“The combination of a strong leadership team with experienced supervisory and regulatory knowledge and extensive industry experience have given the strength for Labuan to remain steadfast, continue to grow and gain traction in the international financial business arena,” he told Bernama in an interview in conjunction with Labuan FSA’s 25th anniversary this year.
He said this was also mainly attributable to the consistent pursuit by Labuan FSA to maintain the financial stability and pro-growth policies through various initiatives to enhance and maintain the status of Labuan as a well-regulated financial centre.
Nik Mohamed Din said several significant milestones and achievements have been achieved over the past 25 years, with the key ones being conformity with international standards, which Labuan FSA undertook to reposition the island’s status as an international financial business centre (IFBC).
He said the first one was in 2008 to transform the traditional offshore financial centre to become a vibrant international business and financial centre and to enhance its competitive edge.
“A holistic review of the legislation and tax framework was undertaken to enhance and strengthen the competitiveness of Labuan IFBC in line with international standards on transparency and supervisory cooperation,” he said.
He said the second one was on new tax changes in 2019, including the taxing of trading activities at the preferential rate of 3% of the net audited profits and the requirement of Labuan entities to have substantial activities in the island in order to avail themselves of the tax incentives, was to ensure the long-term sustainability of Labuan IFBC.
“With the amendments made to the legislations, Labuan is complying with international standards as set by the Organisation for Economic Cooperation and Development’s (OECD) Forum on Harmful Tax Practices,” he said.
Nik Mohamed Din said Labuan FSA and the industry had undergone several international assessments on Labuan IFBC in the last 25 years, including the International Monetary Fund’s (IMF) Financial Sector Assessment Programme.
“The recognition by international regulatory bodies shows Labuan IBFC is in the ranks of other major business centres in the region,” he said.
He said Labuan FSA is now a member of eight international organisations that promote high regulatory standards among international financial centres, and has signed 23 memorandums of understanding with peer regulators across six regions to foster closer cooperation and collaboration in regulatory and supervisory areas.