in turn became a part of Malaysia as the state of Sabah in 1963.
In 1984, Labuan was ceded by Sabah to the federal government and made a federal territory. In 1990, it was declared an international offshore financial centre and free trade zone. The Labuan International Business and Financial Centre (Labuan IBFC) was created as Malaysia’s only offshore financial hub on October 1990 and was operating under the name of Labuan International Offshore Financial Centre (IOFC). At the time it was established to strengthen the contribution of financial services to the Gross National Product (GNP) of Malaysia as well as to develop the island and its surrounding vicinity. The jurisdiction, supervised by the Labuan Offshore Financial Services Authority or LOFSA, offers benefits such as 3% tax on net audited results or a flat rate of Malaysian Ringgit (MYR) 20,000 to trading companies; low operational costs; liberal exchange controls; and a host of other advantages including readily available, experienced and professional service providers. In 2010 the notion "offshore" was excluded from all the statutes of Labuan due to world pressure on the tax havens and offshores.
Since its inception, the jurisdiction has expanded to become a base for more than 6,500 offshore companies and more than 300 licensed financial institutions including world leading banks. Labuan IBFC is embarking on an aggressive growth strategy to become the premier international business and financial centre in the Asia Pacific region.
Labuan's business focus is on five core areas: offshore holding companies, captive insurance, Shariah-compliant Islamic Finance structures, public and private funds and wealth management. Labuan IBFC’s position is further enhanced by the launch of the Malaysian International Islamic Finance Centre initiative in August 2006
