How to Set Up a FinTech Company in South East Asia:

A Complete Guide to Labuan and Malaysia with Zitadelle AG

Published by Zitadelle AG  |  zitadelleag.com  |  Labuan, Malaysia

 South East Asia has emerged as one of the world's most dynamic FinTech hubs, attracting founders, investors, and financial institutions from every corner of the globe. With a fast-growing digital economy, a young and tech-savvy population, and governments actively courting international financial businesses, the region represents a compelling destination for any company looking to build, license, or scale a FinTech operation.

Among all the jurisdictions available in South East Asia, two stand out for foreign investors seeking regulatory clarity, tax efficiency, and genuine business infrastructure: Labuan (Federal Territory of Malaysia) and Peninsular Malaysia. Together, they offer a rare combination — a credible, internationally respected regulatory framework, proximity to the major Asian financial centers of Singapore and Hong Kong, and a business environment that genuinely welcomes foreign capital and foreign-owned enterprises.

Zitadelle AG is a specialist FinTech advisory firm with a physical office and local employees based in Labuan, Malaysia. We assist international founders and companies at every stage of their journey — from initial corporate structuring and licensing, through to operational support including payroll, HR, visas, and migration. This article covers everything you need to know about setting up a FinTech company in Labuan or Malaysia as a foreign investor. 

Why South East Asia for Your FinTech Business?

The FinTech landscape across South East Asia has matured significantly over the past decade. Regulators in countries like Malaysia, Singapore, and Indonesia have invested heavily in building frameworks that attract legitimate, well-capitalized financial businesses while filtering out bad actors. For foreign entrepreneurs, this maturation is good news: it means clearer rules, more established legal precedent, and a growing ecosystem of banks, service providers, and talent.

Key macro drivers making South East Asia attractive for FinTech set-up include:

•      A combined population of over 680 million people, the majority of whom are underbanked or underserved by traditional financial institutions — creating enormous commercial opportunity for payment, lending, and digital banking solutions.

•      Rapidly increasing smartphone and internet penetration, especially among the 15–35 age bracket, driving demand for digital financial services.

•      Government-backed digital economy initiatives across Malaysia, Singapore, Thailand, and Indonesia that actively encourage FinTech licensing and foreign investment.

•      Strategic geographic positioning bridging East Asia, South Asia, and Oceania — making the region ideal as a base for companies with cross-border ambitions.

•      A growing pool of English-speaking, finance-trained local talent, reducing the cost and complexity of building operational teams compared to European or North American markets.

•      Highly competitive corporate tax rates and, in the case of Labuan, one of the most investor-friendly offshore financial centre regimes in the world.

Against this backdrop, Labuan and Malaysia offer a particularly compelling proposition — combining the credibility of a well-regulated, FATF-compliant jurisdiction with the practical advantages of low cost, strong local infrastructure, and a genuinely welcoming posture toward international FinTech businesses. 

Labuan IBFC: South East Asia's Premier Offshore Financial Centre

Labuan is a small island Federal Territory off the coast of Sabah in East Malaysia. Since 1990, it has operated as the Labuan International Business and Financial Centre (Labuan IBFC), regulated by the Labuan Financial Services Authority (Labuan FSA). Over the past three decades, Labuan has built a reputation as one of Asia's most respected and commercially practical offshore financial centres — sitting alongside well-known alternatives like the British Virgin Islands, Cayman Islands, and Mauritius, but with the distinct advantage of being physically located in Asia.

The Labuan IBFC was specifically designed to serve international financial business. Entities incorporated in Labuan are subject to a separate regulatory and tax regime from Peninsular Malaysia, and they are intended to conduct business internationally rather than primarily within Malaysia. This architecture delivers several concrete advantages for foreign investors:

Tax Efficiency

Labuan companies engaged in qualifying trading activities — including financial services, FinTech operations, and investment holding — are taxed at a flat rate of 3% on net audited profits. This applies to a wide range of regulated financial activities. Companies that elect to pay the flat 3% rate are not subject to Malaysia's standard corporate tax rate of 24%, making Labuan one of the most tax-competitive international financial centres globally.

Capital gains, dividends received, and many categories of investment income are generally not subject to tax in Labuan, and there is no withholding tax on payments made to non-residents. Combined with Malaysia's extensive double tax treaty network, Labuan structures can be highly efficient vehicles for international financial operations.

