Financial Success during tough times … Labuan
Most of us probably don’t know Labuan, but amidst the major economic financial centers it is a shining star and part of what makes Malaysia such a power house. In an increasingly competitive and globalized world, international offshore financial centers rarely stop evolving and adapting to new circumstances and economic realities, and perhaps one of the most innovative, but lesser known, jurisdictions of recent times has been the Malaysian island of Labuan, which continues to go from strength to strength, despite the testing global economic conditions.
Labuan, situated a few miles off the northern coast of Borneo in Malaysia and tiny in size, is one of the newer additions to the list of the world’s offshore jurisdictions, but it is already attracting significant interest from businesses.
In 2010, Labuan maintained positive growth across all key business sectors, but particularly banking, leasing and insurance, despite the more challenging global environment, and new measures have been implemented recently to improve the flexibility and business-friendliness of its tax and legal framework, becoming effective as of 2009 and beyond.
Labuan has succeeded in not only attracting conventional business interest from all over the globe, it has its greatest potential in catering the growing demand for Islamic finance products. Good or bad this is what appears to be in the future.
Labuan can now be said to be the new financial force to reckoned with, having built up a favorable reputation with international investors in a short space of time. Even so, they don’t appear content to rest on their laurels, and they’ve targeted several key strategies to advance Labuan as an international business and financial center of choice in the region. “In the pipeline are a number of initiatives under the Malaysian Financial Sector Blueprint, which aims to provide a holistic approach for the development of the Malaysian financial sector for the next 10 years“. Despite the gloomy world economic outlook and ongoing moves to force more regulation on offshore financial centers, with Malaysia’s backing it would seem that the sun is shining on Labuan’s future.
Edi Alvarez, CFP®
BS, BEd, MS