Labuan Islamic Banking Window

The setting up of an Islamic banking window by a Labuan Bank under the Labuan Financial Services and Securities Act 2010  does not require a separate license and there is also no additional licence fee involved. The Labuan banks may submit the application for approval by submitting the following documents:

1. Certified true copy of Board Resolution pertaining to the proposed establishment of Islamic window;
2. Business plan inclusive of three years' financial projections;
3. Information on its own internal Shariah Advisory Board (SAB).

Additional Incentives

Under the Malaysian International Islamic Financial Centre's (MIFC) initiative, the Islamic divisions of the Labuan banks are given greater flexibility as follows:

1. Exemption from maintaining physical presence in Labuan. The Islamic divisions of Labuan banks may open operation offices anywhere in Malaysia, subject to consideration by Labuan FSA and approval by Minister of Finance.
2. No limitation on the staffing and number of operations offices to be opened outside Labuan.
3. The operation offices are to conduct non-ringgit Islamic financial business and deal mainly with non-residents as per Labuan legislation.
4. Dealing with residents in non-ringgit transactions are allowed as permitted under the current foreign exchange administration policies.

Governing Legislation

The Labuan Islamic banking windows are governed by the following Labuan laws:-

Labuan Islamic Financial Services and Securities Act 2010
Labuan Companies Act 1990
Labuan Business Activity Tax Act 1990

For a complete list of all Labuan laws, please click here.