In the context of global transparency, how should we complete the top-level structural design of offshore wealth management?

Transparency is a growing trend.

We have to admit that without the current digitization of information in the world, it would be really hard to truly implement anti-tax avoidance agreements like TIEA, ATIEA, FATCA and the most recent CRS. From the earliest TIEA, we have noticed that several of the largest countries in the world have reached a consensus on anti-tax avoidance in political, economic and financial arenas. That’s because it benefits all stakeholders.


The Consequences of Brexit for Chinese Investors and the Key Role of Consultancy

The UK referendum of 23rd June 2016 ratified the UK’s decision to exit the European Union and to undertake a new and alternative path towards prosperity and growth. Contrary to the forecasts shown by the opinion polls carried out in the days preceding the referendum, the remain vote invoked by the ex-Prime Minister David Cameron, by the British financial sector and by numerous foreign countries was unexpectedly defeated, with a minority of only a few thousand votes. The leave faction won with 17,410,742 votes, representing 51.9% of the total.


Localization development of family offices in China

With family trust and family assets management becoming popular topics, family offices are also springing up in China. Although most family offices mainly focus on the preliminary consultation about family wealth management and the configuration and promotion of insurance and financial products, their toes are being more and more extensively dipped into the field of family wealth management.





Labuan, 18 July 2016 – The Labuan Financial Services Authority (Labuan FSA) announced the release of its Annual Report for 2015 (AR2015) which highlighted Labuan International Business and Financial Centre’s (Labuan IBFC) continued growth trajectory in 2015 and its strengthened position as a viable IBFC in expanding its foot print in the Asia and the Pacific region. The AR2015 also reported on Labuan FSA’s financial position for the year ending 31 December 2015.

Amidst a modest global economic recovery, Labuan IBFC achieved another year of growth momentum, albeit at a lower growth rate, fuelled by robust business policies and continued intermediation enabling investors to tap into the business opportunities in the ASEAN market, strategically positioning Labuan as the investment gateway to the region. While Labuan IBFC operates in a conducive business environment, Labuan FSA ensures that the laws and regulations governing the IBFC are in conformity with internationally recognised standards on transparency and sound regulatory requirements, maintaining a well regulated environment for legitimate and genuine businesses to operate in.

In the course of 2015, the centre achieved several notable achievements highlighted below:

Deepening and broadening its footprint in Asia and the Pacific region

• A total of 836 new companies were incorporated for the year under review. More than 70% of the companies originated from Asia reflecting that Labuan IBFC remains a favorable destination for multinational companies looking to expand into the AsiaPacific markets;

• Two new banking licences were granted in 2015. The banks’ total deposit rose 17.9% to USD10.8 billion, signifying investors’ greater confidence in placing funds in Labuan IBFC while Islamic financing increased significantly by 55% to USD1.8 billion compared to USD993.3 million a year before. Non-residents dominated 77.3% of total 2 Islamic financing. The banking sector boosted its profit before tax to USD620.6 million, an increase of 34.6% from 2014;

• A total of 16 new insurance and insurance-related licences were approved, including entrance of insurance entities from the Middle Eastern countries of Qatar and United Arab Emirates, as well as Switzerland. Overall, the Labuan insurance sector has a strong margin of solvency of 5.7 times above the minimum regulatory requirement and the industry capitalisation also increased to USD832.3 million from USD783.3 million with 74% dominated by foreign entities;

• The capital market sector continued to grow with private fund size increasing by 0.9% to USD12.3 billion. In geographical distribution, 58.5% of the private funds originated from the ASEAN region;

• The Labuan International Commodity Trading Companies (LITCs) sector fared well with eight new approvals granted, bringing the total to 43. About 79% of these companies originated from the Southeast Asia region. For Labuan’s leasing business, 45 new companies and 60 subsequent leasing transactions were granted approval. Total assets leased grew to USD51.8 billion where 73% derived from the oil and gas industry and 25.2% from aviation sector;

• Wealth management remains one of the high growth sectors in Labuan IBFC with nearly 28% increase in the number of Labuan foundations, bringing the total to 166. The growing trend shows that Labuan’s comprehensive wealth management instruments continue to entice the interest of high net-worth individuals. More than 77% of Labuan foundations originated from Asia and the Pacific region. Labuan IBFC is also leading in Islamic wealth management where the Authority introduced the Labuan international waqf guidelines in 2015, placing Labuan as the first IBFC to facilitate the establishment of a waqf under common laws.

Conforming with international standards on transparency & regulatory compliance and Advancing regional and international relations

• Malaysia (including Labuan IBFC) was one of the early jurisdictions to undergo the APG mutual evaluation exercise under the new methodology to ensure the adoption, implementation and enforcement of internationally accepted standards against money laundering and the financing of terrorism. The admission of Malaysia as a member of the FATF in February 2016 is a testament of its commitment to standards and practices in AML/CFT;

• During the year, Labuan FSA continued to advance in supervisory cooperation with international regulatory authorities through the exchange of information with counterparties. A total of 42 requests for exchange of information were facilitated by Labuan FSA in 2015 and one new MoU was sealed with the Cayman Islands Monetary Authority to foster greater efficiency in mutual assistance.

• Labuan FSA was also re-elected as the representative for the Pacific Region in the Group of International Insurance Centers Supervisor to represent the common voices of the financial centres in the Pacific region.

Advocating investment in capacity and capability building

• The talent development initiatives were designed to link with IBFC business strategies and to ensure the talent proposition remains relevant, competitive and be able to keep pace with the constantly changing financial landscape. High priority was placed on close collaboration with the industry and professional training institutions to provide professional certification programmes and target technical training programmes to build technical competencies of the staff of Labuan FSA and IBFC industry workforce. Labuan FSA is also committed to providing a conducive learning environment for the local Labuan community at large through its contribution to the Labuan International School. In 2015, the Olympic-sized swimming pool and hostel blocks were completed to cater for the increasing student intake.

Established in 1990, Labuan IBFC celebrated its silver jubilee in 2015. Labuan has demonstrated great agility in shifting into a reputable international and business financial centre with wide international and regional linkages in its 25 year journey. Moving forward, Labuan IBFC will continue to be shaped by the shifting financial market dynamics and financial regulation development globally. Underpinned by the ASEAN Economic Community integration with new business opportunities opening up for investors, Labuan FSA is confident that Labuan IBFC has the potential to fulfil the financial and business needs of the regional economic community. For the financial year ending 31 December 2015, Labuan FSA recorded an increase in operating income to RM53.9 million compared to RM52.7 million in 2014, while its total reserves also increased to RM59.6 million from RM52.4 million.

Labuan Financial Services Authority 18 July 2016

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