Labuan International Business and Financial Centre not spared
Published on: Friday, September 09, 2022
By: Bernama
“From banking, capital markets to insurance and investment management to commercial real estate, financial services firms are facing a pivotal, no-turning-back opportunity to shape theirs and the industry’s future,” Nik Mohamed Din said.
LABUAN: Labuan International Business and Financial Centre (Labuan IBFC) is not spared from the economic debilitating impact.Labuan Financial Services Authority (Labuan FSA) Director-General Nik Mohamed Din Nik Musa said while Labuan IBFC contributed more than 60 per cent to Labuan’s gross domestic product (GDP) in 2021, there is concern about the closure of companies and licensed entities due to the adverse impact of movement restrictions that began in March 2020.
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“Understandably, they had to shut down due to internal restructuring and also the tax policy change.
“I’m glad to reiterate that the exclusion of OTEs or Other Trading Entities from the Labuan tax compliance regime has been resolved late last year and now they are taxed under the three per cent tax regime,” he said in his speech on “Evolving and Impacting the Post-Pandemic World: Future Development in Financial Sector” on the second day of the 24th Malaysian Finance Association International Conference 2022 at Dorsett Grand Hotel, here, Thursday.
He said with more tax certainty and upliftment of restrictions, (it is observed since the beginning of this year), the trend of such closure is slowing down, while new incorporations of companies and new licences granted, especially to digital players providing digital platforms and issuing tokens, are rising more than the previous years.
“August 2022 figures show that new trading companies and licences have surpassed the number of closures of trading companies, but we are not out of the woods just yet.
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“As we enter this next phase of the recovery, the future is unfolding… financial services institutions are operating in a changing world, one they can help to define.
“From banking, capital markets to insurance and investment management to commercial real estate, financial services firms are facing a pivotal, no-turning-back opportunity to shape theirs and the industry’s future,” Nik Mohamed Din said.
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He said across sectors, financial institutions need to overcome challenges and scale new heights by innovating, transforming, rethinking the workplace, as well as connecting to the community in order to be continuously relevant in the new norms.
Nik Mohamed Din said it was timely for businesses to think beyond traditional bottom-line metrics and develop strategies that serve both business and societal needs.
“There’s never been a better time to change for the better… the pandemic has accelerated digital adoption and prompted financial institutions to question the sustainability of existing business models.
“At the same time, emerging technopreneurs into financial business space became a disruptive force to challenge the status quo where conventional financial business used to hold dominance.
“Now, everywhere around us, you may find the trail of financial innovation in every new trend –blockchains, cloud storage, tokenisation, data analytics and artificial intelligence are among the many advancements brought about by digitalisation,” he said.
He said it was obvious that the financial services sector is relying more and more on digital technology to gain a distinctive competitive edge.
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