LABUAN: The growing number of trust companies operating in the Labuan International Business and Financial Centre (Labuan IBFC), currently at 61, is a reflection of confidence and trust in the jurisdiction, says the Association of Labuan Trust Companies (ALTC).
Its chairman Datuk Chin Chee Kee said Labuan IBFC has implemented international standards and norms such as Anti-Money Laundering Act (AMLA) legislation, Base Erosion and Profit Shifting (BEPS), Common Reporting Standards (CRS) and economic substance requirements.
“Because of this implementation, industry players have a good impression of Labuan as an international business financial centre,” he told Bernama in conjunction with the 30th Anniversary of Labuan IBFC today.
He said this had led to more people coming to Labuan to set up business, bringing along with them a number of trust companies.
“I think this is good for prospects, and recognition that Labuan is a premier mid-shore centre for the Asia Pacific region,” he said.
He said despite a little hiccup over some uncertainty in the economic substance requirement regulations when they were enforced in 2019, the jurisdiction is now ready to move on after things started to get clearer.
“I think it is now slowly being cleared up, and with the certainty that we have in Labuan, I think business will be good from now on,” he said.
Chin said Labuan is also the only jurisdiction in the Asia Pacific region with preferential tax and in compliance with all international standards.
“Now, with this type of certainty, the businessmen can come in and know what they want.
“As long as they want to set up a Labuan company under the prescribed 23 categories of the economic substance requirements, I think they only pay three per cent tax or nothing at all if you’re carrying on investment holding activities.
“I think this is still very attractive, and it’s more attractive than Singapore or even Hong Kong. With Hong Kong facing a little bit of problems here and there, I think people will start looking at Labuan more and I’m very positive about that,” he said.
On the Covid-19 movement restrictions, he said most of the established trust companies have initiated a business continuity plan under which their information technology infrastructure allows them to move staff from the office back to their house and to work from home.
“This has not interrupted the operations of the trust companies, as most of the established trust companies continue to service their clients,” he said.
He said moving forward, all trust companies should have this type of business continuity plan whereby the staff can work from home via their computer.
“Of course, the economic substance requirements require us to have meetings and management control in Labuan but those (meetings) are only possible once or two times a year while the rest of the time, the Labuan companies can still be operated and the board of directors’ meetings can still be held via Zoom, Teams and so on,” he said.
Chin said Covid-19 has tested the industry players in their business transactions online and running business as usual with the infrastructures in place.
He also suggested that the Labuan Financial Services Authority improve the information technology infrastructure to enable it to accept soft copies of all documents and possibly implement digital signatures.
“As Malaysia already has a Digital Signature Act, we should make full use of it in our type of business,” he added.