The Midshore Jurisdiction
Labuan International Business and Financial Centre (Labuan IBFC) presents a comprehensive midshore solution striking the ideal balance between client confidentiality and compliance with international best standards and practices. Its business-friendly environment, anchored by a simple and attractive tax system, is well-supported by a robust, modern and internationally-recognised legal framework enforced by its regulator, Labuan Financial Services Authority (Labuan FSA).
Labuan IBFC boasts a wide range of business and investment structures facilitating cross-border transactions, business dealings and wealth management needs. These unique qualities offer sound options for regional businesses going global or global businesses looking at penetrating Asia’s burgeoning markets.
Strategically located in the heart of Asia Pacific, Labuan IBFC is well positioned to tap into one of the fastest growing regions in the world, presenting the perfect opportunity for businesses seeking to connect with Asia’s economies and beyond.
A WELL-REGULATED JURISDICTION
Labuan IBFC, regulated by Labuan FSA, has a comprehensive, modern and globally-recognised regulatory framework.
The jurisdiction’s adherence to international standards and best practices in financial services and prudential supervision, including protocols on anti-money laundering and exchange of information and regulatory requirements set by the Organisation of Economic Co-operation and Development (OECD), reinforces Labuan IBFC’s commitment to ensuring a safe and secure business environment.
SIMPLE TAX STRUCTURE
Labuan IBFC’s simple and straightforward tax system applies to Labuan entities carrying on a Labuan business activity under the Labuan Business Activity Tax Act 1990. It has an unambiguous fiscal framework that provides an ideal ecosystem for global companies to house their international dealings and transactions.
As Asia Pacific’s premier midshore international business and financial centre, Labuan IBFC provides a wide spectrum of financial products and services for corporations and individuals, both in the conventional and Islamic space. The jurisdiction has moved beyond banking, capital markets, leasing and insurance to also include protected cell companies, partnerships, trusts, foundations and an international shipping registry, among others.
MODERN LEGISLATION
Labuan IBFC’s comprehensive regulatory framework provides for a broad range of legal entities including companies limited by shares or by guarantee, foundations, special purpose trusts, protected cell companies, captives, limited liability partnerships and private trust companies. Businesses in Labuan IBFC are generally governed by the following eight modern Acts:
- Labuan Business Activity Tax Act 1990
- Labuan Companies Act 1990
- Labuan Trusts Act 1996
- Labuan Financial Services Authority Act 1996
- Labuan Financial Services and Securities Act 2010
- Labuan Islamic Financial Services and Securities Act 2010
- Labuan Foundations Act 2010
- Labuan Limited Partnerships and Limited Liability Partnerships Act 2010
The introduction of the Labuan Islamic Financial Services and Securities Act 2010 – the world’s first omnibus legislation governing all Shariah-compliant businesses in an international business and financial centre – provides a greater degree of comfort and certainty to businesses and investors as it covers every aspect of Shariah-compliant financial services, with the establishment of its own Shariah Supervisory Council.
NOTICE OF FATCA COMPLIANCE
Labuan FSA via a circular to all financial institutions reinforced the agreement in substance between the Malaysian Government and the United States Treasury reached in June 2014, towards the implementation of the Foreign Account Tax Compliance Act (FATCA) in Labuan IBFC.
It said that the agreement in substance will remain effective until a formal Inter-Governmental Agreement is signed. Please click here for a copy of the circular.