Regulatory Credibility

The Labuan FSA is a professional, internationally engaged regulator. Labuan is not a secrecy jurisdiction — it operates with full AML/CFT compliance, participates in international information exchange frameworks, and is recognized by jurisdictions including the EU, UK, and the Gulf States as a credible regulatory environment. For FinTech companies seeking to open correspondent banking relationships, attract institutional clients, or partner with regulated counterparties, Labuan's regulatory credibility is a significant practical advantage over less-established offshore alternatives.

Broad Licensing Framework

The Labuan FSA regulates a comprehensive suite of financial activities, enabling businesses across the FinTech spectrum to operate from a single jurisdiction. The licenses available from the Labuan FSA include, among others:

•      Money Broking License — covering foreign exchange, derivatives, and related financial instruments (commonly used for Forex and CFD broker operations)

•      Investment Banking License — for companies engaged in investment banking, capital markets advisory, and structured finance

•      Securities License — for securities broking, dealing, and related capital markets activities

•      Fund Management License — for asset managers and fund managers operating internationally

•      Payment System Operator License — for companies operating payment systems, electronic money, and cross-border remittance services

•      Digital Financial Services License (VASP) — for virtual asset service providers, cryptocurrency exchanges, and digital asset businesses

•      Digital Banking License — for companies seeking to operate as full-scope digital banks

•      Insurance License — for captive insurance, general insurance, life insurance, and reinsurance vehicles

•      Islamic Finance License — for Shariah-compliant financial services, leveraging Malaysia's position as a global Islamic finance hub

•      Leasing and Factoring Business License — for companies engaged in equipment leasing, trade finance, and factoring activities

•      International Commodity Trading License — for businesses involved in commodity trading operations

The diversity of licenses available from a single jurisdiction makes Labuan particularly attractive for FinTech groups seeking to house multiple regulated activities under one corporate structure or within a closely coordinated holding group. 

Peninsular Malaysia: Onshore Licensing and Market Access

Alongside Labuan's offshore framework, Peninsular Malaysia — regulated primarily by Bank Negara Malaysia (the central bank) and the Securities Commission Malaysia (SC) — offers a complementary suite of onshore licenses that may be relevant for FinTech companies seeking direct access to the Malaysian domestic market or wishing to establish a regulated presence in the broader ASEAN financial services landscape.

Onshore Malaysian licenses include payment system and e-money licenses under the Financial Services Act 2013, the Securities Commission's Capital Markets Services License (CMSL), and the newly introduced Merchant Acquiring License regulated under Bank Negara Malaysia's framework. Malaysia also has a structured regulatory sandbox and a recognized Digital Asset Exchange framework, making it an active participant in the global regulatory conversation around virtual assets and digital finance.

For many international FinTech groups, the optimal structure involves a Labuan entity handling the international and offshore components of the business — benefiting from Labuan's 3% tax rate and flexible regulatory framework — while a Malaysian entity serves as the operational hub for onshore Malaysian activities, local hiring, office space, and payroll. Zitadelle AG has extensive experience designing and implementing these dual-entity structures. 

Setting Up as a Foreign Investor: What You Need to Know

Company Formation in Labuan

Foreign investors can own 100% of a Labuan company. There are no foreign ownership restrictions applicable to Labuan entities, and the incorporation process — managed by a licensed Labuan trust company — is typically straightforward and efficient. Labuan companies are formed under the Labuan Companies Act 1990, with the most common structure being the Labuan private limited company (LLC).

Once incorporated, the Labuan entity can apply for the relevant license from the Labuan FSA. License processing times and capital requirements vary by license type. Zitadelle AG, as an experienced Labuan-based advisory firm with established relationships with the Labuan FSA, can provide realistic guidance on timelines and requirements for each specific license category.

Company Formation in Malaysia

Peninsular Malaysian companies are incorporated under the Companies Act 2016, regulated by the Companies Commission of Malaysia (SSM). Malaysia permits 100% foreign ownership in most sectors, though some activities — including certain licensed financial services — may have specific ownership or director requirements. Foreign investors wishing to establish a presence in Malaysia should also consider the Malaysia My Second Home (MM2H) programme and the relevant employment pass requirements for relocated foreign staff.

