Labuan Financial Services / International Commodities

International Commodities

The Global Incentives for Trading (GIFT) program was launched in collaboration with the Malaysia Petroleum Resources Corporation, aims at positioning Malaysia as a regional trading and storage hub for oil and gas. Under the programme, a set of incentives were offered through the establishment of the Labuan International Commodity Trading Company (LITC) including incentives for traders and trading houses to use Malaysia as their international trading base. The LITC was structured by taking cognizance from the views and demands of the market.

The Labuan international commodity trading business is the trading of Petroleum and petroleum-related products. Minerals and any other commodities as may be approved by Labuan FSA in any currency other than the Ringgit, under the GIFT programme. Trading under the GIFT programme is defined as the buying, selling and/ or brokering of the specified commodities.

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Key Advantages

Other Key Considerations

Access to Credit

It is worth noting that as an international business and financial centre, Labuan IBFC is home to a thriving banking industry, comprising close to 60 banks. These banks are readily available to provide competitive financing packages.

World Class Storage Facilities

As part of GIFT, traders will have access to world-class storage facilities such as Tanjung Pengerang in Johar. This deep water port (up to 26 meters) offers large super tankers easy access to the storage facilities while being close to international shipping routes and Singapore’s international petroleum hub.

Risk Mitigation

As a comprehensive business and financial centre, Labuan IBFC offers traders an extensive range of insurance and risk management solutions. Labuan IBFC is one of the fastest growing risk centres in Asia with a wide range of risk mitigating structures, including captives and protected cell companies.

Lower Operational Cost

The cost of operations in Malaysia is substantially lower than in other commodities trading hubs across the world, such as London and Geneva. Neighbouring Singapore is the only other commodities trading hub in Asia Pacific, but the cost of doing business as well as living on the island state has become less competitive over the years.

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One share in any denomination in foreign currency except Malaysia Ringgit

Approximately 7-14 business days upon complete collection of the required documents

The director and the shareholder must be at least one person and can be the same person. It
can be fully owned by a foreigner.

A resident secretary is required.

• Trading company – please see attachment “LFSA – Code 20” for allowed activities under trading company.
• Non-trading company/investment holding – income mainly from dividend or interest.
*Kindly take note that the tax for general trading or import/export services is ranging from 15% – 24% under Malaysia Income Tax Act 1967.

• Trading company companies are taxed under Malaysia Income Tax Act 1967, which the tax ranging from 15%-24% of its profit except for Labuan licensed company. (Audit required)
• Tax for Labuan licensed company and business nature under “Code 20” is 3% of its audited net profit with fulfilled its substance requirements. (Audit required)
• Investment holding companies are not subjected to tax (0% tax) with the submission of yearly management account and fulfilled substance requirement.


• CTC of Passport
• CTC of Proof of address (such as the most recent utility bill, internet bill, insurance statement, etc)
*CTC – Certified True Copies: Certification of documents must be made by competent persons such as a notary public, solicitor, chartered secretary, or certified public accountant,
and made in accordance with the law in Malaysia or in the country where the certification was made.

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