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Labuan derives its name from the Malay word for “an anchorage” and is fittingly Malaysia’s only deepwater anchorage. Located on the major shipping and air routes of the Asian Region, this Malaysian Federal Territory actually comprises a cluster of seven small islands, of which Labuan it is the largest.
The island boasts excellent physical infrastructure with state of the art telecommunications system including an Internet Gateway which provides an e-commerce platform.
As a commonwealth country, the Malaysian and Labuan legal system is based on common law. All legal cases in Labuan are ultimately handled by the High Court of Sabah with appeal resting with the Court of Appeal. Final appeal rests with the Federal Court of Malaysia. Alternatively, Labuan IBFC also provides that all parties which contract within its legal parameters have recourse to arbitration, should it be preferrred.
Labuan is one of three tax free islands in Malaysia thus all goods sold in Labuan are free of Malaysian tax and in 1990, Labuan was designated an international financial centre. Aside from financial services, Labuan is also a hub for oil and gas, providing refining and support services to rigs scattered on the western seaboard of Borneo. Associated with safety and security, Labuan in its early days was a port of refuge for ships plying the waters of Borneo, providing shelter from storms and pirate attacks.
LABUAN HISTORY AT A GLANCE
1846
| Labuan was ceded to Britain and made a Crown colony
| 1963
| Labuan became a part of Sabah in independent Malaysia
| 1984
| Labuan was declared a Federal Territory
| 1990
| On 1 October 1990, Labuan was declared an International Financial Centre. Initially, it only had 6 banks, 5 legal firms and 8 accounting firms established on the island
| 1996
| The regulator of the jurisdiction, then known as Labuan Offshore Financial Services Authority came into being.
| 1997
| The Labuan Trust Act was gazetted to regulate the operation of Trusts, the Labuan Limited Partnerships Acts came into force to increase the range of business entities; the International Islamic Financial Market is proposed.
| 1998
| Labuan Securities Industry Act covering laws for fund management and Labuan International Financial Exchange (LFX) was gazzeted
| 1999
| Policy changes made to enhance the captive insurance sector
| 2000
| The formation of the Syariah Advisory Council gave Islamic financial business a boost
| 2002
| The world's first sovereign sukuk of USD600 million was issued by the Government Malaysia
| 2004
| Web-based electronic document submission and processing was launched as a more efficient, cost-effective service
| 2006
| The world's first exchangeable sukuk of USD750 million made its debut
| 2008
| In January, Labuan was repositioned and renamed Labuan International Business and Finanial Centre
| 2010
| New legislation enacted on 11 February. On Act renamed the regulator as Labuan Financial Services Authority (Labuan FSA)
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