Labuan International Business and Financial Centre (LBIFC) is aiming big with plans to become a regional financial centre in a bid to raise its profile and spark greater regional trade and investment, LIBFC CEO Saiful Bahari Baharom said in Kuala Lumpur.
LIBFC, owned by the Labuan Financial Services Authority (LFSA), is striving to uplift both the perception and the role of the financial centre, altogether focusing on the centre’s wealth management potential and positioning itself as a midshore jurisdiction with a businessfriendly yet robust regulatory framework.
“The Asean Economic Community is coming by 2015 and Labuan will see increased transactions between the Association of South-East Asian Nations (Asean) and the outside world.
“In this context, there is the prospect for Labuan to act as the platform for intra-Asean trade and investment,” Saiful said in an interview with The Malaysian Reserve recently.
For example, Saiful said, if a Chinese businessman were to do business with Asean, it would be proactive to use the Labuan services as “we are positioning ourselves to be the cross-border, cross-countries financial centre that will facilitate the transaction.”
The foreign based company, Saiful explained, will find it easier to form a company under Labuan’s financial centre and the company will benefit from all the facilities and also will be able to transact with Asean.
Offshore financial services, blamed for the 2008 financial crisis, has in fact contributed largely to global trade with some 60% of global trade filtering through such centers, Saiful said.
Labuan is bound to register a huge jump in its total financing in 2013, with the current figure as of May this year standing at US$542.7 billion (RM1.79 trillion). It registered a total financing amount of US$528.5 billion (RM1.74 trillion) last year.
In 2008, IBFC went through a rebranding and re-positioning exercise that was conducted to reflect the jurisdiction’s burgeoning international status.
An aggressive marketing exercise followed with the incorporation of Labuan IBFC, mandated by the Malaysian government to market and promote Labuan as the premier international business and financial centre in the Asia-Pacific region.
In 2010, new laws were introduced that brought in the Labuan Trusts and Labuan Foundation. Both are legal entities that are at the services to be offered to high net worth individuals to manage their wealth.
“With regard to this, we are promoting the foundation and the wealth management services,” Saiful said.
Saiful said Labuan does a brand audit, which is an annual exercise and such an audit will be carried out this year to see how the reputation of the brand recognition is performing.
“We are doing another brand audit this year and we will compare and will see whether the brand recognition has moved up in the last 12 months,” Saiful said.
The CEO said that before 2010, Malaysians were not allowed to use the Labuan services but with the new regulation from 2010, Malaysians are allowed to have access to Labuan.
“Most Malaysians do not understand what Labuan does, for one they had to get special permission from the Ministry of Finance to be able to access the services, “The other thing is all the transactions in Labuan is in non-ringgit and it involves businesses of the outside world. The difference from other offshore centres is that we are a mid-shore centre,” he said.