LABUAN, October 7 – Labuan transformed and diversified into a regional commercial and financial center with the substance of an international offshore financial center in the 1990s, said the managing director of the Labuan Financial Services Authority (Labuan FSA), Nik Mohamed Din Nik Musa.
“The combination of a strong management team with experienced supervisory and regulatory knowledge and extensive industry experience has given Labuan IBFC the strength to remain steadfast, continue to grow and gain ground in the field. international financial affairs, ”he told Bernama in an interview. in conjunction with Labuan FSA’s 25th anniversary this year.
He said that this was also mainly due to Labuan FSA’s constant pursuit of maintaining financial stability and growth policies through the development and implementation of various initiatives to further improve the value propositions and maintain the status of Labuan as a well-regulated company. financial center.
Nik Mohamed Din said that several important milestones and achievements have been made over the past 25 years, the main ones being compliance with international standards of which Labuan FSA has taken a bold step to reposition Labuan IBFC.
He said the first was in 2008 to transform the traditional offshore financial center to become a vibrant international commercial and financial center and to improve its competitive advantage.
“A comprehensive review of the legislation and tax framework has been undertaken to improve the competitiveness of Labuan IBFC and to strengthen the center with a strong legal framework and in line with international standards for transparency and cooperation in supervision,” said he declared.
He said the second on the new tax changes in 2019, including the abolition of the RM20,000 tax election by Labuan entities, the taxation of business activities at the preferential rate of 3% of audited net profits and the requirement of Labuan entities to have substantial activities on the island in order to benefit from Labuan’s tax incentives, was to ensure the long-term sustainability of Labuan IBFC.
“With the changes to Labuan’s laws, Labuan is complying with international standards set by the FHTP (Forum on Harmful Tax Practices) of the Organization for Economic Co-operation and Development (OECD),” he said.
Nik Mohamed Din said that Labuan FSA and industry have undergone several international assessments on Labuan IBFC over the past 25 years, including the Financial Sector Assessment Program of the International Monetary Fund (IMF) in 2002 and 2012 – a strong legal and regulatory framework, and the OECD FHTP in 2017 – not dangerous.
He said other reviews were the peer review under the Global Forum on Tax Transparency and Information Exchange in 2011 (Phase 1), 2014 (Phase 2) and 2019 (Phase 2- Second Round) – broadly compliant, and the Asia / Pacific Group on the silver. Money Laundering Assessment (APG) and Financial Action Task Force (FATF) in 2007 and 2014 in a low risk jurisdiction and FATF membership.
“Recognition by international regulatory bodies such as IMF / World Bank, APG, FATF and OECD with a positive rating means that Labuan IBFC ranks among other major business centers in the region” , did he declare.
He said Labuan FSA is now a member of eight international organizations that promote high regulatory standards among international financial centers and has signed 23 memoranda of understanding with peer regulators in six regions to foster closer cooperation and collaboration in regulatory and supervisory areas. – Bernama