KUALA LUMPUR: An all-out effort is underway to reposition Labuan as the
preferred offshore business and financial destination in the
Asia-Pacific region for international investors.
Labuan Offshore Financial Services Authority (Lofsa) director-general
Datuk Azizan Abdul Rahman said the Labuan Offshore Financial Services
Act was being reviewed and amended to expand its scope of activities.
“Some of the changes we have made in regards to development of Labuan include lowering the annual fees from RM2,600 to RM1,500, effective June this year to bring us in line with other major offshore financial centres and to make us more competitive.
“We are also engaging in negotiations and consultations with relevant parties, including industrial players, Ministry of Finance and the Securities Commission to come out with an Omnibus Act for Islamic financial services,” Azizan told in an interview.
He said the achievements of Lofsa in developing and promoting Labuan since its inception in 1996 had been commendable, with the total number of offshore companies now numbering 6,590, including 58 offshore banks, 136 offshore insurance and 21 trust companies, creating more than 1,000 direct employment and numerous other supporting services.
“In terms of size, we are not as big as some of the established offshore business centres, but we have a fair number of global companies with bases here, and a total of 17 out of the top 20 banks in the world operate in Labuan,” he said.
The total number of private funds in Labuan International Business and Financial Centre (IBFC) as at June 30, 2008 stood at 37, with a combined fund size of US$6.1 billion (RM20.43 billion). There are also two private funds operating out of Labuan with a fund size of US$130 million.
On the development of Islamic finance, Azizan said there were now 16 private and one public Islamic funds operating in Labuan with a total fund size of US$2.1 billion. The value of Sukuk approved from 2004 till 2008 stands at US$4.35 billion with US$2.7 billion issued.
“Developing Islamic finance is in line with the national agenda and Lofsa is working closely with Malaysia International Islamic Financial Centre (MIFC) to promote niche Islamic financial products,” said Azizan.
Following the creation of a separate entity, Labuan IBFC Inc, to undertake the promotion and marketing activities of the offshore financial centre, Azizan expects businesses in Labuan to expand by 10% to 15% this year, and has set a higher key performance index (KPI) for next year.
He added that one of the main advantages that Labuan offerred was the separate set of legislations that insulated the offshore financial hub from the prevailing uncertainties that marred the local economic and political scene.
“The current uncertainties in the market has somewhat affected us as well, as the number of companies offering commercial papers and other financial instruments decrease, but businesses catering to non-residents and foreign companies continue to be strong.
“The strength and the credibility of Lofsa regulations can also be seen from the number of international affiliation that Lofsa are invited to join, such as the International Association of insurance Supervisors, Asia Pacific Group on Anti-Money Laundering, Associate Member of International Organisation of Securities Commissions and as a founding member of International Islamic Financial Market,” said Azizan.
The Edge
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