Labuan’s laws and regulations are robust, pragmatic and transparent, adhering to all international laws and standards (it is on the Organisation for Economic Cooperation and Development’s (OECD) ‘white list’) and is a member of several multilateral organisations focused on the development and regulation of international financial centres.
Where new regulations do come, Labuan often seeks a business-friendly approach. For instance, following increased substance requirements, many offshore jurisdictions have imposed requirements, even on licensed entities. Labuan, while still adhering to international rules, has taken a more flexible approach by allowing an alternative, which is to be taxed under the ordinary domestic Income Tax Act (ITA). The ITA does not provide for any substance requirements , however the tax rates are usually higher.