LABUAN SET TO ONLY GROW STRONGER AND FURTHER IN THE DIGITAL FINANCE SPACE

Labuan’s reputation as a financial centre dates back to 1990 when the Labuan International Business and Financial Center (Labuan IBFC) was created.

It became Malaysia’s only offshore financial hub with the aim of strengthening the country’s economy as well as its surrounding area.

Since its inception, the financial hub has implemented several measures designed to attract more companies. These measures include a preferential tax regime, minimal foreign exchange controls, the absence of capital gains and withholding taxes, the availability of multilingual and skilled local workforce and competitive operational costs.

Over the years, Labuan has emerged as a potential hub for wealth management, home to several service providers and structures allowing High Net Worth individuals (HNWIs) to protect and grow their wealth.

There are several vehicles HNWIs can use and one such vehicle is the Labuan Foundation which can be used by Family Offices, among others.

The Labuan Foundation is made up of corporate bodies that exist as legal entities, set up to manage their own property for any lawful charitable or non-charitable purpose. There also exist Labuan Islamic foundations, whose operations must be in compliance with Shariah principles.

Typically, Labuan Foundations are used for asset protection, charitable purposes, business succession, wealth management and other activities.

“I would not want to put Labuan in the same category as Singapore or Hong Kong, they are very different jurisdictions with their own strengths. However, there are certainly areas where Labuan excels at,” Ken Vui Cau, Managing Director for Alpadis Group Labuan tells BusinessToday.