Malaysia's legal and regulatory environment is well-developed and based on English common law, making it accessible to international investors from the UK, Europe, the United States, and other common law jurisdictions. The use of English in courts and regulatory proceedings further reduces the practical barriers for foreign founders and executives. 

Licenses Available: A FinTech Operator's Overview

Zitadelle AG assists with the full range of Labuan FSA and Malaysian regulatory licenses, from initial application through to ongoing compliance support. Below is an overview of the key licenses relevant to FinTech businesses.

Securities and Investment Licenses

The Labuan Securities License permits the holder to engage in a wide range of capital markets activities, including securities broking, dealing in securities, and advisory services in connection with securities transactions. This license is commonly sought by companies wishing to operate as online brokers, provide CFD trading services, or engage in structured investment products targeting international clients.

The Investment Banking License under the Labuan FSA is one of the more prestigious licenses available in the jurisdiction, permitting the holder to engage in investment banking activities including underwriting, placement of securities, merger and acquisition advisory, and structured finance transactions. Companies with significant capital markets ambitions — particularly those looking to serve institutional clients across Asia — frequently consider this license as a cornerstone of their Labuan regulatory strategy.

Payment and Remittance Licenses

The Labuan Payment System Operator License is available to companies wishing to operate payment systems, electronic money platforms, and cross-border money transfer services from Labuan. This license is particularly relevant for FinTech companies in the cross-border payment, remittance, and e-wallet space, and provides a regulated foundation for companies serving business or consumer customers across multiple jurisdictions.

On the onshore side, Bank Negara Malaysia regulates payment services under the Financial Services Act 2013, with specific frameworks for e-money issuers, payment system operators, and most recently, merchant acquirers. Companies seeking to serve the Malaysian domestic market or to position themselves as regulated payment counterparties for Malaysian banks should consider pursuing the appropriate onshore Malaysian payment license alongside their Labuan structure.

Virtual Asset Service Provider (VASP) Licenses

The rapid growth of the cryptocurrency and digital asset sector has driven significant demand for regulated VASP frameworks in Asia. Labuan has responded to this demand by establishing the Digital Financial Services (DFS) license, which permits Labuan-regulated entities to offer virtual currency exchange, digital asset custody, and related services on a regulated basis.

The Labuan DFS license is recognized as a credible regulatory foundation for crypto and digital asset businesses, offering a pathway to regulatory compliance that is more accessible and commercially practical than some competing frameworks — while remaining rigorous enough to satisfy due diligence requirements from banking partners and institutional counterparties.

Insurance Licenses

Labuan has long been a significant centre for insurance and reinsurance activity in Asia. The Labuan FSA regulates a comprehensive framework for insurance vehicles, including captive insurance companies, general and life insurance entities, reinsurance companies, and insurance managers and brokers. For FinTech companies with embedded insurance products or InsurTech ambitions, establishing a regulated insurance vehicle in Labuan can be an efficient and cost-effective solution compared to seeking insurance authorization in major markets directly.

Fund Management and Investment Structures

Labuan is an established venue for investment funds and fund management entities. The Labuan FSA regulates fund management companies and a range of fund structures, including conventional and Shariah-compliant funds. Foreign investors seeking to establish a vehicle to manage assets, pool capital from international investors, or structure an investment portfolio in South East Asia frequently look to Labuan as a cost-effective and tax-efficient base for these activities. 

Zitadelle AG: Your On-the-Ground Partner in Labuan and in Malaysia

What sets Zitadelle AG apart from advisory firms operating from Europe or other distant jurisdictions is simple: we are actually here. Our office is located in the Paragon Building in Labuan, and our team includes qualified local professionals with direct relationships with the Labuan FSA, local banks, and the Malaysian regulatory ecosystem.

Being physically present in Labuan is not merely a commercial convenience — it is a meaningful operational advantage for our clients. Regulatory applications, banking introductions, and compliance matters in Labuan benefit from personal relationships and a genuine local presence in ways that remote advisory cannot replicate. When the Labuan FSA has questions about a license application, our team is available to respond promptly and in person. When a banking partner requires a site visit, we can facilitate that engagement directly.

Our Team and Local Expertise

Zitadelle AG's Labuan team includes accounting and finance specialists, corporate and regulatory officers, and business development professionals with deep experience in the Labuan IBFC environment. Our team members are fluent in the regulatory requirements, local customs, and practical realities of operating in Labuan — knowledge that cannot be substituted by research conducted from another continent.

