October 16, 2021

Healy Consultants Group Blog

Company registration, Offshore incorporation, Global corporate services

How we secured a payment services license in Labuan

Labuan. Self-proclaimed ‘Pearl of Borneo’. Respected Asian financial centre and an attractive option for our multinational Clients in the increasingly competitive payment services space.

A federal territory located just off the coast of the Malaysia’s Sabah state, Labuan has carved a niche as a reputable Asian financial services hub. As a financial centre, it is a far cry from Hong Kong or Singapore, but FinTech is big business in Labuan. In 2020, there were 46 FinTech companies registered in the Labuan International Financial Centre, taking advantage of the well-developed regulatory framework, 100% foreign ownership of companies and an attractive tax regime.

Against this background, I recently took on an assignment to set up a Client’s payment services company in Labuan. The Client already holds a Payment Service Provider (PSP) license issued by the Philippines central bank and is based in the Philippines.

To conduct payment services in Labuan, a license is similarly required. This is achieved by first submitting documents and an application for licence pre-approval to the Labuan Financial Services Authority (FSA). After submission, we were able to procure the pre-approval from the Labuan FSA within two months.

Once we had received FSA pre-approval, to acquire the full licence from FSA, other requirements had to be met. The requirements are as follows: increasing the paid-up capital of the Labuan entity to US$125,000, paying the FSA licence fee, securing a management office in Labuan and appointing two directors for the Labuan company who meet the ‘fit and proper’ person guidelines.

Healy Consultants Group PLC guided the Client throughout the entire process. Once the above requirements were met, we submitted the complete application package to Labuan FSA. Within a month, we had obtained the full PSP licence in Labuan for our Client.

One of the biggest challenges of this engagement was to secure the corporate bank account numbers without our Client having to travel to Labuan. Due to the pandemic, it was impossible for our Client, based in the Philippines, to travel to the bank branch in Labuan. Fortunately, we located a branch of the same bank in the Philippines, and set up an appointment for our Client with a bank officer to complete the formalities.

If done correctly, setting up a business with a PSP licence in Labuan is simple and straightforward. I’m happy to report that, because of the efficient way in which we handled this engagement, our Client engaged our firm for other business set-ups in Ireland, Hong Kong and elsewhere.

It also remains satisfying that we are able to successfully complete engagements without our Clients having to travel. For all of us, Labuan’s dreamy coastlines will have to wait for now! The only constant is change, and in an unpredictable world our Clients appreciate our ability to keep things simple and get results.

Read more about securing a Labuan Payment System Operator (PSO) licence here.