LABUAN (September 29): The Labuan International Business and Finance Center (Labuan IBFC) has contributed more than RM900 million to raise the country’s tax revenue for 2021, the Labuan Financial Services Authority said ( Labuan FSA).
Its managing director, Nik Mohamed Din Nik Musa, said that being an international financial centre, Labuan IBFC is becoming one of the key elements of the Malaysian economy, in line with government aspirations.
He said Labuan IBFC’s commercial and financial activities have contributed significantly to the economic growth of Labuan, contributing more than 60% to the gross domestic product (GDP) of the island, becoming one of the largest Labuan job providers, with more than 6,000 people employed in the Labuan IBFC.
“It helped increase local spending and stimulated other economic spinoffs on the island,” he told Bernama.
The achievements of the Labuan IBFC have been made possible with Labuan FSA being the main driver for the growth of the jurisdiction.
Nik Mohamed Din said that over the past 30 years, the progressive guidance of Labuan FSA has been instrumental in the progressive development and growth of Labuan IBFC, contributing significantly to the physical and socio-economic development of Labuan.
Labuan FSA is a statutory body (under the Ministry of Finance), responsible for the development and administration of IBFC Labuan.
“As Labuan IBFC enters its fourth decade as a pioneering center for financial intermediation, its reputation as one of Asia’s leading and innovative international centers continues to grow,” said Nik Mohamed Din.
He said the culmination of three decades of forward-looking strategies, innovative measures and impactful action plans that Labuan FSA has nurtured, has led to the evolution of Labuan IBFC into the award-winning growth pillar of internationally renowned, as we see today.
Nik Mohamed Din said Labuan IBFC persevered through many challenges and obstacles throughout its journey, including the global financial crises of 1998 and 2008.
“The crises had triggered a wave of global stability measures, particularly on regulatory fronts that had reshaped the international financial landscape.
“Accelerating globalization, integration and recalibration of financial markets due to financial crises, as well as technological advancements and disruptions, have been major drivers of changes in Labuan IBFC’s business landscape,” a- he declared.
Nik Mohamed Din said the Covid-19 pandemic had had a profound impact on international markets and global economies and tested the robustness and resilience of Labuan’s financial system.
“Despite challenging externalities and intense global competition, Labuan IBFC has weathered the storms and continued to grow,” he noted.
Nik Mohamed Din said that during the years of establishment of Labuan IBFC, Labuan FSA focused on building the foundations to provide a conducive business environment with the necessary physical infrastructure and attractive tax incentives to attract critical mass to the shores of Labuan.
“Efforts have also been made to develop the policies and regulatory framework to adapt to international best practices,” he said.
Relying on these factors, he said that Labuan IBFC experienced phenomenal growth during its formative years with the Labuan company growing annually at around 30% in the first decade.
“As a local financial center in Asia, Labuan has undoubtedly remained an important IBFC in the region, attracting thousands of companies and investors from 125 countries across six regions, of which more than 70% of Labuan entities are originating in Asia and the Pacific region.
“It has become a center for players in niche financial services such as aircraft leasing and oil and gas services, reinsurance and captive insurance,” he said.
Nik Mohamed Din said the innovations have also driven growth in new frontiers such as digital financial services that are revolutionizing the financial market space and ecosystem.
“Labuan’s growing prominence internationally has been reinforced by Labuan FSA’s extensive efforts to increase visibility and develop links with international standards bodies, and closer engagements with home and host authorities. to maintain a balanced diet that promotes the stability and integrity of the Labuan IBFC,” he said.
Nik Mohamed Din said this was also supported by a strong advocacy for better transparency and complemented by strict anti-money laundering regulations that Labuan IBFC had adopted. – Bernama