Why Choose Labuan for a Crypto License
Labuan might be a small island with just over 100,000 residents, but it’s become a serious player in the global financial scene. Over the past few years, the island has turned into a hotspot for crypto businesses, from exchanges to blockchain startups. Getting a labuan crypto license means setting up shop in a place with low taxes, streamlined company registration, and a regulator that actually understands digital assets. This makes it a hidden gem compared to more “crowded” licensing jurisdictions.
Benefits of a Labuan Cryptocurrency License
A labuan cryptocurrency license comes with perks like just 3% corporate tax, no capital gains tax, and no withholding tax on dividends or royalties. There’s also no foreign exchange control, which gives you total freedom to operate internationally. Plus, you can own your company 100% as a foreigner, and even get a 2-year multiple-entry work visa to live and work in Malaysia. All this makes it an attractive base for crypto entrepreneurs who want both cost savings and credibility.
Labuan as a Strategic Offshore Crypto Hub
Labuan sits right between Southeast and East Asia, so it’s super easy to reach big markets like Singapore, Hong Kong, and more. Plus, its legal system runs on common law, which most international businesses already know well. For those aiming to expand in Asia while enjoying offshore benefits, a crypto license in labuan offers the best of both worlds. This balance of offshore flexibility and onshore access is why so many exchanges are starting to pay attention to the island.
Labuan Crypto Regulation Overview
Regulatory Framework for Digital Assets in Labuan
Labuan introduced a clear set of rules for digital assets back in 2019, removing the usual “grey areas” that scare off investors. These rules apply to exchanges, wallets, custody services, and even ICOs, so everyone knows exactly what’s expected. Getting a Labuan crypto exchange license tells your clients and investors that you’re playing by strict legal standards – and that kind of transparency can go a long way in building trust in the crypto space.
Role of the Labuan Financial Services Authority (LFSA)
The LFSA is the authority that grants and oversees the Labuan cryptocurrency exchange license. They set the rules for how you operate, run thorough due-diligence checks, and ensure license holders stick to AML/CFT standards. They’re firm but approachable – a rare mix for a financial regulator. Their supervision keeps the market safe while still leaving room for innovation.
Types of Labuan Cryptocurrency Licenses
Labuan Cryptocurrency Exchange License Explained’
This license lets you operate a platform for crypto-to-crypto, crypto-to-fiat, and fiat-to-crypto trading. With a Labuan cryptocurrency exchange license, you can also list digital assets for token issuers and process payments through various channels – from bank transfers to e-wallets.. The requirements focus heavily on security, compliance, and having a physical presence in Labuan. It’s the go-to option for anyone wanting to operate a legitimate exchange in Asia.
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Other Labuan Crypto License Categories (Wallets, Custody, OTC)
Not every business needs a full exchange license. Labuan also offers licenses for wallet services, crypto custody providers, and OTC desks. These options are perfect if your focus is on secure storage, large private trades, or supporting other exchanges. Each comes with its own compliance requirements but offers more flexibility than a full exchange setup.
How to Obtain a Crypto License in Labuan
Application Process for Labuan Crypto Exchange License
The process starts with registering a local company, preparing a detailed business plan, and setting up your AML/CFT policies. You then submit your application to the LFSA along with all required documents. They may request interviews with your key team members before granting approval. On average, getting a labuan crypto license takes 3–4 months from start to finish
Requirements, Capital, and Documentation
To qualify, you’ll need at least USD 125,000 in paid-up capital (more for larger-scale exchanges), a local office, and at least two directors. The LFSA will also require proof of cybersecurity measures, KYC processes, and client fund segregation.
Timeline and Cost of Licensing
Most applications are processed within 90–120 days, depending on how complete your documentation is. Expect to pay an annual license fee of around USD 10,000 to the LFSA. You’ll also have costs for company registration, office rental, and compliance setup. Even with these expenses, the total is still far lower than in places like Singapore or Gibraltar.
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Post-Licensing Compliance and Operation
AML/CFT Requirements in Labuan
Once you’re licensed, you have to follow anti-money laundering and counter-financing of terrorism rules to the letter. That means appointing a compliance officer, running continuous KYC checks, and reporting any suspicious activity. These measures protect both your business and your customers — and ignoring them could mean hefty fines or even losing your Labuan crypto license.
Ongoing Reporting and Supervision by LFSA
The LFSA expects annual audits, regular financial reports, and immediate alerts if there’s ever a major security breach. You’ll also need to keep your office open and staffed, and get pre-approval for any changes to shareholders or directors. This kind of ongoing oversight helps make sure licensed companies stay reliable and credible with both clients and regulators.
Launch Your Crypto Exchange in Labuan
Get Professional Help with Labuan Crypto License Registration
Getting a Labuan crypto exchange license on your own can be challenging, especially with all the detailed compliance requirements. Partnering with experienced legal and corporate service providers can save you time, money, and headaches. They can walk you through every stage — from crafting your business plan to securing your first bank account. With the right guidance, launching in Labuan can be quick, cost-efficient, and fully compliant.
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"Their adept use of technology for communication and project management streamlined the entire process."
Thanks to Icon.Partners' efforts, the client was able to integrate with major platforms, such as Google, Facebook, and Stripe, and optimize their platform. The team was highly supportive and responsive from a workflow standpoint, and internal stakeholders were particularly impressed with the service provider's flexibility, professionalism, and technical prowess.
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CEO, VorfahrQR UG
Germany📍
Apr 10, 2024
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