Labuan IBFC launches roadshows in ASEAN

The Labuan International Business and Financial Centre (Labuan IBFC), Asia Pacific’s midshore international business and financial centre, has launched a series of roadshows across ASEAN.

The Labuan IBFC ASEAN Roadshow 2016 will visit key countries in ASEAN and, for the first time will include events as well as closed door briefings in the emerging economies of Cambodia, Laos, Vietnam and Myanmar. The roadshows have kicked off in Jakarta, Indonesia, will continue through till end-July.

“Our approach to the roadshow this year is distinct as we are targeting business owners in the region looking to internationalise or even regionalise their businesses. We believe that with as businesses embrace higher tax transparency requirements, it would be natural for them to consider to establishing substance in a well-regulated jurisdiction facilitate cross border transactions and investments.” said Danial Mah Abdullah, Chief Executive Officer, Labuan IBFC.

He went on to state that the roadshow will also focus on meeting the wealth management needs in the region.

Mah, who is also the Deputy Director General of Labuan FSA, said, “What makes Labuan IBFC different is that it was established with the main aim of intermediating crossborder trade and investments in the region. The expectations are that intra-Asia and ASEAN trade and investments will grow, and there is a need for a well-regulated jurisdiction in the region able to facilitate these trades and investments. ”

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Labuan IBFC emphasises focus on compliance and transparency for business activities

In the wake of the Panama Papers expose, the Labuan International Business and Financial Centre (Labuan IBFC) has emphasised that it continues to play a facilitative role for cross-border trades and investments, particularly in the ASEAN region, but also ensures rigorous transparency and high regulatory requirements for the business activities undertaken by players.

The centre has continuously enhanced its regulatory framework and supervisory regime in conformity with international standards and practices on transparency and regulatory compliance, said the organisation in a statement.

“The current issue relating to the information leakage has heightened the demands for greater transparency and effective exchange of information across all international financial centres,” said Danial Mah, CEO, Labuan IBFC, the marketing arm for Labuan Financial Services Authority (Labuan FSA).

Considering that Labuan has attractive value propositions and is strategically located to investors to establish their businesses in this region, there is a need to ensure that the laws and regulations are robust to govern the centre and ensure that it operates in a sound, prudent and transparent manner.

He added that “the business activities in Labuan IBFC are conducted under a strong set of rules and regulations that ensure the orderly establishment and operations of Labuan business entities including the licensing of financial institutions”. 

Labuan FSA, as the regulatory authority, supervises and regulates the various financial institutions including trust companies which are responsible for the registration of Labuan entities. They are required by regulations to have proper due diligence process in place when dealing with potential customers and maintain records and accounts of their clients in Labuan.

Labuan IBFC as part of Malaysia is committed to the global standards and requirements on transparency and exchange of information. In the area of taxation, Labuan IBFC’s tax laws are in compliance with the internationally agreed tax standards under the OECD Global Forum on Tax Transparency and Effective Exchange of Information.

Malaysia including Labuan have been cooperating with other countries in exchange of information under the various multilateral and bilateral agreements including the Double Tax Agreements signed by Malaysia with more than 75 countries. The Labuan Business Activity Tax Act 1990 was amended in 2010 to provide for accessing and sharing of information with other regulatory and competent authorities. Labuan IBFC is also committed to the reporting requirements under the Foreign Account Tax Compliance Tax Act and Common Reporting Standards for Automatic Exchange of Information (CRS-AEOI).

Mah reiterates “in fact, Malaysia (including Labuan) is among the countries that made early commitment to adopt the OECD standards on exchange of information”. Furthermore, Labuan is a full signatory to the International Organization of Securities Commission’s Multilateral Memorandum of Understanding (MOU) that enhances regulatory cooperation with other Securities Commissions on capital market activities. It has also signed bilateral MOUs with other regulatory authorities to further reinforce cross-border cooperation on regulatory and supervisory activities.

In addition, the jurisdiction requires its players and service providers to be in compliance with the laws and guidelines pertaining to Anti Money Laundering and Combating Financing of Terrorism (AML/CFT). Malaysia (including Labuan) was one of the early jurisdictions to undergo the international mutual evaluation exercise under the new methodology in 2014 and the admission of Malaysia as a member of the FATF in February 2016 is a testament of the commitment to standards and practices in AML/CFT.

Mah concluded that Labuan IBFC will continue to play a positive role in providing the synergy and connectivity for financial linkages and businesses in the region, particularly among the ASEAN countries. “We welcome legitimate and genuine businesses and players that want to operate in Labuan IBFC’s cost-efficient and well-regulated environment.” he said.

Labuan IBFC reports 12.3% rise in new company registrations in 2014

Labuan International Business and Financial Centre (Labuan IBFC), Asia Pacific’s midshore international business and financial centre, reported strong performance across all financial sectors in 2014, including banking, insurance, leasing, wealth management and Islamic finance, with 12.3% increase in new company registrations compared to the previous year.

The organisation notes that 70% of companies registered in Labuan IBFC originate from Asia, with 57% from Southeast Asia, mainly Indonesia, Malaysia, Singapore and Thailand.

“Labuan IBFC has its strengths in terms of its proximity to strategic Asian markets and sound regulatory framework, with simple as well as competitive tax system. With our balanced supervisory and regulatory framework coupled with our strategic location in the heart of Asia Pacific, we believe Labuan IBFC stands out as the ideal ‘midshore’ jurisdiction from which to base regional business operations for both trading and investment purposes,” said Danial Mah Abdullah, Chief Executive Officer at Labuan IBFC.

At a roadshow in Hong Kong marking Labuan IBFC's 25th anniversary, Danial added that Labuan IBFC can tap on and complement Hong Kong’s position as the gateway to China by providing business solutions including business process outsourcing and effective legal structures through which entrepreneurs can effectively structure their businesses operations.

In the wealth management sector, Labuan IBFC foundations are increasingly used as wealth preservation solutions. There was an almost 40% increase in the number of Labuan IBFC foundations established in 2014 compared to the previous year, with 73% of them originating from Asia.

“As ASEAN grows in economic might, the increase in wealth in the region is outpacing the rest of the world. Companies and private investors looking to expand in ASEAN are in search of effective and legitimate ways of capitalising on this growth, keeping in mind the importance of adhering to international standards and best practices. Labuan IBFC has been fulfilling these needs, with its proximity to strategic Asian markets, sound regulatory oversight and simple and efficient tax framework,” added Danial during the Singapore leg of the roadshow, which was held earlier in the month.

While wealth management is one of the core offerings of Labuan IBFC, the business and financial centre also carries out all aspects of business and financial activity ranging from banking and insurance to Islamic financial services.