One of the highlights of 2020 is Labuan IBFC’s 30th anniversary! As Labuan IBFC mark 30 years since Labuan’s inception as a business and financial hub, it has welcomed more than 15,000 registered companies, more than 800 licensed entities and has grown beyond merely serving Malaysia-based entities to other international-minded organisations in banking, leasing, capital markets, insurance, reinsurance, risk management and wealth management. Labuan has also gained solid traction as the centre of choice for players in niche financial services such as Islamic finance, digital solutions and self-insurance.
Labuan already offers one of the widest range of structures and solutions available in Asia. These existing structures from licenses in money broking, credit token, private fund management and protected cell companies means that companies only need to build a strong business case for a digital ‘wrapper’ to an existing business.
This has eased the set-up of innovative financial service providers from digital banking licences to insurtech, robo-advisory, digital exchanges, crypto trading platforms, e-payment systems and blockchain tokens. In 2019 alone, more than 30 digital related licences were approved to operate in Labuan. These businesses were drawn by Labuan’s stable regulatory and legal framework, combined with a pro-business environment.
The key to this approach is that Labuan Financial Services Authority is a facilitative one-stop regulator and is able to process each application on its merit individually. That the jurisdiction only operates in the wholesale financial markets is a huge advantage.
The rise of socially or ethically-conscious investors has also driven demand for Shariah-compliant structures. Labuan is the only jurisdiction that offers an omnibus legislation that govern all Shariah-compliant businesses.
In effect, all the licenses, structures and solutions available in Labuan may operate Islamically. Indeed, Asia’s first robo-advisory service for Shariah-compliant investments is offered via a Labuan-licensed entity. Labuan is also the world’s only jurisdiction that offers innovative Takaful captives, an in-house reinsurance solution.
For Labuan, increased globalisation is a pragmatic opportunity to continue open the doors to international businesses and investors looking to enjoy jurisdictional neutrality while operating in a sound and stable regulatory environment.
It is with the midshore approach Labuan IBFC will continuously strive for the right equilibrium to balance its market stability agenda vis-à-vis global business growth.