The Benefits of a Labuan Crypto Exchange License

Labuan’s innovative licensing options, like the Digital Financial Services (DFS) permit, also provide great flexibility, making it easy for crypto businesses to smoothly move into wider FinTech opportunities. Keep on reading to find out how Labuan’s unique mix of usage-ready perks can set your crypto business up for lasting growth.

Labuan: Stable Crypto Offshore Free Zone in Asia

At a glance, this jurisdiction is already very impressive. Over the last couple of years, Labuan’s offshore economy only kept growing and is expected to boost Malaysia’s state-wide tax income by 5% in the coming years. The Labuan International Business and Financial Centre (Labuan IBFC) draws in more and more foreign companies with every passing year, providing over 6,000 jobs in financial services as well as contributing over 1,7 million EUR in taxes in the last 12 months alone.

Even if you overlook the staggering figures, there are more compelling advantages attracting crypto entrepreneurs:

• It’s Offshore. Typical offshore benefits make the crypto license in Labuan a very appealing option right away. You get to leverage low taxes, minimum restrictions, economic freedom, and business-friendly laws. These perks, paired with solid investment incentives, enable entrepreneurs to scale their ventures with ease and efficiency.
• It’s Stable. Unlike many European and Caribbean nations, where legislation might change unexpectedly, Labuan has a stable and dependable crypto framework. This unwavering approach gives companies the confidence and stability they need to prosper. Not having to worry about abrupt policy changes can make all the difference for your bottom line.
• It’s Asian. Labuan, located in the world’s most economically dynamic area, is well-positioned to become a major financial center. Asia’s development and innovation drive provides an ideal environment for growth-orientated crypto firms to thrive. Labuan capitalizes on this momentum, providing access to a large and diversified market while also benefiting from Asia’s technical advances and financial know-how.

High Business Efficiency

No other jurisdiction can offer processes this straightforward and, best of all, LegalBison can deliver unparalleled support every step of the way. We transform the complex into the simple, offering a seamless, all-inclusive service suite that lets you establish your business in record time. Say goodbye to mind-numbing paperwork and get ready to set up your company with just a few clicks – no red tape, no delays. Our plug-and-growth solutions empower you to focus on what truly matters: expansion!

Low Taxes, Simple Compliance Requirements

For businesses seeking to boost their bottom line through tax optimization, acquiring a Labuan crypto license can be a very wise decision. This jurisdiction provides a distinctive and very attractive tax framework for crypto enterprises.

For businesses fulfilling the Economic Substance Requirements (ESR), which include at least two full-time workers in Labuan and maintaining a designated minimum operational expenditure, the corporate income tax (CIT) is 3%. This impactful rate starkly contrasts with the default corporate tax rate of 24%. One more appealing feature of this jurisdiction is the exemption from dividend taxes and capital gains.

Compliance-wise, Labuan’s rules are very much reasonable, considerably lighter than those of several European countries. For example, local AML-CFT rules and FATF recommendations specify that crypto businesses must keep constant observation of suspicious activity in conjunction with yearly staff training in good practices. This is far less complicated than the strict, multifarious Markets in Crypto-Assets (MiCA) regulation. The EU’s landmark framework is known to sometimes deter new, potentially profitable businesses due to complex compliance requirements.

For an illustration of the potential financial effect, let’s consider a crypto company turning 1 million EUR annually. In Germany, which has a corporate tax rate of approximately 30%, the tax liability would be around 300,000 EUR. By comparison, after getting a Labuan crypto exchange license and qualifying for the 3% tax rate, the tax liability would only amount to 30,000 EUR.

This 270,000 EUR difference could make or break a company. It emphasizes the major tax benefits of running in Labuan instead of high-tax European countries.

Crypto License That Can Evolve into a FinTech License

It’s an oft-overlooked advantage, but Labuan’s Digital Financial Services (DFS) license can serve as a very versatile foundation for many types of cryptocurrency businesses. Specifically designed for financial institutions such as funds and investment banks, this permit allows companies to operate various crypto-related services. Businesses requesting the DFS license must register for one or more activities, including:

• custodial services,
• money broker services,
• exchange services.

One of the standout features of this Labuan VASP license is its adaptability. As the financial technology scene changes, companies can grow their operations by pairing the DFS license with other financial licenses. This allows businesses to smoothly shift from just offering crypto services to a wider range of FinTech options. The continued and easy adaptation to new business models and the needs of the market can significantly increase any company’s financial results.

Broadly speaking, the biggest benefits of this permit’s flexibility include:

1. Scalability – You can easily expand your service offerings without having to go through a whole licensing overhaul;
2. Cost-Efficiency – Cut down on licensing fees and admin costs by bringing together several services under one very flexible license;
3. Regulatory Compliance – Keep up with rarely-changing regulations by using a solid licensing framework;
4. Market Competitiveness – Stay ahead in the fast-moving FinTech sector by swiftly embracing new opportunities and technologies.

By choosing Labuan’s DFS license, cryptocurrency companies gain not only a robust starting point. There’s also the ability to grow and diversify their operations within a supportive, flexible regulatory environment.

How to get a Labuan crypto exchange license?

LegalBison has recently grown its operations in Labuan and in Malaysia, allowing its clients to benefit from premium services for the registration and maintenance of a Labuan crypto license.

We manage the complete process of getting a cryptocurrency exchange license in Labuan on your behalf. Your dedicated project manager will pinpoint for you the necessary document and information to provide, and manage the whole process for you.