Labuan is part of Malaysia and is well located in the centre of the ASEAN region. 92 sq km in size, with a population of 75,000 (2003 est.), Labuan is mostly flat, with a good harbour and an airport served by MAS and other airlines. Labuan was used by the British as a coaling station during the 19th century, and was eventually incorporated into the Malaysian Federation. Ethnically, Labuan has a mixed Asian population; Bahasa Malaysian is the official language, but English is widely used. The climate is tropical and there are extended monsoon periods.

Labuan had a glorious history under the rule of various empires. After the demise of the Majapahit Empire in the 14th century, Labuan came under the rule of the Brunei Sultanate. The Island was ceded to the British by the Brunei Sultanate in 1846. The British then officially declared Labuan a colony of the British Empire in 1849 and renamed it Victoria. The British lost its hold over Labuan in 1942 when the Japanese Army occupied the island. The Island was renamed Maeda Island during the Japanese rule. After World War II, the British resumed control of the island until 1963 when Labuan joined Malaysia and became a part of Sabah. The Island became a Federal Territory of Malaysia in 1984. Labuan was declared an International Offshore Financial Centre in 1990.

Recognizing Labuan's strategic location and proximity to major shipping routes and offshore oil and gas fields, the Federal Government launched a long-term development program to jump-start Labuan's stagnating economy and to encourage the influx of both domestic and foreign investments.

As Malaysia's only deepwater anchorage, Labuan is a free port, a Federal Territory, and an International Offshore Financial Centre (IOFC). The currency is the Malaysian Ringgit (RM).

Labuan's GDP was estimated at RM145 million in 1991 and RM196 million in 1995, giving a per capita GDP of RM2,650 and RM3,010 respectively. In 2000, GDP per head was estimated to RM3,579. The mining sector, largely represented by oil and gas production and its related industries, is the biggest contributor to Labuan's economy, followed by the manufacturing sector, wholesale, retail, hotel and restaurants sector.

Although still not a major economic contributor, the finance sector is gaining significantly with its GDP contribution increasing from 5.7% in 1991 to nearly 10% in 2000. In the future, the manufacturing and mining sectors are expected to play a less significant role.

The Government expects Labuan to register an average GDP growth of 10.1 per cent per annum during the planning period 1995-2015. By the year 2015, Labuan's total GDP is projected to be RM1.335 million with a per capita GDP of RM9,315.

Malaysia's ambitions for Labuan to become a financial centre to challenge Singapore and Hong Kong remain unfulfilled, but the island has become a major conduit for FDI into the surrounding economies, especially Korea. It is thought that somewhere between one-third and one-half of the 2,500 companies registered on the island are somehow linked to Korea. Many Korean companies themselves have invested back into Korea through Labuan.

An investor who intends to participate in the business or industry sector will be involved with a number of activities that requires his attention when establishing and operating a business or enterprise.

In undertaking these activities, an investor will have to deal with relevant government agencies to obtain specific approvals, permits or licences in accordance with certain legal requirements in Malaysia

The purpose of this chapter is to facilitate easy reference to information required by a prospective investor, with respect to major activities involved in establishing and operating a business enterprise and types of licensing under the purview of respective agencies responsible for the processing of applications for approvals and licences. In this regard, general licensing requirements for business / enterprise and specific licensing required for a few industries such as housing industry, tourism industry, supermarket and retail businesses and freight forwarder service operations are identified.

In addition to the above, information on the incentives available to investors in the manufacturing sector, agricultural sector and tourism sector is provided. However, the list of activities, licensing requirements and incentives are not exhaustive as they are subject to changes from time to time in line with prevailing conditions and demands.

Major Activities In Establishing And Operating A Business / Industry
The major activities as illustrated in the following pages are generic to all types of business / industry. The initial stage covers activities such as registration of the company / business; feasibility study on environmental impact (for 19 prescribed activities) or on the suitability of land; and preliminary licensing under the Industrial Coordination Act 1975.

