Labuan IBFC – a digital financial hub

Labuan International Business and Financial Centre (Labuan IBFC) on its positioning as Malaysia's premier digital financial hub.


Labuan International Business and Financial Centre (Labuan IBFC) was established by the Malaysian government in 1990. The centre is governed by a single regulator, Labuan Financial Services Authority (Labuan FSA) which comes under the purview of Malaysia’s Ministry of Finance. Meanwhile, Labuan IBFC Incorporated Sdn Bhd (Labuan IBFC Inc.), a wholly owned subsidiary of Labuan FSA, acts as the official marketing agency for the centre. Strategically located in Asia Pacific, Labuan IBFC is well positioned to tap into one of the fastest-growing regions in the world, with the centre’s tagline being 'Asia’s premier international financial hub'.

Labuan IBFC offers a wide range of business structures and investment solutions to facilitate cross-border transactions and international business dealings carried out by global investors and businesses. Our key service areas include banking, insurance, wealth management, businesses related to the capital markets, leasing, money broking and commodity trading, with our suite of solutions available in conventional, Shariah-compliant and digital forms.

Digital financial services (DFS) in Labuan IBFC encompass a wide array of financial offerings ranging from simple e-platforms for trading fiat and digital currencies to the more complex digital asset exchanges including the issuance and subscription of RAMZ or Islamic digital tokens and fundraising for blockchain-based tokenisation. Given that the centre has positioned itself as a hub for digital innovation since 2017, the DFS sector in Labuan IBFC has continuously experienced rapid growth, recording an expansion of 22% in 2022. The Centre’s DFS community currently has 111 providers. 

In Labuan IBFC, the digital ecosystem comprises three main pillars: 

  1. Digital financial institutions – digital banks and insurtech providers
  2. Digital service providers – digital tokens and asset issuance, digital currency trading platforms, digital asset management and digital securities dealers
  3. Digital platforms – payment portals and digital securities exchanges
Labuan IBFC lights up at night.

To ensure a balance between business and market stability, Labuan FSA recognises the importance of protecting DFS operators from cyber threats and disruptions. As such, the Digital Governance Framework guidelines were developed by Labuan FSA in response to rising cyber threats brought on by increased digital and virtual transactions, and it lays out the minimum regulatory requirements for good governance and cyber risk management. The AML/CFT regulations have been further enhanced with mandatory requirements for DFS businesses to adopt electronic Know Your Customer for remote and paperless customer due diligence regarding virtual transactions.

As mentioned earlier, Labuan IBFC offers Shariah-compliant products and services alongside conventional and digital ranges. This is complemented by a comprehensive, omnibus Islamic legislation as well as a standalone Shariah Supervisory Council. With such robust infrastructure, Labuan IBFC aims to become a digital-conducive market with Islamic finance capabilities offering international investors Shariah-compliant structures for DFS setups. In this regard, Labuan IBFC plans to further strengthen its Islamic finance footing globally by leveraging on digital innovations and addressing Environmental, Social and Governance (ESG) issues. 

It is also worth noting that in 2022, Labuan Financial Services Authority won the e-branding award for fintech Islamic financial services from The Brandlaureate Bestbrands, months after the regulatory body launched its Islamic Digital Asset Centre (IDAC) initiative. IDAC aims to centralise and provide a safe space for all Islamic digital assets in accordance with Shariah principles. This was conceptualised with an aim of attracting Islamic fintech investors and techno-preneurs to use Labuan IBFC as a business gateway into Asia. It is a unique business proposition for investors as it enables the global community to transact digitally in a Shariah-compliant manner, as an alternative platform to the conventional digital finance landscape.

After more than three decades of operation, Labuan IBFC has evolved and grown into a dynamic and resilient financial centre. Labuan IBFC has stood strong in the face of various challenges and external shocks to emerge as Asia’s premier international financial hub. Post-pandemic, Labuan IBFC published its Strategic Roadmap 2022-2026 that highlights key objectives which include transforming the centre into a digital financial hub, further developing Labuan IBFC’s insurance sector, promoting its Islamic solutions on a global level and revitalising niche and upcoming segments. 

Labuan IBFC remains optimistic about business growth in its DFS sector, given the immense growth in the digital space due to the unrivalled convenience of conducting digital transactions and payments. The centre is confident that its digital ecosystem provides a comprehensive toolbox that makes Labuan IBFC the obvious choice as the region’s digital gatekeeper. For more information and update about Labuan IBFC, follow LinkedIn or Facebook, @LabuanIBFC or visit


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