Labuan IBFCs Shariah- Compliant Products & Solutions 8 th May - - PowerPoint PPT Presentation

LABUAN INTERNATIONAL BUSINESS AND FINANCIAL CENTRE

“Labuan IBFC’s Shariah-Compliant Products & Solutions”

8th May 2018 Aderi Adnan Director, Business Development, Labuan IBFC Inc.

Where is Labuan?

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• Off the coast of Sabah, East Malaysia
• Federal Territory
• Common time zone with major Asian cities
• Where business meets leisure

What is Labuan IBFC?

• International business and financial centre.
• A tax-efficient jurisdiction to facilitate business, trading, investments and etc,

through financial services and legal structures.

• Well-balanced legal and regulatory framework.

Our Vision To be Asia Pacific’s leading midshore international business and financial centre Striking an ideal balance between client confidentiality and international best standards

Internationally Recognised

Group of International Finance Centre Supervisors (GIFCS)

Member since 1999

International Organisation of Securities Commissions (IOSCO)

Member since 2003

Group of International Insurance Centre Supervisors (GIICS)

Member since 1999

International Association of Insurance Supervisors (IAIS)

Member since 1998

Islamic Financial Services Board (IFSB)

Member since 1998

Asia/Pacific Group on Money Laundering (APG)

Member since 2000

Labuan IBFC Adheres to OECD’s International Standards and Best Practices International Islamic Financial Market (IIFM)

Member since 2002

Connecting Asia’s Economies

70% of

Labuan Companies are Asian-based

(as at 2015)

Comprehensive Legislation

Labuan Financial Services and Securities Act 2010 Labuan Islamic Financial Services and Securities Act 2010 Labuan Foundations Act 2010 Labuan Limited Partnerships and Limited Liability Partnerships Act 2010 Labuan Business Activity Tax Act 1990 Labuan Financial Services Authority Act 1996 Labuan Trusts Act 1996 Labuan Companies Act 1990

Labuan IBFC’s Islamic Infrastructure

Labuan’s Islamic infrastructure

Double tax treaties – More than 80 nations Shariah

Supervisory Council Talent pool

Service providers

• lawyers
• accountants
• trust companies

Islamic Banks & Financial Institutions Labuan Islamic Financial Services & Securities Act

Removed points

• f friction
• tax, stamp duty

One-stop regulator Clear laws & arbitration process Founding membership

• f IFSB, IIFM

Flexible Tax Regime

Labuan Business Activity

• Trading income taxed under Labuan

Business Activity Tax Act 1990

• Non-trading income, not taxable
• Investment income, not taxable
• 3% per annum or maximum of

MYR20,000 per annum

• Tax efficiency via yearly election
• Tax certainty via statutory perpetuity
• Irrevocable election provided

Non-Labuan Business Activity

• Income taxed under Income Tax Act

1967

• Tax rate at 25%* on Malaysian

source income

• Applicable for all domestic trade

(* YA 2016)

Wide Array of Solutions

Labuan Companies

• Holding company
• Trading company
• Banking,

insurance/takaful, leasing and other licensed companies, i.e. captives

• Protected cell

companies Labuan Specialised Entities

• Company limited by

guarantee

• Limited partnership
• Limited liability

partnership

• Private trust company

Labuan Asset Protection and Wealth Management

• Trust
• Special trust
• Purpose trust
• Charitable trust
• Waqf Foundation
• Foundation
• Private funds

Available in Shariah-compliant forms Marketing offices may be located in Kuala Lumpur or Iskandar Malaysia (north of Singapore)

Business Activities

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Banking

(51)

• Wholesale banking
• Investment banking
• Loans/deposit
• Financial guarantees
• Trade finance

Leasing

(383)

Companies

(13,260)

• Investment

holding

• Trading
• Life/general
• Broking
• Captives
• Re-insurance
• Management

Insurance

(204)

• Company

incorporation

• Company

administration

• Corporate

secretarial

• Trustee services

Trust Cos.

(47)

• Aviation
• Shipping
• Heavy machinery

Wealth Management (240) Commodity Trading (50)

• Trust
• Foundations
• Private Trust Companies
• Oil and gas
• Agriculture
• Minerals

Source: Statistics from Labuan FSA’s Annual Report 2016

LIWF Structure

LABUAN INTERNATIONAL WAQF FOUNDATION

Founder (Waqif) LIWF (acts as Trustee/ Nazir/Mutawalli) Charter (Waqfiyyah) Shariah Adviser Supervisory person Council Officer Secretary

Endow assets through Waqf Distribution

• f income/

usufruct

Beneficiaries Governance and management of Waqf foundation and assets Governed by Shariah principles on Waqf

Why Labuan IBFC for Islamic Finance?

• World’s first exchangeable SUKUK listed on LFX in 2006.
• World’s first omnibus legislation (Labuan Islamic Financial Services and

Securities Act 2010).

• Commitment of Regulators both onshore (e.g. MIFC initiative) and offshore

(LFSA).

• International Financial Centre with a strong focus on Islamic Finance that

enables unique solutions and innovations – an ideal platform as the world’s Islamic Financial “Test Bed”.

• Shariah Supervisory Council for Shariah guidance and reference point.

Key Islamic Finance Numbers in Labuan IBFC

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2014 2016 Average Growth p/a Islamic Bank 3 3

• Islamic Investment Bank

2 2

• Islamic Window Operator

10 11 5.0% Full- Fledged Retakaful, Family and Takaful Operators 9 8

• Retakaful Window Operators

16 21 15.6% Islamic Notes Listed on LFX 11 12 4.5% Total Capitalisation of Islamic Notes USD7.6 bil USD8.1 bil 3.3% Total Islamic Banking Assets USD1.6 bil USD1.9 bil 9.4% Total Gross Contribution by Retakaful USD38.1 mil USD54.7 mil 21.8%

Source: Statistics from Labuan FSA’s Annual Report 2016

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For Inquiries.. Aderi Adnan aderiadnan@libfc.com +603 2773 8985

Thank You

This presentation should not be regarded as offering a complete explanation of the matters referred to and is subject to changes in law. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Labuan IBFC cannot accept any responsibility for loss occasional to any person acting

• r refraining from action as a result of any material in this presentation.