The Labuan International Business and Financial Centre (IBFC) has turned its focus to niche financial areas with high growth potential, such as captives, according to a report.
The report, produced by the Labuan IBFC, stated that, as Labuan is a midshore centre it offers “the ease of doing business found typically in offshore centres, combined with high international standards of regulation and supervision found onshore”.
The international business and financial centre has recognised that the domicile needs to “further refine” the midshore centre concept by moving away from broad-based financial services and look to focus on niche areas with high grow potential.
These areas included captive insurance, leasing, commodity trading and wealth management. According to the report, these areas have continued to show an upward trend in driving the centre’s growth in recent years.
It said: “In the insurance space, the increasing interest among corporates to establish captives as a risk management strategy presents immense opportunities to offer risk solutions that complement the onshore activities.”
The Labuan IBFC said it “must continue to subscribe to high international standards of regulation and supervision. Policies and regulations must be facilitative of business and proportionate to risks. This prevents our industry from attracting undesirable activities and elements”.
The IBFC noted that a tax review exercise is currently in process to harmonise it with that of the national tax system.
The report stated: “This will better align the centre with international efforts to arrest tax evasion and profit shifting, whilst preventing leakages of tax income accruing to the nation for transactions involving residents.”
