Labuan Offshore Financial Center

  • Banking activities carried out in one country but denominated in foreign currencies
  • Outside of regulations
  • Free from restrictions of domestic reserve requirements and monetary controls
  • Little or no tax

Purpose of Tax Havens

  1. Tax reduction/avoidance
  2. Privacy and confidentiality
  3. Tax planning
  4. Lower cost of living

Advantages of Offshore Centers

  1. Relatively low tax rates
  2. No tax on income
  3. Strict law on secrecy
  4. No currency exchange controls
  5. Professional advisers
  6. Flexible, less complex and less regulated jurisdictions
  7. Efficient transport
  8. Good communications


  1. Complement an on-shore financial system
  2. To strengthen the financial sector
  3. To enhance the attractiveness of Malaysia as an investment center
  4. To promote economic development

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