1.1 The purpose of the Guidelines is to clarify the application procedure, operational and regulatory requirements for Labuan companies carrying out leasing business1 in Labuan International Business and Financial Centre (IBFC).
1.2 "Leasing business" is defined as the business of letting or sub-letting property on hire for the purpose of the use of such property by the hirer regardless whether the letting is with or without an option to purchase the property2, including charters of ships (bare-boat basis). The assets leased under Labuan leasing business are expected to be big ticket items of high value or specialised assets.
2.1 The Guidelines is applicable to all Labuan companies carrying out leasing business in Labuan IBFC pursuant to Sections 90 and 92 of the Labuan Financial Services and Securities Act 2010 (LFSSA) and Sections 65 and 67 of the Labuan Islamic Financial Services and Securities Act 2010 (LIFSSA).
2.2 The Guidelines shall exclude and not applicable for the underlying leasing transactions which are done for the purpose of facilitating the issuance of Sukuk Al-Ijarah. Nonetheless, ijarah leasing business shall observe all the requirements of the Guidelines.
3.0 Legal Provision
3.1 The Guidelines is issued pursuant to Section 4A of the Labuan Financial Services Authority Act 1996 (LFSAA) to clarify the requirements on the establishment and operations of Labuan leasing company licensed under Section 92 of LFSSA and Section 67 of LIFSSA, respectively.
3.2 Any person who fails to comply with the Guidelines commits an offence upon which Labuan FSA may undertake appropriate enforcement action to the extent provided by the law.
4.0 Effective Date
4.1 Save for Paragraph 7.11, all requirements of the Guidelines shall come into effect on 1 January 2018. The substance requirements by the Labuan leasing companies under Paragraph 7.11 shall come into effect on 1 January 2019 to provide sufficient transition period for compliance.
4.2 The Guidelines on the Establishment and Operations of Labuan Leasing Business (issued on 1 August 2013) and Clarification Note for Guidelines on the Establishment and Operations of Labuan Leasing Business (issued on 10 October 2013) are now repealed.
4.3 All approvals granted by Labuan FSA relating to Labuan leasing business before the effective date of this Guidelines shall remain valid unless otherwise revoked or if the lease transaction has expired.