Labuan IBFC Welcomes the Asian Fintech Industry
KOTA KINABALU: Labuan International Business and Financial Centre (Labuan IBFC) aims to be the domicile of choice for financial technology (Fintech) businesses in Asia via its ready suite of structures and solutions.
Riding on the wave of Fin tech offerings, which Labuan I BF Ch as coined as ‘Innovative Financial Services’ (IFS), the midshore jurisdiction is looking forward to welcoming even more IFS businesses from Asia with its substance-enabling yet cost-efficient structures and solutions.
CEO of Labuan IBFC Inc, Farah Jaafar-Crossby said: “The jurisdiction has always been agile in responding to the market and industry needs. Fintech or as we call it IFS, is clearly a thriving industry and its adoption rate has been increasingly high among our players so far. Hence, we think it is time for us to officially embrace this movement.”
Farah added: “We hope to see a positive take-up rate on the applications to set up IFS-related businesses in Labuan IBFC as we have been receiving many enquiries. In fact, what is unique is that we have adopted a unique approach to IFC as there isn’t a special licence needed to operate an IFS-related business in Labuan IBFC.”
Unlike other jurisdictions, Labuan IBFC has opted for more open approach where interested business owners with IFS-related businesses need to merely apply to operate as a Labuan-licensed entity under the Labuan Financial Services & Securities Act (LFSSA) 2010 or the Labuan Islamic Financial Services & Securities Act (LIFSSA) 2010. For existing Labuan-licensed entities that wish to incorporate any IFS activities into their current business operations, they are simply required to apply to Labuan FSA noting their change of business plan.
“This approach is only possible as Labuan FSA is a one stop regulator and is able to process each application on its merit individually. In addition, the midshore jurisdiction already offers one of the widest range of structures and solutions available in Asia, from licences in money broking, credit token, private fund management and protected cell companies. All these licensed activities are able to be conducted for IFS-related businesses based on a strong business case,” Farah explained.
To further drive the development of the IFS sector in Labuan IBFC, the Authority (Labuan FSA) has also released a Frequently Asked Questions (FAQs) to provide guidance for interested parties who would like to set up an IFS-related Labuan entity. The list of FAQs covers key areas of IF Sin the jurisdiction, the regulatory aspects and guide for applications. The list of FAQs can be obtained here: https://bit.ly/2OXdE9n
To date, Labuan FSA has approved four IFS-related Labuan entities and continues to receive new applications related to this industry. In fact, Asia’s first robo-advisory service for Shariah-compliant investments is offered via a Labuan-licensed entity. This entity has been operating since July 2017. This combination is indeed unique as it brings together Labuan IBFC leadership position in Islamic finance and its growing influence in IFS.