Labuan client case studies

Labuan Money Broking Business Set Up

Background

  • Our client, Diwan Global is a privately owned and authorized DMCC trading company focusing on proprietary account on regulated exchange in Dubai, UAE;
  • Having found Healy Consultants Group PLC through Google, our Client approached our Firm with interest to apply FOREX license(s) in Labuan and Vanuatu;
  • Healy Consultants Group PLC reverted to our Client’s email inquiry with proposal and service fee to assist with such company set up and license application at above-mentioned jurisdictions;
  • After reviewing our proposal, our Client would like to have a meeting with consultants located in Healy Consultants’ Dubai office;
  • Following meeting at Dubai office, our Client has decided to engage Healy Consultants Group PLC for i) local company set up and ii) money broking license application in Labuan. Before proceeding the above, our Client would like to first confirm whether i) submission of education certificates is mandatory for such licensing application and (if so) ii) whether our Firm can advise strategies to secure a waiver from the authority;
  • Upon agreement, our Client settled 1st fee instalment to our Firm to commence the engagement;

Engagement planning

  • Because our Client has lost his highest education certificate that is one of the requirements for money broking license application, Healy Consultants Group PLC suggested our Client to first engage for research to confirm whether i) the same is mandatory and if yes, ii) what action can be taken to waive the same;
  • While confirming the same with Labuan FSA (Financial Services Authorities), our Client furnished Healy Consultants Group PLC with scan copies of all due diligence documents to formally commence the Labuan engagement;
  • Our Client also stated they are looking forward a fast solution that can allow them to have a local entity that conduct money broking business activity in Labuan;
  • Our Client also wish to only proceed with corporate bank account opening after securing the licensing approval;
  • Healy Consultants Group PLC prepared and emailed our Client a detailed project plan and draft business plan for the proposed entity;

Company registration

  • Our Client wish to incorporate the Labuan entity with i) 1 individual foreign Director and ii) 2 foreign shareholders;
  • Healy Consultants Group PLC assisted our Client to get ready with company incorporation forms and related documents as per the authority’s request;
  • According to the authority, company registration can only be completed after in-principle approval is granted to our Client’s money broking license application, given it is a licensed business activity;
  • Having known the same, our team secured money broking license application forms for our Client’s approval and signature;
  • At the same time, Healy Consultants Group PLC reserved our Client’s preferred company name from Labuan FSA within 3 days;
  • Our team resumed company registration application after secured in-principle approval for money broking licensing. Our Firm secured company registration number for our Client’s Labuan entity within 1 week;

Licensing application

  • Our team submitted a quality licensing application document package to the authority;
  • Within 2 weeks following submission of complete application package, Labuan FSA reverted with request for our Client to travel to Labuan for a 2-hour meeting with the authority;
  • Following the meeting, our team assisted our Client to submit supporting documents for further review by the authority;
  • Within 2 months, Healy Consultants Group PLC secured in-principle approval in writing from Labuan authority. Our Client is given 3 months to comply with additional requirements for issuance of licensing certificate;
  • Our Firm assisted and guided our Client to fulfill additional requirements within given timeline, including opening a local corporate bank account and settling annual licensing fee;
  • After supplying all required documents, our team secured approval and issuance of licensing certificate within 6 weeks;

Corporate bank account opening

  • To fulfill one of the mandatory requirements for licensing in-principle approval, our team recommended our Client to open a local corporate bank account;
  • Upon receipt of complete signed account opening forms, Healy Consultants Group PLC submitted the same to local banks;
  • Due to our Client’s business nature, Maybank Labuan reverted with request for a one-hour meeting;
  • Thereafter and within 3 weeks, Healy Consultants Group PLC secured bank account numbers for our Client’s Labuan entity;

Engagement completion

  • After secured final approval of money broking license from Labuan FSA, our Client settled outstanding licensing fees to our Firm;
  • Once the above was completed, our Firm couriered a complete company kit including business registration certificate couriered the same to our Client’s preferred address in UAE.

Property developer secures assets in Labuan holding company

Background

Our Client, who is based in Singapore, owns a portfolio of property assets in Thailand, the Philippines and Australia, including small resort developments, apartments and luxury villas. He wanted to place his assets into a secure offshore holding company, preferably in Asia as that is where the vast majority of his Clients are based.