When the proposal for project is approved, the investor will proceed to initiate the project and look into activities such as acquisition of land whether industrial or non-industrial in nature; construction of building; supply of utilities such as electricity, water and telecommunication facilities.

For the operation of the business or industry, attention needs to be focussed on activities such as manpower employment which includes the workers' welfare, industrial hygiene and workers' competency; installation and operation of machines and equipment; pollution control of air, water, noise and soil; management of imports and exports (prohibited goods) and protection of intellectual and industrial property and consumers' protection.

"Malaysia: My Second Home" program is to allow poeple from all over the world, who fulfill certain criteria, to stay in Malaysia as long as possible on a social visit pass with multiple entry visa. The Social Visit Pass is initially for a period of 5 years and renewable.

Who Are Eligible To Apply?
- It is open to all citizens of countries recognized by Malaysia regardless of race, religion, gender or age.

- The applicant must prove a minimum fixed deposit of RM150,000 with any Malaysian financial institution and have a monthly offshore income equivalent to at least RM7,500 if single or RM10,000 if with spouse.

Other Conditions
- Having a reputable sponsor can be a help. However, this condition is not required if the financial background and status of the applicant satisfies the processing officer.

- To have a medical report from any recognized hospital.

- A medical health insurance valid in Malaysia.

- The successful applicant cannot seek gainful employment in Malaysia unless he possesses special expertise and obtains the permission of the Malaysian government.

Why Malaysia?
Government support
This program is initiated, organized and launched by the Malaysian Government. It is, therefore, a program, that the Government will continuously work to ensure its success.

Standard of living
Malaysia has one of the highest standards of living in the region with all the modern infrastructure and facilities in place.

Cost of Living
Cost of living is one of the lowest in Asia and will remain so for a very long time. This is achieved through the Government's efficient monitoring of the economy in ensuring that inflation is kept low at all times and thereby also the prices of goods and services.

Weather
The weather is pleasant, warm and balmy with moderate rain throughout the year.

Infrastructure
Labuan has a new airport terminal, extensive sealed roads, reliable electricity supply, clean water, state-of-the-art satellite telecommunication system, excellent sea port facilities, sports complex and an ultra modern sea sports complex that hosts some of the region's biggest sea sport events.

Political Stability
The ruling Government is the longest serving freely elected Government in the world. It is a Government representing all the races, religions, cultures etc. found in Malaysia. In fact, Malaysia is one of the most politically stable countries in the world.

Rule of Law
The rule of law is one of the fundamentals in Malaysia's constitution. Everyone is subjected to the law and also equal before the law. Malaysia practices basically the British system of justice with an independent reliable and dependable judiciary.

Religion
Islam is the official religion of Malaysia but the constitution guarantees the right of people to practise other religions.

Education
Labuan has excellent education facilities. There are 39 pre-schools, 1 international school, 14 primary schools, 7 secondary schools, 1 technical school, 1 industrial training institute, 1 Matriculation College and 1 University.

Safety
Statistics can proof that Malaysia is one of the safest countries in the world, Its crime rate is relatively low.

Culture and Language
The Malay language (Bahasa Melayu) is the national language of the country; English is the second language but other languages can be freely used and practised. Similarly the Malay culture is dominant in the country because the Malays are the dominant race in Malaysia and in the region. But other cultures can be practised very freely and there is a free intermingling of different cultures.

Food and Fruit
All the food of the world can be found here at very reasonable cost. With so many races and cultures living together in harmony, it is understandable that each race has picked up the best of each other's food and made Malaysia into Asia's Food Paradise. Similarly the tropical fruits of Malaysia are unique, exotic and available in abundance practically throughout the year. It should be a real joy to savour these fruits.

Recreational Activities
Labuan offers plenty of recreational activities, which include sport fishing, eco-diving, snorkeling, wreck diving, dingy sailing, jet skiing, sea snake watching, kayaking, proboscis monkey and horse riding.

Shopping
Most of the items that tourists normally like to buy - perfumes, cosmetics, watches, fountain pens, a long list of electronic goods, branded goods etc. are completely free of tax. Quality goods from all over the world are imported and are relatively low in price and sold throughout Malaysia.

