Labuan IBFC secures 50% of all Captive Formations in Asia in 2018

  • Driving Captive Transformation in Asia” White Paper by Captive Review indicates 50% of all new captive incorporations in Asia are from Labuan IBFC
  • 81% of respondents cited regulatory environment as the most important factor in choosing a domicile
  • 76% of respondents felt that cell captives are suitable for Asian risk management requirements

Kuala Lumpur, 5 November 2019 – Labuan International Business and Financial Centre’s (Labuan IBFC) position as a market leader in captive insurance is reinforced by the findings of a white paper by Captive Review titled “Driving Captive Transformation in Asia”, which showed the jurisdiction having led by fifty percent in captive formations in Asia last year.

According to the white paper, the total number of captives in Asia grew by ten with Labuan IBFC leading the way with half of these incorporations domiciled in the jurisdiction. Singapore came in second with three formations compared to Labuan IBFC’s five.

The paper also revealed 81% of respondents cited regulatory environment as the most important factor in choosing a domicile, which puts the midshore jurisdiction of Labuan IBFC in good stead. Well-supported by a robust, modern and internationally-recognised legal framework enforced by its regulator, Labuan Financial Services Authority, the jurisdiction strikes an ideal balance between regulatory requirements, compliance with international best standards and practices.

Labuan IBFC is home to close to 200 insurance and insurance related licensed entities, providing an ideal ecosystem for captive formation as well as management, while the strong banking and corporate services industry provides for a seamless one stop jurisdiction for captive insurance entities.

“As a midshore wholesale financial intermediation centre, focused on delivering solutions to the Asian marketplace, we are in good stead to continue our leadership in this space, especially as the requirements of economic substance demand Asian captive owners seek a well-regulated, cost efficient and facilitative jurisdiction,” said Labuan IBFC CEO, Farah Jaafar-Crossby.

“In fact as of mid-2019, Labuan IBFC already registered six captive formations, compared to the five registered for the whole of 2018, reinforcing the study’s findings, which not only indicated an overall growth in understanding the role of captives but the jurisdiction’s ability to continue to attract these risk management vehicles,” Jaafar-Crossby added.

Fraser Irving, editor of Captive Review, said “Often tipped as the next area of opportunity for captive insurance, Asia has shown steady long-term growth over a number of years. While there is yet to be the ‘boom’ spoken about by various commentators, the industry is becoming increasingly sophisticated in the region and is definitely here to stay.”

The steady overall year-on-year upward trend in Asian captive adoption depicts enhanced maturity and sophistication, demonstrated in the findings indicating 52% of respondents having heard of protected cell companies (PCCs), while 76% of respondents felt that cell captives are suitable for Asian risk management requirements.

“The fact that Labuan IBFC is still the only jurisdiction in Asia with the Protected Cell Company structure is definitely encouraging. In fact, in 2019, we have seen a significant pipeline interest in PCCs which we attribute to enhanced awareness of its benefits as well as overall cost sensitivities arising from the global need for substance creation, whilst in a well-regulated jurisdiction,” Jaafar-Crossby noted.

The white paper entitled “Driving Captive Transformation in Asia”, based on a survey and insights from global captive practitioners carried out in 2018, was shared with regional risk management practitioners at the PARIMA Conference 2019, held in Kuala Lumpur and is downloadable via www.labuanibfc.com.

Labuan IBFC was also awarded the best Asian Domicile category at the recent Asia Captive Review Awards 2019. The Awards recognise and reward service providers, captive owners, jurisdictions and risk management professionals for their exceptional achievements in captive insurance. It is a part of a global series of awards which are also held in Europe and America.

Media Contacts

Labuan IBFC

Rowena Wong
Tel: +603 2773 8984
Mobile: +6013 677 2466
Email: rowena@libfc.com


ABOUT LABUAN IBFC
ASIA PACIFIC’S MIDSHORE INTERNATIONAL BUSINESS AND FINANCIAL CENTRE

Labuan International Business and Financial Centre (Labuan IBFC), Malaysia, through its internationally recognised yet business-friendly legal framework, is the preferred international business and financial centre in the Asia Pacific region.

It offers global investors and businesses the benefits of being in a well-regulated jurisdiction, while providing for fiscal neutrality and certainty, in addition to being an ideal location for substance creation.

Labuan IBFC boasts a wide range of business structures and investment solutions catered to cross-border transactions and international business dealings. It offers services and solutions in niches such as asset leasing, risk management, commodity trading, wealth management, international business companies and Islamic financial services to global businesses looking at penetrating Asia and Asian entities aiming to go global.

Labuan IBFC operates within clear and comprehensive legal provisions, guidelines and practice notes, enforced by a single regulator, Labuan Financial Services Authority.

To keep up with everything about Labuan IBFC, follow Twitter or Facebook @LabuanIBFC. Alternatively, visit www.labuanibfc.com

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