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Welcome Remarks by Mr Danial Mah Abdullah, Director-General of Labuan FSA at Business & Career Opportunities at Wawasan Open University Penang

Speeches

Business & Career Opportunities

21st September 2019
Wawasan Open University, Penang

Welcome Remarks by

Mr Danial Mah Abdullah
Director-General, Labuan FSA


Bismillahirrahmanirrahim
Tuan Yang Terutama
Tun Dato' Seri Utama (Dr.) Haji Abdul Rahman Bin Haji Abbas
Yang di-Pertua Negeri Pulau Pinang,

Pengerusi-pengerusi Industri Labuan IBFC,
Dif-dif kehormat,
Para hadirin yang dihormati.
Assalamualaikum W.B.T and Salam Sejahtera

Bagi pihak Labuan FSA dan industri di Labuan IBFC, saya ingin merakamkan setinggi-tinggi penghargaan kepada Tuan Yang Terutama Tun Dato' Seri Utama (Dr.) Haji Abdul Rahman Bin Haji Abbas Yang di-Pertua Negeri Pulau Pinang, di atas kesudian untuk menyempurnakan majlis kita pada hari ini.

Saya juga ingin mengambil kesempatan untuk mengalu-alukan kedatangan para hadirin ke sesi taklimat mengenai 'Peluang Perniagaan dan Kerjaya’. Ini adalah julung kali acara tersebut diadakan di Pulau Pinang. Kami di Labuan FSA berasa amat besar hati kerana kerjasama erat yang wujud dan berterusan di antara pihak pengawalselia dan industri Labuan IBFC, maka program seumpama ini dapat direalisasikan dengan jayanya.

Untuk pengetahuan para hadirin, program ini telah berjaya menghimpunkan gabungan peserta dari latar belakang yang berbeza termasuklah ahli perniagaan, golongan profesional dan terutamanya pelajar-pelajar university yang bakal akan mempelopori kerjaya masing-masing.

Kita percaya sesi taklimat ini, yang akan dikongsikan oleh barisan panel penceramah yang diundang khas di kalangan pengusaha industri Labuan IBFC yang mempunyai pengalaman luas dalam kewangan antarabangsa, akan memberi manfaat kepada para hadirin dalam meneroka peluang perniagaan, produk dan perkhidmatan kewangan serta peluang-peluang kerjaya dalam industry kewangan antarabangsa.

Tuan Yang Terutama Tun,
saya mohon izin untuk meneruskan ucapan saya dalam Bahasa Inggeris.

Ladies and Gentlemen,

Today’s forum is very timely for us to share with all of you the opportunities in international business and finance and to provide participants with a better understanding of the various facets of a financial centre. For the university students who are present here today, this forum is a good opportunity for you start building your career path and to gain more knowledge in international finance and business.

Like you, I was also once a young student grappling on what to do next after varsity. And I can tell you this that in our days, we were not as fortunate as you today. We don’t have emails, google, whatsapp, social or information media to rely on for career search. We have to look in newsprint advertisements for openings. You have much easier access to lots of information. Therefore, I urge you to seize these opportunities that will be presented to you and consider on how you could carve a career in international business and finance.

Like most of you, I am from Seberang Prai side, which recently has been declared as a city. I graduated with an Accounting degree, but didn’t like entering everything twice which they called double entry, and ended up being in the regulatory line of international finance and business as the director-general of Labuan Financial Services Authority or Labuan FSA, which is the regulator for Labuan IBFC. Indeed, it would be most wonderful to see amongst you in the future to be in senior positions in regulatory roles or business captains of the financial industries.

Ladies and Gentlemen,

Today’s session is about Penang and Labuan. It is about how Penang could take advantage of and benefit from the use of Labuan in particular the international business and financial centre or IBFC. For those of you who do not know about Labuan, just like Penang, it is also an island, but located about 3 hours flight from here, near Brunei. It is much smaller than Penang island, but we have less haze there. Labuan was declared as an IBFC in 1990 to complement the domestic financial activities in Kuala Lumpur, to strengthen the contribution of the financial services sector to the country and to spur economic activities in Labuan.

Labuan IBFC is unique in many ways. Although it is part of Malaysia, the Centre is administered under a set of separate independent legislations and distinct regulations enforced by a single regulatory authority. Labuan IBFC is very much Asian-focused financial centre by playing facilitative and intermediary roles for finance, trade and investment within the region. A wide range of business structures and investment solutions are available to facilitate cross-border transactions and international business dealings. The key business sectors in the IBFC are banking, leasing, insurance and trust companies. You will be able to learn more of these businesses at the presentations later by the chairmen of the industries.