Company incorporation

Case study for foreign investors in LabuanHaving explained the legal, tax and accounting implications of offshore incorporation in Asia to our Client, he decided to proceed with a Labuan Offshore Company as a sole shareholder of a Hong Kong limited liability company.

The first step in the process was for Healy Consultants to approach the Labuan Registrar of Companies (ROC) to check if the Client’s preferred company name was available. The ROC responded by e-mail within 2 working days to confirm that the name was available for incorporation and had been reserved.

Healy Consultants then obtained a company incorporation application form the Labuan Offshore Financial Services Authority (LOFSA), which included details of the names, nationalities and addresses of directors and shareholders, as well as our registered office address in Labuan (as required by law). We also sent due diligence required by the ROC, including passport copies of shareholders and directors, proof of address and bank reference letters, by e-mail to the ROC.

At the same time, our Singapore-based staff prepared pre-incorporation documents, including the memorandum and articles of the proposed company, a statutory declaration by an officer of the company and consent of the persons to be appointed director. Our Client visited our head office in Singapore to sign the documents. We then dispatched the documents, plus a cheque to cover the LOFSA incorporation fees (US$350) on the same day by courier to Labuan.

Healy Consultants also agreed to act as the Labuan resident company secretary for our Client’s company, to meet statutory requirements of the Malaysia Offshore Companies Act 1990.

Ten days after submitting the full incorporation application pack to the ROC, Healy Consultants received an e-mailed Certificate of Incorporation for the Labuan company, confirming that the company was fully incorporated with the correct corporate structure.

Four days later Healy Consultants’ Singapore office received a complete company kit from the LOFSA office in Labuan. The kit included an original Certificate of Incorporation, share certificates, a bound copy of the Memorandum and Articles, and a company seal.

In the meantime, our Hong Kong-based staff performed an online name search with the Hong Kong Companies Registry to check whether our Client’s preferred Hong Kong company name was available. We received confirmation 2 days later, and reserved the name. On the same day, our Hong Kong staff also e-mailed director and shareholder consent forms (the shareholder being the Labuan company), and articles of association, to our Client for his signature. He returned them to our Singapore office the following day, and our Singapore team then sent the documents by courier to Hong Kong, along with the Labuan corporate documents.

Our Hong Kong office then visited the Companies Registry in Causeway Bay to pay the business registration fee, as well as file the Memorandum and Articles of Association, a Statutory Declaration of Compliance and a Notice of Situation of Registered Office.

Five days later, our Hong Kong incorporation team received a Certificate of Incorporation from the Companies Registry by e-mail, which was forwarded on the same day to our Client in Singapore.

The following day, our Hong Kong incorporation team filed the Notification of Appointment of First Directors and Secretary, a Letter of Appointment of First Directors and signed consent to act as director to the Companies Registry in Hong Kong. We also obtained a Business Registration Certificate by paying statutory fees to the Companies Registry on behalf of our Client.

Corporate banking

Four weeks after the engagement started, Healy Consultants then approached Standard Chartered Bank in Central, Hong Kong. Our banking team in Hong Kong had prepared a corporate bank account application form on behalf of our Client’s company. Opening a corporate bank account is difficult and the bank required a detailed business plan describing the company’s activities and why it required a Hong Kong corporate bank account. Our Client found it difficult to obtain examples of contracts and invoices, as required by the bank, since the company had only just been incorporated. However, Healy Consultants banking team was able to come up with a workaround solution which satisfied the bank’s requirements.

Our Client was happy that we were able to open a bank account without him needing to travel to Hong Kong, since he was busy traveling in Australia viewing potential new developments for his business.

Labuan client case studies – Oil industry consultant minimises international tax exposure

Background

Our Client Marcus is an oil and gas industry consultant specialising in hazard identification (HAZID) techniques, investigation of risk reduction measures and the provision of risk assessment recommendations. He is a British citizen currently based in Singapore.

