Labuan Bank Account

This refers to geographical location and the most natural location for Labuan is Labuan itself and Kuala Lumpur. But admittedly some banks in Kuala Lumpur have placed restrictions on Labuan company opening bank accounts with them. Major financial centres like Singapore and Hong Kong may be chosen to, but if choosing a major financial centre, client is expected to demonstrate “solid proof of existing business”.

Typically this can mean either a local bank or an international bank, Islamic banks or conventional banks, commercial or private banks. With our vast experience, we can reasonably recommend you which type of banks to be chosen. As a general rule required by a local bank is less onerous. Further international banks require higher initial deposit and expect large turn over.

At least two major advantages of commercial banks are lower banking charges and high street presence. But it seriously lack personalise services customarily found in a private bank. A client choosing a private bank must be aware of higher initial deposit and banking charges.

Local banks tend to be smaller and impose lower bank charges and initial deposit. However, local banks tend to have basic internet banking only as opposed to very efficient one from international banks. Client however should be aware that international banks not only impose high banking charges and high initial deposit, but expect your turn over to be large too. If your transactions and annual turnover is likely to be small, it is not advisable to pursue international banks.

From our experience, the answer is YES. Just because a bank is small and operating in a lesser known centre, it does not mean it is not well regulated or not properly run. We have experience in opening bank accounts for Labuan companies in situation like this. Of course as a rule of thumb, our clients prefer bigger banks in bigger centres.

It should be remembered that whichever bank you choose, full disclosure of beneficial ownership is mandatory. The use of anonymous account is the thing of the past. Whilst in general customer’s confidentiality will always be protected, such protection is only afforded to customers with genuine business. In most cases, where there is a court order requiring disclosure or where there is suspicion that a transaction involves proceed of criminal activity, a bank may be compelled to make disclosure. Recent OECD’s initiative on compelling exchange of information between member states and between offshore centres and member states will make “confidentiality” advantage questionable. In the near future, many offshore centres will demand for financial information to be made available by offshore service providers. It is however not clear how and to what extent the available financial information will be made use by regulators in each centre.

All financial centres have now legislated laws on anti-money laundering and anti-terrorists financing measure with the effect that banks operating in those centres are required to apply more stringent customer due diligent procedures. In most cases documents required are more numerous and time taken to approve an application is longer than before.

No two banks have identical requirement to meet their due diligent prior to opening accounts. Nevertheless common theme appears. It must be remembered that bank reference, detailed explanation of business and source of fund are commonly required.

1. Duly completed and signed Bank account opening form.
2. Duly signed and verified bank Specimen cards.
3. Passport copies of director, signatory and beneficial owner verified by banker
4. Proof of residential address; normally in the form of bank or credit card statement and utility bills.
5. Bank reference; usually reference from an international bank is preferred although not a must for some banks. The bank reference should state at least number of years of banking relation, type of account and whether the conduct of account is satisfactory.
6. CV or resume; what the bank wants to see here is what the customer has been and is doing now.
7. Detailed nature of business, i.e. The bank needs to understand the client’s business. Most banks will require business cash flow projection.
8. Company / business profile; Most of these companies are new so there is no profile. Profile of a related company or company which is owned by the beneficial owner will do.
9. Source of fund; i.e. What is the economic origin of the money that will pass through the account. For example consultancy fees, trading commission, etc.
10. List of counter parties; i.e. If your client claimed to be in pharmaceutical business he should be able to list out a few of his suppliers and customers. It is not likely that people in who claim to be in this business do not know his counter parties.
11. Reason/s why account is needed; whatever is the reason so long as legitimate.
12. Face to face meeting; Not strictly necessary but from our opinion this is very important. This is just a one-time trip that is worth taking. Meet the bank and its officers and this would help so much in future dealing with the bank.

Opening and maintaining offshore bank account may be a costly affair. Our clients are advised that at least one-time introduction fee must be paid and bank charges for transactions carried out may be more expensive with some offshore banks.

 

We have assisted hundreds of clients in opening offshore bank accounts in various centres and are ably equipped to advise on the confidentiality, due diligent, documentation requirement and cost aspects of opening and maintaining offshore bank accounts. The fact that we are qualified intermediaries with a few banks also ensure that our clients’ application enjoy high rate of success.

Click the link below to see the banking option for Labuan Company.

Labuan Company Banking Option Download