danial mah abdullah director, lofsa … as an international offshore financial centre danial mah...
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1http://www.lofsa.gov.my
LabuanLabuan As an International Offshore Financial CentreAs an International Offshore Financial Centre
DANIAL MAH ABDULLAHDANIAL MAH ABDULLAHDIRECTOR, LOFSADIRECTOR, LOFSA
2http://www.lofsa.gov.my
Location – Proximity to key Asian capitals
MALAYSIA
SOUTHSOUTHCHINACHINASEASEA
Labuan
East Malaysia
INDONESIINDONESIAA
JAPANJAPAN
SOUTHSOUTHKOREAKOREA
Hong Hong KONGKONG
TAIWANTAIWANCHINACHINA
INDIAINDIA
AUSTRALIAAUSTRALIA
West CoastSabah
3http://www.lofsa.gov.my
History
•Labuan is not a sovereign state
•Part of Sabah
•Declared as F.T. on 16 April 1984
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Labuan IOFC
Established as an IOFC by the Malaysian Government in 1990Objectives
Complement Kuala Lumpur to turn Malaysia into a regional financial centrePromote the economic development of Labuan and its vicinity
5http://www.lofsa.gov.my
Offshore Jurisdictions
Western Samoa
Vanuatu
Nauru
Cook Island
Western Samoa
Vanuatu
Nauru
Marshall Islands
Hong Kong
Singapore
Seychelles
Mauritius
Oman
Bahrain
Israel
Cyprus
Austria
Liechtenstein
Netherlands
Luxembourg
Isle of ManIrish RepublicIreland
Jersey
Alderney
Switzerland
Andorra
Gibraltar
Madeira
Canary Is.
Liberia
Monaco
Malta
Jordan
British Virgin Is.AnguillaSt. KittsNevisSt. Vincent & GrenadinesBarbados
Uruguay
Belize
Aruba
Bahamas
Berda
Turks & Caicos Is.
Cayman Is.
Costa Rica
Panama
Antilles
Dublin
Antigua
Labuan
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Ministry of Finance
OffshoreDomestic
BNM SC LOFSA
BankingInsuranceCapital MarketsRegistrar
BankingInsurance
Capital Markets
R O C
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Labuan Offshore Financial Services Authority (LOFSA)
Established on 15 February 1996 Responsible for:
developing national objectives, policies and sets prioritiesdeveloping and promoting offshore business in Labuanadministering and enforcing legislationsincorporating and registering companies
9http://www.lofsa.gov.my
LOFSA
Prior to LOFSA, offshore activities managed and supervised by government agencies –
BNM - Banking & insurance
SC - Management of fund related activities
ROC - Registration of offshore companies/ trust companies
IRB - Tax
MIDA - Promotions
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Mission Statement
LOFSA shall act as a one-stop agency to realize the Government’s vision to develop Labuan as a premier IOFC by ensuring the highest level of integrity, commitment and professionalism
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Organisation Chart
MINISTER OF FINANCE
MEMBERS OF AUTHORITY
DIRECTOR-GENERAL
RESEARCH &STRATEGIC PLANNING
DEPARTMENT
CORPORATE SERVICES
DEPARTMENT
REGULATION DEPARTMENT
LEGAL &COMPLIANCEDEPARTMENT
CORPORATE AFFAIRS
DEPARTMENT
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CHARACTERISTICS OF LABUAN IOFCCHARACTERISTICS OF LABUAN IOFC
INDEPENDENT LEGAL FRAMEWORK
INTEGRATED OFFSHORE FINANCIAL SERVICES
OFFERS BOTH CONVENTIONAL AND ISLAMIC PRODUCTS
MOSTLY NON-RINGGIT BUSINESS, RINGGIT?
DEALS MAINLY WITH NON-RESIDENTS
EXCHANGE CONTROL FOR DEALINGS WITH RESIDENTS
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Regulatory Framework
Offshore Companies Act 1990Labuan Trust Companies Act 1990Offshore Banking Act 1990Offshore Insurance Act 1990Labuan Offshore Business Activity Tax Act 1990Labuan Offshore Financial Services Authority Act 1996Labuan Offshore Trust Act 1996Labuan Offshore Limited Partnerships Act 1997Labuan Offshore Securities Industry Act 1998
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Business in Labuan
BankingOBA
BankingOBA
SecuritiesLOSIA
SecuritiesLOSIA
Trust CoLTCA
Trust CoLTCA
Purpose VehiclesOCA, LOLPA,
LOTA
Purpose VehiclesOCA, LOLPA,
LOTAInsurance
OIAInsurance
OIA
CompaniesLimited PartnershipTrusts
LifeGeneralBrokersManagerUnderwritersCaptivesRe-insurer
CommercialInvestmentCreditsDepositsCustodialTransfers
Trust ComTrusteesSecretarial & Accounting
LFX
Funds Mgmt.
