing takes only 2 months. If you are looking for a forex license in Asia, here is a short guide on what you need to receive one in Labuan:
A. Understand the Requirements
The Labuan authorities must verify that your forex company (if you have one) has registered employees and offices in Labuan. Also, you must show that all your dealings will go through the office. Here are other requirements to consider:
1. You must be a money broker licensed domestically and your company’s incorporation ought to be under the Labuan Companies Act (1990).
2. Evidence showing a good financial performance or track record, for at least three years, preceding your application.
3. You must also show commitment to setting up functional operations in Labuan if you haven’t done so.
B. Documents Needed
There are several documents you must present to get your Labuan Forex License. They include letters, approval certificates, declarations, and others. Here is a listing illustrating each document requirement:
• Undertaking Letter: This is the letter from your parent company/ head office showing that it will undertake liabilities arising from operation in Labuan. It is especially important if you’re setting up a branch or subsidiary in the jurisdiction.
• Labuan FSA approval: It is a document showing that all company directors have approval as proper and fit persons.
• Declaration: You will need to present signed secrecy and confidentiality declarations by your directors and senior staff.
• Business Plan: It is a detailed document illustrating your business’ strategies and operations with regards to the Labuan jurisdiction.
• Audited Financial Statements: This category includes your Company’s statements for the last two years prior to the license application.
The business advantages in Labuan make it an ideal place to start forex brokerage entity. Even so, it is important to realize all requirements to avoid delays during the application process. By acquiring before-hand everything listed above, you will get your license in the shortest time possible.