Engagement planning

Case study of registered Labuan company The nature of Marcus’ business is that he has Clients around the world, principally oil and gas production companies operating in the Asia Pacific, West Africa and the Middle East. Prior to contacting Healy Consultants, he had been invoicing Clients through his UK company, but he was keen to legally minimise his international tax exposure by migrating his business to a more tax-efficient jurisdiction.

Since the bulk of Marcus’ Clients are in Asia, he wanted a company which had an ‘Asian’ flavour, although he was not overly concerned that the company should project a ‘strong’ international image, in the way that a Singapore or Hong Kong company would. He also required a company that had minimal reporting obligations.

With these requirements in mind, Marcus approached Healy Consultants’ Singapore head office, who recommended either a Marshall Islands or Labuan Offshore Company. Following a telephone conversation between Marcus and one of Healy Consultants’ offshore company experts, it emerged that the Client was hoping to clinch new major contracts southeast Asia. Therefore it was decided that a Labuan corporate structure would be the most suitable to meet his objectives.

Aidan Healy, managing director of Healy Consultants, prepared a detailed cost proposal for a Labuan corporate structure and e-mailed this to Marcus, who responded the following day by signing our Client Engagement Letter and settling our fees.

The Client Engagement Letter outlined the intended corporate structure of the Labuan company (Marcus and sole director and shareholder, Healy Consultants as the legal Labuan resident company secretary), enabling our Labuan Incorporation Officer to begin the company registration process.

Company incorporation

The initial phase of this process was our Incorporation Officer in Labuan, Noraini, to approach the Labuan Registrar of Companies (ROC) to check if Marcus’ preferred company name was available. The ROC responded by e-mail within 2 working days to confirm that the name was available for incorporation and had been reserved.

She then approached the Labuan Offshore Financial Services Authority (LOFSA), completing a company registration application form and collecting due diligence of company directors and shareholders (only one shareholder and director is required for Labuan company formation, with both positions filled by Marcus).

At the same time, our Singapore-based staff prepared pre-incorporation documents, including the memorandum and articles of the proposed company, a statutory declaration by Marcus and director’s consent. All of these documents were signed by Marcus in our Singapore head office, and then dispatched to Noraini in Labuan.

Upon receipt of these documents, Noraini visited the LOFSA to submit them to the Registrar of Companies (ROC), along with a standard government fee of US$350 and a cheque for RM20,000 (US$5,800) which is a one-off fee to ensure that the company is legally tax-exempt.

Eight working days after submitting the full incorporation application pack to the ROC, Healy Consultants received an e-mailed Certificate of Incorporation for the Labuan company, confirming that it was a fully-legal corporate entity. Noraini forwarded the e-mail directly to Marcus for his records.

Four days later, Healy Consultants’ Singapore office received a complete company kit from LOFSA, including the original Certificate of Incorporation, share certificates, a bound copy of the Memorandum and Articles, and a company seal. This company kit is currently being held securely at Healy Consultants’ Singapore head office, as per Marcus’ wishes.

Corporate banking

To enable him to invoice Clients and make payments, Marcus also required our assistance to open a corporate bank account for the Labuan company. We had recommended a corporate bank account in either Singapore or Hong Kong since both countries have excellent banking facilities. However, since Marcus was spending the bulk of his time in Singapore he felt that he would be able to legally minimise his tax exposure by opening a Hong Kong corporate bank account.

As a result, we referred the case to our Banking Team in Hong Kong. Healy Consultants works closely with Standard Chartered Bank in Hong Kong, and is one of the few corporate service providers who can open a corporate bank account for our Clients without them needing to visit the bank in person.

That said, opening a corporate bank account for a Labuan company is challenging and requires substantial support documentation to justify the existence of the company. Our Singapore-based Marketing and Media Team therefore prepared a detailed business plan (in the bank’s preferred format) describing the company’s activities, information about the bank signatory, a brief market analysis and financial projections, and why it required a Hong Kong corporate bank account. Hong Kong banks also require evidence of the business, the form of contracts and invoices, which proved difficult for Marcus since the company had only just been incorporated. However, Healy Consultants banking team was able to come up with a workaround solution which satisfied the bank’s requirements, including submitting Client invoices from Marcus’ UK company, which essentially provides the same services as the Labuan entity.

