Labuan is located off the coast of Borneo and comprises one main island and six smaller islets. In 1846 the Sultan of Brunei ceded it to the British who, in 1849, officially declared Labuan a colony of the British Empire and renamed it Victoria . It remained under British rule, save for a brief period of Japanese Occupation during World War II, until 1963 after which it joined Malaysia. On April 16th 1984 , Labuan was declared a Federal Territory of Malaysia and in 1990 was subsequently declared an International Offshore Financial Center (IOFC).
Since it's inception as an IOFC, Labuan has achieved substantial growth and international recognition. In 1996 Labuan Offshore Financial Services Authority (LOFSA) was established and acts as a one-stop regulatory body thus allowing easy and simple business dealing with the Government. Investment Guarantee Agreements have been signed between Malaysia and more than 60 countries, providing additional protection against nationalization of investment undertaken in Labuan .
By December 31st 2003, over 4,065 offshore companies had been registered in Labuan, with 54 offshore banks including the top 30 banks in the world having offices on location. Industries such as insurance, legal and accounting have also established their offices in Labuan with the United Kingdom, France, Switzerland, the United States, Canada, Taiwan, Hong Kong and Australia commanding a presence.
Labuan is a free duty port where no sales tax, surtax, excise or import/export duties are levied. It is free from exchange control regulations when dealing with non residents and has Double Tax Agreements (DTA) with over 50 countries. It is readily accessible to all international destinations through flights from Kuala Lumpur , Kota Kinabalu and Brunei and has become a major tourist destination.