fiscal , legal and currency neutral “ home ” for crossborder transactions .
So , will transparency on transactions , legal structures and tax lead to the death of IFCs ? This is hugely dependent on the individual IFC , and how each IFC measures up in this massive global review on the usability of IFCs . So as it stands , instead of tax savings being the sole aim of using a jurisdiction , considerations now have evolved into more substantive questions such as location , efficiency , scalability , range of legal structures , reputation and compliance to international standards , with the last two considerations essentially being two sides of the same coin .
Malaysia and Labuan IBFC ’ s Response As part of Malaysia , Labuan IBFC has always been party to all the international conventions ratified by Malaysia including the commitment to OECD and other multilateral organisations , with the anti-money laundering rules that apply to onshore Malaysia also applicable to Labuan IBFC .
This is one of the reasons why historically Labuan IBFC has always been perceived as somewhat of a laggard amongst IFCs . The fact is the jurisdiction should have never been bucketed together with the more “ traditional ” IFCs . Labuan IBFC is in fact a midshore IFC , marrying the efficiencies of a traditional offshore centre with the robust legal and regulatory framework of an onshore centre . It is effectively a hybrid jurisdiction that believes in the proportionality in regulation , operated by a globally recognised one-stop probusiness Regulator .
Will Labuan IBFC continue to adhere to the ever-evolving global standards of transparency ? Yes , we will . And at the same time , ensure that our IFC remains competitive via the legal structures and the cost-efficient substance propositions that we offer .
After all , any Asian entity looking for a frictionfree environment to house their regional / global hub would do well to consider Labuan IBFC in ensuring all its global reporting responsibilities are met , without having to endure the threat of reputational damage .
Benefitting from the flight to quality In the new era of transparency , IFCs need to mould themselves into a business facilitator rather than just mere locations for entities looking to operate in low-tax countries for tax advantages . Taxpayers need to appreciate that taxes now come with a burden of morality , respectability and fairness . At the same time , all Governments continue to juggle tax policies with national economic interest , under the everwatchful eye of supranational organisations hosting an ever-growing appetite for transparency and along with that , substance .
Without a doubt , Labuan IBFC will continue to offer global businesses with Asian connections a pro-business environment , while focusing on its strengths and comparative advantages – specifically on it being a substance enabling jurisdiction located in the middle of Asia that is well supported by the large Malaysian hinterland , and a dynamic and skilled work force boasting strong ties to key Asian powerhouses like China and India . And yes the flight to quality jurisdictions is real . Having said that , there are challenges to be faced and changes to adapt to for all IFCs , but as always along with change comes opportunity !
Disclaimer : This article provides general information on Labuan IBFC and should not be relied upon when formulating business decisions , nor should it be treated as a substitute for professional advice pertaining to particular business circumstances . While all information herein has been prepared in good faith , no representation or warranty , expressed or implied , is made and no responsibility or liability will be accepted by Labuan IBFC Incorporated Sdn Bhd or Labuan Financial Services Authority as to the accuracy or completeness of this document . Further , this document does not include any statement or opinion with regard to the laws governing Labuan IBFC or Malaysia and specific legal advice should always be sought from qualified lawyers and / or professional advisors . In addition , this document is not directed to any person in any jurisdiction where ( by reason of that person ’ s nationality , residence or otherwise ) this publication or availability of any services offered within it , is prohibited and deemed unlawful . Please note that information contained herein is subject to change without prior notice .
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