With the documents submitted to the bank, we received account approval within one week. Two weeks later, our Hong Kong office received ATM cards and PIN numbers for Internet banking in separate, secure envelopes, and these were sent to our Singapore office by secure courier for Marcus’ collection at his convenience.

Today, the Labuan company is proving an excellent vehicle for our Client’s consulting business, and so happy was he with our smooth and convenient incorporation procedures that he has since recommended Healy Consultants to one of his business associates.

Investment holding company in Labuan

Background

  • In February 2018, our Vietnam corporate Client contacted Healy Consultants Group PLC to project-manage their company’s investment holding company setup in Labuan, Malaysia with a corporate bank account to be opened in Singapore;
  • The Client has an existing boutique investment bank in Vietnam that has grown since 2011 and is now listed on the Vietnam Stock Exchange;
  • The Client’s core business includes agriculture and manufacturing, trading infrastructure and real estate, renewable energy and fintech solutions;
  • Our Clients’ business strategy is to grow through i) Mergers & Acquisitions and ii) International Partnership Strategy.

Engagement planning

  • Our Client engaged Healy Consultants Group PLC to register an offshore company in Labuan Federal Territory of Malaysia. This entity will be an investment holding company;
  • The founders are experienced business persons in Vietnam who have the capacity to arrange financing for the renewable energy projects in this country, as well as providing EPC consultancy and project management services for solar development business;
  • This holding company will i) invest in the services industry (financing arrangement and deal origination fees) where the existing Vietnam entity is operating in and will ii) mostly source funds from investment activities in consultancy services;
  • We discussed with the Client over emails and phone calls their business goals and the optimum way to achieve the same. Before starting the project we provided our Client with a detailed proposal outlining i) costs breakdown for each service, ii) detailed timeframe, and iii) Labuan accounting and tax liabilities;
  • The Labuan company would have the main owners in its corporate structure, with three international directors and eight international shareholders. To minimize engagement issues and further administrative burdens, the Client appointed Healy Consultants Group PLC Labuan’s office as the company secretary and legal registered office.

Legally exempted LLC incorporation

  • Healy Consultants Group PLC’s Incorporation team together with the Compliance Team reviewed all due diligence documents from all individuals involved in the company structure and also from the Vietnam company;
  • Healy Consultants Group PLC performed a name search with the Labuan IBFC and confirmed availability of the preferred company name of the Client. We then drafted the detailed MAA for the new Labuan company;
  • We prepared a complete high-quality package of incorporation documents to be signed and legalized by each of our Clients in the corporate structure. Once we received the signed and legalized documents, we submitted the same to the Labuan IBF;
  • Healy Consultants Group PLC also agreed to act as the Labuan resident company secretary for our Client’s company, to meet statutory requirements as per Malaysia Offshore Companies Act 1990;
  • Company incorporation was completed within 1 month from the start of this engagement with no issues from the registration authorities.

Corporate bank account

  • Healy Consultants Group PLC contacted several quality banks in Singapore to enquire about them onboarding our Client and we prepared a comparison table between the willing banks;
  • After Client confirmed their preferred bank and due to our existing relationship with Singapore banks, Healy Consultants Group PLC successfully assisted our Client to open a corporate bank account with RHB Bank Singapore;
  • The complete bank account opening step took two months until Healy Consultants Group PLC received approval and the bank account details from RHB Bank Singapore for our Client. Immediately after, we couriered the bank mails and internet tokens (in sealed envelopes) to our Client’s address at no additional charges.

Accounting and taxation

  • Immediately after the company was incorporated, Healy Consultants Group PLC entered this company into our Labuan accounting and taxation database to ensure the company’s legal obligations would be timely discharged in the future;
  • Again, we gently reminded our Clients of their annual legal obligations as the directors of a Labuan company;
  • Next year onwards, Healy Consultants Group PLC will prepare a audited annual reports for submission upon receipt of the management accounts, invoices and bank statements from their company.

Conclusion

  • Our Client is currently happy with an offshore company in Labuan Federal Territory of Malaysia that act as an investment holding company, which is in line with the Client’s growth business strategy.

Contact us

For additional information on our company registration services in Labuan, please contact our in-house country expert, Mr. Kunal Fabiani, directly:
client relationship officer - Kunal