Initial Coin Offering (ICO) in Malaysia
Updated on Tuesday 04th July 2023
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ICO in Malaysia refers to digital tokens grounded on investment schemes in this country, fundraising activities, etc. Initial coin offering in Malaysia can also be found under the name "token crowd-sale", "initial coin offerings", or "token pre-sale" in Malaysia, according to the Securities Commission in Malaysia. However, there are various formalities for ICO implementation in Malaysia that can be explained by our lawyers in Malaysia, considering that this subject is not without uncertainties.
How to register ICO in Malaysia
According to the most recent changes to the legislation regarding virtual currency and transactions of this kind, Malaysia has registered 2 Initial Exchange Offering operators, also known as IEO. With the help of these operators, innovation can be promoted responsibly, respectively in the digital assets space, which also involves ICO in Malaysia. In order to be able to implement an initial coin offering in Malaysia, you must consider the following aspects:
- Issuers of ICO in Malaysia can raise funds up to RM 100 million.
- IEO is in charge of verifying new issuers of virtual currency and making due diligence, as provided by the legislation.
- Issuers or digital money must comply with the requirements within 9 months prior to starting the activities.
- One of the sets of laws with great importance in this field is Anti-Money Laundering/Combating the Financing of Terrorism, which must be successfully implemented in the business.
- In Labuan, for example, the ICO can be implemented only after the registration of an entity that operates under a license, and with a minimum capital of MR 300,000.
- Persons or entities interested in ICO registration in Malaysia must prove that they have experience in the field and present a letter of consent from the jurisdiction where they want to operate.
- Initial coin offering in Malaysia must also have the acceptance of the Central Bank of Malaysia.
So, these are some of the rules and formalities you need to take into account for the initial coin offering in Malaysia. In this case, we recommend specialized help provided by our experts at our law firm in Malaysia.
On the other hand, if you are a foreign investor and you are interested in relocating to this country, you can contact our immigration lawyers in Malaysia. Our specialists can help you obtain residency in Malaysia, so don't hesitate to contact us.
Information about operational requirements for initial coin offering License in Labuan
If Labuan is the jurisdiction where you want to register your ICO in Malaysia, then you must know the local legislation and regulations imposed in this area. Thus, the following information is important and you must respect it when applying for the license:
- You can register ICO in Malaysia with a minimum capital of MR 300,000, presenting the source of these revenues.
- One needs an operation office in Labuan.
- You must have an agreement from the Exchange Control in Malaysia to be able to make transactions with Malaysian residents.
- You must appoint an external auditor in charge of business operation audits each year.
- The license for ICO in Malaysia, respectively in Labuan can cost around MR 40,000.
Before starting an ICO business in Malaysia, it is good to know some information about the country's economy:
- The first part of 2022 has registered an economic growth of approximately 6.9%.
- Q1 of 2022 was supported by the services sector, which registered an increase of approximately 12%.
- Also in 2022, a growth of approximately 5.5% in private final consumption expenditure in Malaysia was recorded.