After the FATF delisting, Mauritius is back in the institutional banking conversation. Where does that leave Labuan?
The FATF delisting and what changed
Mauritius’s grey-listing in March 2020 materially damaged its standing with Tier-2 banks and prime brokers. Correspondent relationships were suspended; LP due-diligence for Mauritius-licensed brokers became significantly more difficult. Labuan absorbed a meaningful share of the principal-risk broker market during this period. Post-delisting, Mauritius has been active in rehabilitating its institutional standing — tightening licensing requirements, investing in supervisory capacity, and engaging proactively with prime brokers and correspondent banks. By mid-2025, most Tier-2 LP relationships had resumed accepting Mauritius FSC-licensed operators, and several Tier-1 universal banks have reactivated Mauritius on their approved jurisdiction lists.
Mauritius in 2026
The Mauritius FSC issues Investment Dealer licences (full service and broker categories). First-year total cost for an Investment Dealer (full service): approximately USD 40,000–60,000 all-in. Timeline: 4–6 months. Capital requirement: USD 200,000. Key advantages: strong double-tax treaty network including India (material for brokers with Indian client flows), recovering institutional recognition, and OECD-compliant substance requirements built in since the grey-listing reforms. Key limitation: the recovery in LP and bank acceptance, while real, is not yet uniform — some Tier-1 prime brokers and correspondent banks have not fully re-cleared Mauritius, and due-diligence burden per relationship remains higher than for Labuan.
Labuan in 2026
The Labuan FSA Money Broking licence covers spot FX and currency exchange; the Labuan Investment Bank licence covers CFDs and multi-asset products. First-year total cost: approximately USD 45,000–65,000. Timeline: 4–6 months. Capital requirement: MYR 300,000 (approximately USD 65,000). Corporate tax rate: 3% on net profit from Labuan business activity. Key advantages: never grey-listed, stable LP and processor acceptance, access to Malaysia’s 70+ DTT network, and IBFC status that provides institutional recognition beyond pure offshore jurisdictions. Key limitation: no formal passporting regime, and the Labuan brand is less recognised by institutional clients in Europe and the Gulf than EU or UAE-regulated equivalents.
The Mauritius grey-listing era created a cohort of Labuan-licensed brokers who might have chosen Mauritius otherwise. Some are now considering adding Mauritius as a second jurisdiction for specific market access rather than replacing Labuan. That is often the right answer.GSS Legal — FX and forex practice
The practical differences
Tax: Labuan’s 3% rate on Labuan-source business income is the key differentiator for profitable brokers. Mauritius’s standard rate is 15%, with a partial exemption regime for Global Business Companies — but the 3% certainty of Labuan is simpler to model. India access: if Indian client flows or LP relationships are material, Mauritius’s DTT with India provides advantages Labuan does not. Substance requirements: both jurisdictions now require genuine substance. Neither is a brass-plate jurisdiction any longer.
Banking and LP access
For Tier-2 LP relationships and major iGaming-adjacent payment processors, both jurisdictions are broadly accepted. For Tier-1 prime brokerage, Labuan has the more consistent acceptance profile. For Indian and South Asian correspondent banking, Mauritius has advantages. For operators whose primary LP relationships are European — accessing LMAX, CMC Connect, or similar — neither has a material advantage; the due-diligence process is comparable for both.
Making the decision
The decision is not “which is better” — it is “which fits your specific LP relationships, client geography, tax model, and institutional banking requirements.” Our engagement starts with a jurisdiction selection memo that maps those criteria against both options, identifies any specific processor or LP relationships that constrain the choice, and gives a clear recommendation. We do not default to one jurisdiction based on volume.