Our broader international team brings expertise across the full spectrum of financial services regulation, with track records of successful engagements for securities brokers, payment companies, crypto businesses, investment banks, and insurance vehicles. We have assisted clients including major international brokers, global FinTech companies, and leading institutional financial groups — as reflected in the testimonials from clients such as Key to Markets, FXDD, Tickmill, and Tradeview. 

The Full Suite of Services: From Incorporation to Operations

Zitadelle AG offers a genuinely comprehensive service that goes beyond licensing and company formation. We understand that for a foreign investor establishing a new operation in Labuan or Malaysia, the practical operational challenges — finding the right people, managing payroll compliantly, obtaining the right visas, and navigating local employment regulations — can be just as challenging as the regulatory licensing process itself. Our service covers all of these areas.

Corporate Structuring for Foreign Investors

We advise on the optimal corporate structure for foreign investors entering Malaysia and Labuan, taking into account the nature of the intended business, the tax position of the group, the licensing requirements of the relevant regulated activities, and the specific objectives of the founders or investors. This typically involves a combination of a Labuan holding or licensed operating entity, a Peninsular Malaysian operational company, and potentially one or more offshore vehicles in jurisdictions such as the British Virgin Islands, Cayman Islands, or Cyprus — depending on the group's global footprint and investor base.

Visa and Immigration Support

Foreign executives and key employees wishing to relocate to Malaysia or Labuan require appropriate visa and work authorization. Zitadelle AG assists with the full range of Malaysian immigration matters relevant to FinTech businesses, including Employment Passes for senior foreign employees, Professional Visit Passes, and the processes relevant to key management personnel at Labuan-licensed entities. We also assist with Labuan-specific immigration applications relevant to financial services executives.

For founders and investors considering longer-term relocation to Malaysia, we can provide guidance on available residency pathways and the practical steps involved in establishing a long-term presence in the country.

Payroll and HR Services

Operating a compliant payroll in Malaysia requires an understanding of the local regulatory framework covering employee contributions to the Employees Provident Fund (EPF), the Social Security Organisation (SOCSO), the Employment Insurance System (EIS), and the relevant income tax withholding obligations. Zitadelle AG assists international businesses with payroll setup, ongoing payroll management, and HR compliance in Malaysia — including for companies employing both local Malaysian staff and internationally relocated foreign employees.

Our affiliated HR and talent search platform, HRFinEase, specializes in FinTech recruitment across the investment, payment, virtual asset, and banking industries — enabling clients to identify and retain the right local talent to build effective teams in Labuan and Malaysia.

Accounting, Audit, and Ongoing Compliance

Labuan-licensed entities are subject to annual audit and reporting obligations under the Labuan Companies Act and the relevant licensing frameworks. Zitadelle AG provides full accounting, bookkeeping, and audit coordination services for Labuan entities, ensuring that clients remain fully compliant with their regulatory obligations on an ongoing basis. Our team handles the preparation of financial statements, coordination with approved auditors, regulatory reporting, and annual filing requirements.

Banking and Payment Infrastructure

One of the practical challenges frequently encountered by foreign investors establishing new entities in Labuan and Malaysia is access to banking. Opening corporate accounts for newly-formed entities — particularly those engaged in financial services — requires careful preparation and an understanding of what banks require. Zitadelle AG assists clients with banking introductions and the preparation of the documentation and business presentations typically required by financial institutions considering new FinTech clients.

Legal Support and Regulatory Advisory

Our legal team can assist with the provision of legal opinions, resolution of client disputes, and communication with government and regulatory authorities in connection with compliance inquiries and licensing matters. We also assist with investor alert removals and other reputational management matters that occasionally arise for financial services companies operating in international markets. 

Why Not Singapore? The Case for Labuan and Malaysia

Singapore is the most prominent FinTech hub in South East Asia, and for good reason — it has a highly sophisticated regulatory environment, world-class financial infrastructure, and an international talent pool. However, for many FinTech businesses — particularly those not yet at scale, or those focused on international rather than domestic operations — Singapore presents some practical challenges:

•      High corporate costs, including office rents, staff salaries, and regulatory fees that are among the most expensive in Asia.