Islamic Element
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Business in Labuan
Offshore CompaniesInvestment holdingsTrading
BankingCredit facilitiesInternational trade financeAdvisory servicesCapital market activities
Capital marketIssuances
InsuranceReinsuranceCaptive insuranceTakaful
LeasingOperational leaseFinancial lease
Fund Management Overseas investments
Tax planningIslamic FinanceInternational Shipping Registry (ISR)
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Progress of Labuan IOFC
40
20
3,842
14
45
107
56
As at 31 July 2003
39
18
3,426
12
34
100
54
2002
32
20
1,748
3
6
35
62
1998
17Trust Companies
873Other Trading & Non-Trading Companies
25Auditors and Liquidators
3Fund Managers
-Leasing
9Insurance & Insurance Related
52Banking
1996Year
Activities
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Banks By Origin of Country
Malaysia (14)
Japan (4)UK (5)Belgium (1)Canada (1)
Aust (4)
France (6)
USA (4)
Germany (4)S'pore (3)
Swiss (2)Nederland (2)
Hong Kong (2)S Arabia (2) Taiwan (2)
15 CountriesJuly 03Loan 9.3bDep 3.4 b
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Insurance Companies by Country of Origin
Malaysia (29)
Australia (6)Bermuda (5)
S'pore (7)Sweden (5)
BVI (5)
UK (18)USA (4) Japan (4)
Denmark (2)
H Kong (6)
Ireland (2)
Indo (2)
Others (7)France (2)
Germany (3)
22 Countries ReinsuranceDec 02: 253m
20http://www.lofsa.gov.my
Labuan International Financial Exchange (LFX)
Launched in Nov 2000
Listing and trading of wide range of financial instruments
Window for foreign investment
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LabuanLabuan International Financial Exchange (LFX)International Financial Exchange (LFX)Progress for LFX Progress for LFX ……
2001 2002 2003(Aug)
Total No. of Listings
1
10
12
2001 2002 2003(Aug)
Market Capitalisation(US Billion)
250 m
1.654
1.920
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LFX - listings today
Serial Islamic Lease Sukuk - First Global Sukuk Inc. (2004)Serial Islamic Lease Sukuk - First Global Sukuk Inc. (2006)Sukuk Al-Ijarah Trust Certificates - Malaysia Global Sukuk Inc. (2007)
SyariahCompliant Instruments
Debt Instruments
Floating Rate Notes - 1st Silicon (Labuan) Inc. (2008)Guaranteed Exchangeable Bonds - TNB Capital (Labuan) Ltd. (2007)RHB BOND - Rashid Hussein Berhad (2007)
Mutual Funds
IDB European Bond Class BIDB Multi-Manager Asia Ex-JapanIDB Multi-Manager Balanced AIDB Multi-Manager Equity AInsinger De Beaufort Zeus (OS)Am-Macquarie Sovereign Plus Fund
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On Par With Best Practices
Member of Offshore Group of Banking Supervisors Member of Offshore Group of Insurance SupervisorsMember of International Association of Insurance SupervisorsAsia-Pacific Group on Anti-Money LaunderingIOSCO
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A more significant Islamic banking and takaful industry with greater global orientation, and Malaysia/Labuan as regional Islamic financial centre
Domestic Regional International
IIFMAdvisoryBodies
LegislationPlayers
Business, ProductsRe/takaful
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INTERNATIONAL ISLAMIC FINANCIAL DEVELOPMENTS(IIFM)
The International Islamic Financial Market (IIFM)…The International Islamic Financial Market (IIFM)…
Money and capital Money and capital marketsmarkets
ShariahShariahcompliantcompliant
ProductsProducts Match assets Match assets and liabilitiesand liabilities
Improve Improve cooperative cooperative frameworkframework
IIFMIIFM
LiquidityLiquidity
Serves to enhance liquidity on the global front …
28http://www.lofsa.gov.my
Labuan IOFC – Islamic FinanceIslamic Finance
2001 2002 2003(June)
Offshore Banks - Islamic Assets (US Million)
376.9
465.4
500.9
•• LabuanLabuan IOFC IOFC offers dual banking offers dual banking facilityfacility
•• 2 2 Islamic Banks and 3 Islamic Banks and 3 Islamic InvestmentIslamic InvestmentBanksBanks
Issue of worldIssue of world’’s first:s first:
•• USD600 millionUSD600 millionIslamic sovereign Islamic sovereign SukukSukuk
•• ShariahShariah--compliant compliant international international investmentinvestment-- linked linked takafultakaful productproduct
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INTERNATIONAL ISLAMIC FINANCIAL DEVELOPMENTS(MALAYSIA ISLAMIC GLOBAL BOND)
Issuance of the First Sovereign Global Islamic Bond… Issuance of the First Sovereign Global Islamic Bond…
Federal Land Commissioner SPV
Government
Trust Certificate
IssueFederal Land
Commissioner
30http://www.lofsa.gov.my
GLOBAL RECOGNITION
Best Asian Sovereign Bond of Year 2002 Best Asian Sovereign Bond of Year 2002 -- EuromoneyEuromoney
Deal of the Year 2002 Deal of the Year 2002 –– Institutional InvestorInstitutional Investor
Most Innovative Capital Market Transaction 2002 Most Innovative Capital Market Transaction 2002 –– Finance AsiaFinance Asia
Most Innovative Bond Deal 2002 Most Innovative Bond Deal 2002 AsiamoneyAsiamoney
Best Structured Islamic Financial Instrument Best Structured Islamic Financial Instrument –– Islamic BankerIslamic Banker
Most Innovative Bond Issue Most Innovative Bond Issue –– The AssetThe Asset