In 2009, the OECD’s Global Forum on Transparency and Exchange of Information issued a report on the implementation of the international tax standard for the exchange of information (EOI)[1] that categorised Labuan as a jurisdiction that was ‘not committed to the internationally agreed tax standard’.

The Labuan Financial Services Authority subsequently reaffirmed its commitment to the international standard for EOI and to cooperating with other competent tax authorities to combat tax evasion and financial crimes.

Playing catch‑up

Over the years, the Malaysian government has taken steps to overhaul the legal and tax systems in Labuan to bring them in line with international standards.

On 9 June 2022, the Labuan Companies Act 1990 was amended via the Labuan Companies (Amendment) Act 2022 (the Act) to establish a formal beneficial ownership reporting regime for Labuan companies. Consistent with other jurisdictions, Labuan companies are now mandated to take steps to identify, keep records of and report on their beneficial owners. This reform brings Labuan’s corporate compliance regime on par with the Financial Action Task Force’s (the FATF’s) Recommendations and is reflected in Malaysia’s recognition by the FATF as a jurisdiction with robust policies to combat money laundering and terrorist financing.[2]