•      The Monetary Authority of Singapore (MAS) applies rigorous requirements to license applicants, which are appropriate for the market but can represent a high barrier to entry for earlier-stage businesses.

•      Singapore's domestic market, while wealthy, is small — approximately 5 million people — limiting the commercial opportunity for consumer-focused FinTech businesses within Singapore itself.

Labuan and Malaysia offer a different value proposition: a credible, internationally respected regulatory environment at a fraction of the cost of Singapore, with access to a domestic Malaysian market of 33 million people and proximity to the broader ASEAN region. For many FinTech businesses, Labuan provides the regulatory foundation needed to operate internationally while Malaysia provides the operational and commercial platform to build a real, scalable business.

Many of our clients operate structures that involve both a Labuan licensed entity and a Singapore holding or operational company — taking advantage of the specific strengths of each jurisdiction. Zitadelle AG has experience structuring these cross-border arrangements and coordinating with legal and advisory counterparts in Singapore when required. 

Frequently Asked Questions

Can a foreign investor own 100% of a Labuan company?

Yes. Labuan entities can be 100% foreign-owned with no restrictions. This is one of the key advantages of the Labuan jurisdiction for international investors.

How long does it take to obtain a Labuan FSA license?

Processing timelines vary by license type. A Money Broking License typically takes between three and six months from submission of a complete application. Investment Banking and Securities Licenses may take somewhat longer. Zitadelle AG can provide specific timeline guidance based on current Labuan FSA processing times and the specific circumstances of your application.

What is the minimum capital requirement for a Labuan financial services license?

Capital requirements vary by license category. The Labuan FSA has specific paid-up capital requirements for each type of license, and in some cases also requires the maintenance of minimum working capital. Our team can provide specific capital requirement guidance as part of an initial consultation.

Does a Labuan company need local directors or shareholders?

Labuan companies are required to appoint a licensed Labuan trust company as their registered agent. There is no general requirement to have Malaysian nationals as directors or shareholders, though specific license types may have additional corporate governance requirements. Zitadelle AG can advise on the specific requirements applicable to the license type you are seeking.

Can I relocate to Malaysia as a foreign investor in a Labuan company?

Yes, subject to obtaining the appropriate visa and work authorization. The specific pathway depends on your role within the company and the nature of your involvement. Zitadelle AG assists with the full range of visa and immigration matters for foreign investors and employees relocating to Labuan and Malaysia.

What is the corporate tax rate for a Labuan company?

Labuan companies engaged in qualifying trading activities, including licensed financial services, are subject to a 3% flat tax on net audited profits. This makes Labuan one of the most tax-efficient jurisdictions in Asia for international financial services operations. 

Next Steps: Starting Your FinTech Journey in Labuan and Malaysia

If you are considering setting up a FinTech company in South East Asia — whether as a payment business, securities broker, crypto operator, investment bank, or any other regulated financial services entity — Labuan and Malaysia represent one of the most compelling combinations of regulatory credibility, tax efficiency, and operational practicality available in the region.

Zitadelle AG is uniquely positioned to guide you through the entire process. Unlike advisory firms that operate remotely from Europe or other distant jurisdictions, we have a physical office and local team in Labuan. We know the Labuan FSA, the local banks, the Malaysian immigration authorities, and the operational realities of building a business here — because we operate here ourselves.

Our services cover the full lifecycle of your FinTech establishment: corporate structuring, licensing applications, banking introductions, visa and immigration support, payroll and HR, ongoing accounting and compliance, and legal advisory. You do not need to coordinate multiple separate service providers — Zitadelle AG handles it all.

We offer an initial consultation free of charge. Whether you are at the early research stage or ready to begin an application, we welcome the opportunity to discuss your specific situation and explain what is achievable in Labuan and Malaysia for your particular business model.

To schedule a consultation, contact Zitadelle AG in our Contact US section on the website.

About Zitadelle AG

Zitadelle AG is a specialist regulatory licensing, corporate structuring, and FinTech advisory firm with a physical office in Labuan, Malaysia and an international team of financial services specialists. The firm assists FinTech companies, brokers, payment institutions, crypto businesses, and investment managers with licensing, compliance, and operational establishment across a wide range of global jurisdictions. Zitadelle AG's success is defined by the positive outcomes it achieves for its clients. Visit zitadelleag.com for more information.