Labuan IBFC banks on broader financial ecosystem

KUALA LUMPUR: Labuan International Business and Financial Centre (Labuan IBFC) is looking to strengthen its position as an international financial hub by expanding its interconnected financial services, with Islamic finance and digital solutions emerging as key growth drivers.

The strategy comes amid growing interest from Middle Eastern institutions, family offices and investors seeking syariah-compliant structures for wealth preservation and investment.

Labuan IBFC Inc Sdn Bhd chief executive officer Ben Quah said the centre’s mid-shore proposition combines operational flexibility with strong governance, helping it attract businesses seeking an established international financial jurisdiction.

Labuan Financial Services Authority (Labuan FSA), the centre’s single statutory regulator, benchmarks its framework against international standards, including those of the Financial Action Task Force and the Organisation for Economic Co-operation and Development.

It has also updated guidelines governing digital money broking platforms to strengthen governance, internal controls, operational resilience and risk management.

“The message to the industry is simple: innovate, but innovate responsibly,” Labuan FSA director-general Affendi Rashdi said when announcing the update.

Quah said economic substance requirements, which require businesses to demonstrate an actual operating presence in the jurisdiction, help protect Labuan IBFC’s reputation and attract genuine business activity.

The centre is also seeking to encourage businesses to use multiple services across its banking, wealth management, insurance, digital financial services and Islamic finance segments.