Labuan: The greatest challenge faced by Labuan International Offshore Financial Centre (IOFC) is posed by emerging centres.
"While we after 15 years have developed into a dynamic, reputable international centre, other centres have not remained stagnant.
"They have also achieved progress and new measures and strategies are needed to meet market needs and changes," said Chairman of the Association of Labuan Trust Companies (ALTC) Chin Chee Kee.
"Competition could come in many forms and not merely from offshore centres. It could be from changes in international and domestic policies, natural disasters, terrorism and so on.
"Hence Labuan IOFC cannot remain complacent in carrying out its offshore business. It must continue to be competitive, proactive and flexible in overcoming challenges that lie ahead," he said.
He said the Government had been instrumental in promoting Malaysia as the ideal place for carrying out backroom processing, with its adequate knowledgeable workforce, infrastructure and low operating cost.
"Labuan should not be left out in this campaign." He added it was important that Labuan IOFC not be perceived as a "virtual jurisdiction." Chin added though much had been done for the island since it became an IOFC in 1990, there was still need for measures such as improvement of electricity supply, medical facilities and educational institutions.
Chin also urged Labuan Offshore Financial Services Authority (Lofsa) to consider implementing the Disclosure-based Regime as advocated by the Prime Minister in his 2005 Budget speech.
He said by adopting such a regime, the turn-around time for processing all approvals would be shortened and would put Labuan in a better competitive advantage compared to competitors in the region.
He also said the IOFC sector is now a very important component of the local economy. "We have about 600 over staff in the sector, making it the largest single employer on the island. If the local economy is dull, without the sector it would be even worse, so it is important that it continued to thrive and progress so that it could serve as another agent to propel the local economy."
Chin went on to say that the private sector, namely the offshore players, could also contribute to Labuan's IOFC's competitiveness by customising products that would suit the emerging Indian, Chinese and Islamic markets, using Labuan Offshore trading companies to deal in E-business/E-commerce, and promote Labuan as a reinvoicing/repackaging/transhipment centre.
"We would like to see Labuan offshore banks being more committed in providing comprehensive and advanced facilities to Labuan entities such as retail banking, trade finance, internet banking, e-commerce etc."
On the number of offshore companies Chin said about 5,000 were incorporated and out of this 2,900 were active and still in operation in Labuan.
Source: Daily Express Sabah