Medical Facilities
There are adequate medical facilities on the island. Labuan's new hospital has 109 beds. Most of the time, they are only 42% full. There are 28 doctors - 13 in government service and 15 on private practive. Labuan also has the only decompression chamber in East Malaysia, which is owned and operated by the Malaysia Navy.

Residence
Foreigners are allowed to own land and properties in Labuan. The island has many beautiful mansions, bungalows, condominiums and quality houses for sale or rent at bargain prices.

To facilitate offshore activities in Labuan, a liberal immigration policy has been adopted. Multiple entry visas are issued to expatriates who have been granted employment permits to work with offshore companies in Labuan.

How To Apply?
Application can be made direct to:-

Department of Immigration, Malaysia
Block I (North), Level 4,
Damansara Town Centre
50550 Kuala Lumpur, Malaysia

- Any Malaysian Representative Offices overseas and also Tourism Malaysia Offices.

Application can also be made through agents, lawyers and others.

To be enlosed with the application are two (2) passport-size photographs of the applicant, spouse and accompanying children together with relevant supporting documents.

	Categories	Condition
A	Persons in possession of specialist or professional qualification	Form Imm. 4 (1 copy)
B	Persons in possession of a certificate from the Minister of Home Affairs certifying that their admission would be in the economic interest of Malaysia	Photostat Passport/Travel Document
C	Wives and children under six (6) years of age of persons falling within Category A or B	Photograph of applicant measuring 3.5 cm x 5.0 cm
D	Wives of citizens who have not been living separately from the husbands for a continuous period of five (5) years	Photograph of local sponsor measuring 3.5 cm x 5.0 cm
E	Children of CITIZEN under six (6) years of age	Other supporting document
F	Special compassionate grounds

Approval
Under normal circumstances, all applications that fulfill the criteria should be processed and
approved within 30 days after submission of the application.

Further Enquiries
For further enquiries regarding this program, participants can contact:-

Ministry of Culture, Arts & Tourism, Malaysia
Tourism Division
Level 33, Menara Dato' Onn
Putra World Trade Centre
45, Jalan Tun Ismail
50694 Kuala Lumpur, Malaysia
Tel: +6 03-2693 7111 / 2692 3132
Fax: +6 03-2694 1146 / 2693 2399
Website: www.mocat.gov.my

Ministry of Home Affairs, Malaysia
Block D1, Parcel D
Federal Government Administrative Centre
62546 Putrajaya, Malaysia
Tel: +6 03-8886 8000
Fax: +6 03-8889 1613

Department of Immigration, Malaysia
Block I (North), Level 4
Damansara Town Centre
50550 Kuala Lumpur, Malaysia
Tel: +6 03-253 9181 / 254 5096 / 254 5108
Fax: +6 03-252 4911 / 256 2340
Website: www.imi.gov.my

LOFSA runs the offshore sector . . . .

The Government sees Labuan's future in terms of its financial sector, and in 1990 created the Labuan Offshore Financial Services Agency alongside a batch of 'offshore' laws. Labuan offshore companies can make use of Malaysia's good double tax treaty network, and as a result the island has become the preferred conduit for FDI into a number of local countries including Korea and Malaysia itself. The 4,000 offshore companies established on Labuan include 60 banks, 50 insurance companies and a number of trust management companies. A stock exchange was established in 2000, aiming particularly at the listing of Islamic financial debt issues.

. . . and the tax regime is benign.

Malaysian taxes are moderately high, although on a territorial basis, but Labuan offshore companies pay either 3% if they trade or nil if they don't. There are many incentives and exemptions which make it possible for most mainland Malaysian profits to be repatriated through Labuan without tax. Many expatriate workers can take advantage of personal tax incentives.

LOFSA is encouraging e-commerce

LOFSA is determined that Labuan should become a successful e-commerce hub, and has built e-commerce infrastructure which can be used by incoming e-commerce operations, as well as by the island's new financial markets.