LABUAN INTERNATIONAL COMMODITY TRADING (“LITC”)
What is LITC?
A LITC is a dedicated type of Labuan Company that is registered with the Labuan Financial Services Authority (Labuan FSA), the regulator of Labuan International Business and Financial Centre (Labuan IBFC).
Uniquely, although set up as a Labuan company, LITCs are allowed to operate anywhere in Malaysia with minimum economic substance in Labuan, and as such, are not limited to operating out of Labuan.
LITCs are allowed to undertake the trading of physical products and related derivatives of the following commodities:
- Petroleum & petroleum-related products including LNG;
- Minerals;
- Agriculture products;
- Refined raw materials;
- Chemicals;
- Base minerals;
- Coal
Key Considerations:
Lower Operation 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 city-state has become less competitive over the years.
World-Class Storage Facilities
Traders will have access to world-class storage facilities such as Tanjung Pengerang in Johor. This deep water port (up to 26 meters) offers large super tankers easy access to 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 offers traders an extensive range of insurance and risk management solutions.