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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 about 90,000, 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 (although
'Offshore' has since been dropped from the title)
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.
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