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LABUAN EXECUTIVE
SUMMARY
Labuan
Executive Summary
Labuan is centrally located
in South-East Asia
Labuan is part of
Malaysia and is well located in the centre of
the ASEAN region. 92 sq km in size, with a population
of 78,000 (according to
the 2000 census), Labuan is mostly flat, with
a good harbour and an airport served by MAS
and other airlines. Labuan was used by the British
as a coaling station during the 19th century,
and was eventually incorporated into the Malaysian
Federation. Ethnically, Labuan has a mixed Asian
population; Bahasa Malaysian is the official
language, but English is widely used. The climate
is tropical and there are extended monsoon periods.
LOFSA runs the
offshore sector . . . .
The Government sees
Labuan's future in terms of its financial sector,
and in 1990 created the Labuan Offshore Financial
Services Agency alongside a batch of 'offshore'
laws. Labuan offshore companies can make use
of Malaysia's good double tax treaty network,
and as a result the island has become the preferred
conduit for FDI into a number of local countries
including Korea and Malaysia itself. A stock
exchange was established in 2000, aiming particularly
at the listing of Islamic financial debt issues,
and has had considerable successes.
. . . and the
tax regime is benign.
Malaysian taxes are
moderately high, although on a territorial basis,
but Labuan offshore companies pay either 3%
if they trade or nil if they don't. There are
many incentives and exemptions which make it
possible for most mainland Malaysian profits
to be repatriated through Labuan without tax.
Many expatriate workers can take advantage of
personal tax incentives.
LOFSA is encouraging
e-commerce
LOFSA is determined that Labuan should become a successful
e-commerce hub, and has built e-commerce infrastructure
which can be used by incoming e-commerce operations,
as well as by the island's new financial markets.
