Labuan International Business and Financial Centre (IBFC) Inc. Sdn. Bhd. the official agency sanctioned by the Malaysian Government to market Labuan as the premier international business and financial centre in the Asia Pacific region, has opened its doors to corporations and investors in India towards lucrative investment potentials in Labuan. The offshore financial centre is recognised as one of the major international business and financial centres in the region.
Labuan, 2.5 hours ahead of India, falls within a time zone that is business friendly to Indian investors. Labuan IBFC focuses on areas such as Holding companies, Islamic Finance, Private & Public Funds, Captive Insurance and Wealth Management. Besides, it has a one stop regulatory authority known as Labuan Offshore Financial Services Authority or LOFSA for faster approvals, a low cost environment to facilitate business operations, a wide range of products and a complete spectrum of service providers.
According to Martin Crawford, CEO of Labuan IBFC Inc Sdn Bhd, “With the regulatory will of LOFSA and the marketing prowess of Labuan IBFC Inc, this Malaysian offshore jurisdiction is well on the road to becoming Asia’s most connected, convenient and cost-efficient IBFC and a global brand of distinction”.
Labuan has seen significant growth since its inception. The IOFC had seen US$14.7 billion approved lease transactions, US$16 billion debt issuance by corporations, US$6.4 billion private funds approved, US$4.2 billion of Islamic notes listed on the Labuan International Financial Exchange (LFX), US$3.8 billion non-security capital raised through Labuan-based companies and US$700 million insurance premiums written out of the IOFC.
Currently there are 6,590 offshore companies registered in Labuan. The island is host to 58 banks with US$26 billion in total assets comprising loans and advances, 136 insurance entities, 13 offshore leasing companies, 21 fund management companies and 32 listed financial instruments totalling US$16.1 billion in the federal territory.
Labuan despite being the premier business and financial centre in the Asia Pacific region, offers value for money to investors and corporations to conduct their business. The annual operating charge in Labuan is approximately US $ 12,680, which is much lower than other domiciles like Singapore, Hong Kong and New Zealand. Additionally, Malaysia has 68 double tax treaties in place, more than any other jurisdiction in the region. It has a standard corporate tax rate of 3% or a maximum of US$5,600, which is comparatively lower than Singapore, Hong Kong, Mauritius and Netherlands.
Mr. Crawford adds, “Our mission in India is to showcase Labuan IBFC to trust companies, tax accountants, legal firms with tax practices, independent registration agents who typically recommend a jurisdiction to companies and high-net-worth individuals”. Crawford is confident of a positive response from Indian investors; some of them have already expressed their desire to set up international holding companies in Labuan.
Labuan’s business friendly regulatory regime has passed the scrutiny of the International Monetary Fund (IMF) and the Organisation for Economic Co-operation Development (OECD) and its legal framework has been designed to meet international standards. Labuan administered by the Federal Government of Malaysia, is easily accessible, has a developed infrastructure, satellite telecommunication, political stability, low cost of operation and shares the same time zone with other major Asian cities as well.
About Labuan IBFC
Labuan International Business and Financial Centre (IBFC) enable investors to benefit from Malaysia’s double-taxation treaty network with 68 countries and a cost-efficient offshore business environment. Investors can enjoy Labuan’s extensive professional services in tax, law and finance supported by robust and progressive regulations. Increasingly, Labuan is becoming the jurisdiction of choice for Islamic Finance, holding companies, captive insurance, leasing and funds.
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