What You Need To Know

Labuan , officially the Federal Territory of Labuan, is a federal territory of Malaysia. It is made up of the eponymous Labuan Island and six smaller islands, and is located off the coast of the state of Sabah in East Malaysia. Labuan’s capital is Victoria and is best known as an offshore financial centre offering international financial and business services via Labuan IBFC since 1990 as well as being an offshore support hub for deepwater oil and gas activities in the region. It is also a tourist destination for people travelling through Sabah, nearby Bruneiansand scuba divers. The name Labuan derives from the Malay word labuhan which means harbour. Labuan is often referred to as the pearl of Borneo.

Population: Estimate 97,482
Area: 91.64 km²


Malaysian ringgit


The economy of Labuan thrives on its vast oil and gas resources and international investment and banking services. Labuan is a very much an import-export oriented economy. Virtually all of its commodities including crude oil, methanol, HBI, gas, flour, animal feed, sea products and ceramic tiles are exported either to Peninsular Malaysia or overseas. Raw materials, parts and equipments for industrial uses well as consumer products are imported. In 2004, the total value of Labuan’s external trade reached MYR11.8 billion from only MYR5.0 billion in 1995 for a net trade surplus of MYR5.1 billion. Among its major trade partners are India, Peninsular Malaysia, Sarawak and South Korea. 65{3d26691c2d8abc2cd9d82fd4c77580a34c3b6a354b7abf4d76a67fcf01f8660d} of its exports are petroleum and gas-based products. The Gross Domestic Product (GDP) of Labuan is estimated at MYR3.63 billion in 2012 with a growth rate of 5.8 percent. Labuan GDP per capita in 2012 is MYR39,682. The total employment for Labuan is around 39,800 in 2012. The main economic sectors in Labuan is service and manufacturing which contributed 94.6 percent to the island GDP. The service sector consisted mainly of Finance and Insurance and Real Estate and Business Services. Meanwhile, the manufacturing sector consists mainly of oil and gas industry and support. The Labuan International Business and Financial Centre Labuan IBFC was created as Malaysia’s only offshore financial hub in 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{3d26691c2d8abc2cd9d82fd4c77580a34c3b6a354b7abf4d76a67fcf01f8660d} 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.


The official language of labuan is Malay (officially known as bahasa Malaysia).


Security is the responsibility of the federal government, with naval patrol vessels, a garrison and an air detachment based on the island. The vigilance of the local Coast Guard and Customs and Excise contribute to the maintenance of Labuan’s reputation and status as an international offshore financial centre and free trade zone.


Labuan has a tropical rainforest climate with no dry season. Over the course of a year, the temperature typically varies from 25 to 32 °C (77 to 90 °F) and is rarely below 24 °C (75 °F) or above 33 °C (91 °F). The warm season lasts from 1 April to 13 June with an average daily high temperature above 31 °C (88 °F). The hottest day of the year is 29 April, with an average high of 32 °C (90 °F) and low of 26 °C (79 °F). The cold season lasts from 7 January to 17 February with an average daily high temperature below 30 °C (86 °F). The coldest day of the year is 8 September, with an average low of 25 °C (77 °F) and high of 31 °C (88 °F). The weather station for Labuan is located at Labuan Airport. Thunderstorms are the most severe precipitation observed in Labuan during 60{3d26691c2d8abc2cd9d82fd4c77580a34c3b6a354b7abf4d76a67fcf01f8660d}of those days with precipitation. They are most likely around October, when they occur very frequently. Meanwhile, the relative humidity for Labuan typically ranges from 63{3d26691c2d8abc2cd9d82fd4c77580a34c3b6a354b7abf4d76a67fcf01f8660d} (mildly humid) to 96{3d26691c2d8abc2cd9d82fd4c77580a34c3b6a354b7abf4d76a67fcf01f8660d} (very humid) over the course of the year, rarely dropping below 53{3d26691c2d8abc2cd9d82fd4c77580a34c3b6a354b7abf4d76a67fcf01f8660d} and reaching as high as 100{3d26691c2d8abc2cd9d82fd4c77580a34c3b6a354b7abf4d76a67fcf01f8660d} (extremely humid).[