Can Malaysian residents obtain loans from Labuan banks?

120810_update-development-oYes, they can subject to the guidelines issued by Bank Negara Malaysia (BNM), as follows:

  • For an aggregate loan amount not exceeding MYR1 million, no approval by, or notification of, BNM is necessary
  • For an aggregate amount exceeding MYR1 million but not exceeding MYR5 million, the applicant is required to inform BNM within 2 weeks from Letter of Offer
  • For an aggregate loan amount exceeding MYR5 million (equivalent in foreign currency), approval from BNM is required (ECM10)

Do buyers and sellers have to be outside Malaysia for Labuan trade financing transactions?

With respect to trade financing, the buyers and sellers can be outside of Malaysia and the underlying goods to be exported to or imported from other countries may also include Malaysia

Can a Labuan bank provide a guarantee on foreign direct borrowing of a resident?

Yes, a Labuan bank may provide a guarantee on foreign direct borrowing of a resident. Residents are freely allowed to obtain foreign currency credit facilities from the Labuan banks in the aggregate up to MYR5 million, beyond which the approval of Bank Negara Malaysia is required.