Why is Labuan a Federal Territory?

Why is Labuan a Federal Territory?

Labuan then on 15 July 1946 joined the North Borneo Crown Colony, which in turn became a part of the state of Sabah and Malaysia in 1963. In 1984, the Government of Sabah ceded Labuan to the federal government and later was admitted as a federal territory.

Is Labuan considered Malaysia?

Labuan is an offshore, Malaysian island, which has the benefit of low tax regimes while still retaining the protection of Malaysia’s laws and regulations. Considered the ‘pearl of Borneo,’ Labuan is located off the coast of the eastern Malaysian state of Sabah and borders Brunei by sea.

Is Labuan part of Sabah or Sarawak?

It consists of the Malaysian states of Sabah and Sarawak, as well as the Federal Territory of Labuan. Labuan is an island in a small archipelago near the coast of Sabah. East Malaysia lies to the east of Peninsular Malaysia (also known as West Malaysia), the part of the country on the Malay Peninsula.

What are the 3 federal territories of Malaysia?

The Federal Territories in Malaysia comprise three territories—Kuala Lumpur, Labuan, and Putrajaya—governed directly by the Federal Government of Malaysia.

Is Labuan part of Brunei?

The Crown Colony of Labuan was a British Crown colony on the northwestern shore of the island of Borneo established in 1848 after the acquisition of the island of Labuan from the Sultanate of Brunei in 1846.

What currency does Labuan use?

Malaysian ringgit
Economy and Currency The currency is the Malaysian ringgit (RM), though Labuan offshore companies do business in foreign currency, the standard currency being US dollars.

Is Labuan a tax haven?

Labuan is considered an tax haven due to its favorable tax structures for nonresidents and has become one of the preferred jurisdictions in Asia for offshore company formation since the Malaysian government made it into an international offshore financial centre with the passing of legislation in 1989.

Is Malaysia a US territory?

Malaysia is a federation of 13 states and three federal territories. These are divided between two regions, with 11 states and two federal territories on Peninsular Malaysia and the other two states and one federal territory in East Malaysia.

Is Labuan tax free?

Although Labuan is a federal territory within Malaysia, there are preferential tax treatments for companies conducting Labuan business activities, such as low fixed tax rate of 3%, withholding tax exemption on payments to non-residents, tax exemption on fees paid to non- citizen directors and so on.