Labuan IBFC has grown from strength to strength in the 29 years that we have been in existence, and this is clearly demonstrated by the robustness of our financial centre, notwithstanding in these current challenging dynamics in global trade and investments. We are fortunate to be in the fastest growing region in the world – Asia Pacific, allowing us to grow in tandem with the region. Today Labuan IBFC is home to top-ranked financial institutions comprising 55 banks, 217 insurance companies, 61 trust companies, more than 300 leasing companies, 43 commodity trading companies and many fintech related companies that conduct digital assets and crypto-currency business. These institutions provided a strong and sound financial infrastructure for the IBFC to serve as a leading midshore international business and financial centre for the Asia Pacific region. In terms of employment, the centre employs about 6,000 people in the various business sectors.

Ladies and Gentlemen,

The requirement for transparency and the need to conform to requirements under initiatives such as Common Reporting Standard and Base Erosion of Profits Shifting is the new normal for business entities, particularly those that operate in a fiscally incentivised regime.

For Labuan IBFC, the need to conform to the international regulatory requirements has always been the key to our principles to ensure the reputation of the jurisdiction.

With the implementation of the new requirements, entities will need to show more tangible substance and presence in their operating domiciles. In the case of Labuan, substance requirements were introduced this year to entities that conduct businesses there. That means they need to have a minimum number of full time employees and operating expenditure. A major consequence of this new requirement is that there will be an increase in demand for more employees by business entities operating in Labuan.

The diversed nature of financial services in Labuan IBFC would mean that they would require a wide spectrum of talent in various fields. The various financial sectors provide wide career choices such as in banking, insurance, finance, accounting, auditing, law, tax, corporate secretarial, compliance function, and information technology, to both fresh graduates and those who have experience. As part of the efforts in enhancing talent, we work very closely with our industry players such as training programs, internship and management trainee programmes, including conducting outreach and awareness programmes such as today’s function.

Ladies and Gentlemen,

While we have escalated some regulations such as the substance requirements, we have also liberalized some operational requirements. For example, we accorded Labuan entities the flexibility to establish their marketing office anywhere in Malaysia, where previously they are only allowed to be in Kuala Lumpur and Johor Bahru. And this is one avenue how Penang would benefit from Labuan IBFC. In fact, we have just approved a bank’s application to open a marketing office in Penang to facilitate its businesses here. With the Labuan financial institutions and companies setting up offices here, this will generate more business activities and more employment opportunities for the people of Penang.

In addition, many Penang professional service providers such as lawyers and accountants are using Labuan structures to help their client’s businesses and investments. Based on our records, there are about 170 companies from Penang, have benefited from the use of companies in the Labuan IBFC for various purposes such as trading, manufacturing and investment holding. Indeed, more than half a billion worth of loans have been channelled through Labuan to Penang companies for business expansion.

There are many more advantages that could be harnessed for the benefit of Penang institutions such as captive insurance, leasing, tokenisation and wealth management. For this, I will leave it to Ms Carolyn Wong, a lawyer who is based in Penang who will later share her experience and advice in using Labuan structures, something that she has been doing for many years already for her clients.

There is certainly a lot of positive synergies between Penang and Labuan IBFC. In many of our experiences in Labuan IBFC’s overseas promotional efforts, potential investors when enquiring about suitable state or site to base their operation, the name Penang will always be mentioned as one of preferred locations. And this is manifested in the figures of foreign direct investment for the first quarter for 2019 where Penang accounted for 42 percent of Malaysia’s total FDI. Based on our recent missions to Shenzen and Guangzhou, it is likely that more investments from China will flow into Penang. And this is where Labuan can play a facilitative role for such investments into Penang, including the structuring and the financing of such investments. These are the kind of collaborations that will only bring more mutual benefits to both Penang and Labuan IBFC.

Ladies and Gentlemen,

Today’s talk on Business and Career Opportunities sets an exciting scene for the “Meeting of the Two Pearls - that is Penang the Pearl of Orient and Labuan, the Pearl of Borneo. We firmly believe this will pave the way for the two pearls to shine even more brightly in the future.

On that note, I would like to once again express our utmost appreciation to Tuan Yang Terutama Tun Dato' Seri Utama (Dr.) Haji Abdul Rahman Bin Haji Abbas Yang di-Pertua Negeri Pulau Pinang,
for gracing today’s event, and to the Wawasan Open University, in partnering with us to make today’s talk a success.

Thank you very much.

Assalamulaikum Warahmatulahi wabarakatuh,


Mr Danial Mah Abdullah
Director-General, Labuan FSA
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