ASIA’S MIDSHORE INTERNATIONAL BUSINESS AND FINANCIAL

CENTRE

2

Where is Labuan Island?

▪ Federal Territory under the Federal Government▪ Off the coast of Sabah, East Malaysia, in the center of Asia▪ Easy access from Kuala Lumpur and Kota Kinabalu▪ About 100,000 population

Logistics

MAINECONOMIC DRIVERS

Oil & Gas

Tourism

International Business

& Financial Centre

Retail Trading

Manila

Japan

ChinaKorea

Taiwan

Hong Kong

Thailand

Kuala LumpurSingapore

Jakarta

Strategically Located

Labuan IBFC… 30 Years of Intermediating Asia

OUR VISIONTo be Asia’s leading midshore international business and financial centre

Striking an ideal balance between client confidentiality and international best standards

> 70% of Labuan Companies are Asian-based

• International business and financialcentre since 1990, intermediating hub fortrade, risk and assets in Asia.

• A tax-efficient substance enablingjurisdiction to facilitate businesses,trading, investments through financialservices and legal structures.

• Well-balanced legal and regulatoryframework, proportionality in Regulatorystance.

Internationally RecognisedComprehensive Suite of Legislation

Labuan IBFC Adheres to International Standards and Best Practices

Labuan Financial Services

Authority Act

Labuan Financial

Services and Securities

Act

Labuan Islamic

Financial Services And

Securities Act

Labuan Business

Activity Tax Act

Labuan Companies

Act

Labuan Foundations

Act

Labuan Trusts Act

Labuan Limited Partnerships and Limited

Liability Partnerships Act

A Full Ecosystem of Solutions

5Available in conventional, digital and Shariah-compliant forms

Home to International Financial Brands

Tax Structure and Other Benefits

Labuan Business Activities

• Trading income at 3% of net audited profit

• Non-trading income – zero tax

• Substance Requirement

• Option to elect for domestic tax rate @ 24%

Taxed under Labuan Business Activity Tax Act 1990

• No withholding tax on dividends, interest, royalties, service fees and lease payments to non-residents

• No stamp duty

• Access to Malaysia’s 70+ double taxation agreements

Access to Malaysia’s Double Taxation Agreement Network

ALBANIA ARGENTINA AUSTRALIA AUSTRIA BAHRAIN BANGLADESH BELGIUM

CROATIA

IRAN IRELAND ITALY JAPAN JORDAN KAZAKHSTAN KOREA KUWAIT KYRGYZ LAOS LEBANON LUXEMBOURG

MALTA MAURITIUS MONGOLIA MOROCCO MYANMAR NAMIBIA NETHERLANDS

POLAND QATAR ROMANIA RUSSIA

BOSNIA HERZEGOVINA

BRUNEI CANADA CHILE CHINA

DENMARK EGYPT FIJI FINLAND FRANCE GERMANY HONG KONG HUNGARY INDIA INDONESIACZECHREPUBLIC

NEW ZEALAND

NORWAY PAKISTAN PAPUA NEWGUINEA

PHILIPPINES

SANMARINO

SAUDIARABIA

SEYCHELLES SINGAPORE SOUTHAFRICA

SPAIN SRI LANKA SUDAN

SWEDEN SWITZERLAND SYRIA THAILAND TURKEY TURKMENISTAN UAE UK USA UZBEKISTAN VENEZUELA VIETNAM

Why Labuan IBFC for Digital Entities?

9

• The ethos of Digital Labuan is that there are no ‘sandboxes’; instead existing ‘legacy’ licences areused to facilitate digital players via the concept of a ‘digital wrapper’.

• A ‘digital wrapper’ or a digital business plan simply means the element of technology that will beutilised is embedded into the business plan of each proposed licensed entity and the Regulatorwill assess each applicant based on merit.

• It is worth noting that licences may be combined to achieve the operational objectives of apotential digital licence holder. For example, the digital currency trading platform coupled withthe digital token/asset issuance licence provide an entity to not only issue tokens but also createa cryptocurrency exchange to trade these tokens.

• Labuan IBFC licensed its first fintech-related entity in 2017. Since then, the jurisdiction haslicensed crypto currency trading platforms, e-wallets, STOs, insurtech, robo-advisory, etc.

• Labuan Financial Services Authority (Labuan FSA) being the Regulator, a statutory body under theMinistry of Finance Malaysia, encourages the adoption of alternative financial entities/innovativefinancial services and licenses entities in this space including Asia’s first digital securitiesexchange.

Why Labuan IBFC for Digital Entities?

10

• Labuan IBFC has a ready ‘tool box’ for blockchain, cryptocurrencies and fintech-related entitiesnamely via money broking licence, credit token licence, securities dealer licence, payment portalapproval, private fund management licence, etc. All these entities are officially licensed andregulated by Labuan FSA.

• A collaborative and facilitative approach by Labuan FSA ensures the option of a pre-submissionconsultation and discussion directly with the Regulator. Once the licence application is submitted,the licensee’s commercial proposition is expected to be articulated and an understanding of thedigital element in the operations should be clearly defined.

• This industry-friendly bespoke approach coupled with Labuan IBFC’s tax, legal and currencyneutrality and ideal location in the centre of Asia as well as cost efficiencies create an ideal base forborderless digital entities.

‘Pick and Mix’ Digital Tool Box

11

12

Example 1: Labuan Digital Bank

Fund Management

Licence

Investment Banking Licence

• Allow non-bank applicants.• Can undertake all banking

activities except deposit-taking.

• Discretionary mandate.• Non-discretionary

mandate.

Commercial Banks Business arrangement with commercial banks, to access corresponding banking network, SWIFT

Fund Structure

• Client funds held in escrow.

• Funds pooled via a private fund.

Labuan Digital Bank

Example 2: Crypto Exchange With Token Issuance

13

Money Broking Licence

Credit Token Licence

• Allows token issuance.

• Only for asset-backed tokens. No ICO.

• Allow the creation of a crypto/token exchange.

• Tokens issued are listed on the platform for trade.

• Clearing and settlement.

Labuan Crypto Exchange

e-Payment System

Approval

• Allow the creation of e-wallets to facilitate investor trading accounts.

• Fungibility allowed.

2019 Digital Highlights

• Majority were licensed to provide crypto/tokentrading platforms and e-payment systems.

• 28 licences were approved for digital financialservice businesses.

• 3 new licences were issued for STO.

• 7 new e-payment systems were approved.

• Approved Asia’s first digital asset exchange forprimary listing of digital securities, listing ofalternative assets and secondary market tradingand settlement of digital assets.

• To date, 2 digital exchanges have been approved,i.e. Fusang Exchange and GSX Exchange.

14

Why Labuan IBFC?

• Labuan Companies are accepted for listing on:(i) Hong Kong Stock Exchange(ii) NASDAQ Dubai(iii) National Stock Exchange of Australia(iv) Singapore Exchange

• Existing structures/licences facilitate digital, fintech and blockchain formations

• Developed and updated legal framework; a well-regulated Common Law jurisdiction

• English speaking talent

• Currency neutrality – operations can be in any currency supported by your bankers

• Tax efficiency, flexibility and access to Malaysia’s DTAs

• Cost-effective, substance-enabling jurisdiction with tax certainty

• Professional expertise and services available from Labuan, Kuala Lumpur and Singapore

• Ease of accessibility from anywhere in Asia

• Similar time zone and centrally located in Asia

Thank YouThank You

Disclaimer

This presentation should not be regarded as offering a complete explanation of the mattersreferred to and is subject to changes in law. It is not intended to be a substitute for detailedresearch or the exercise of professional judgment. Labuan IBFC cannot accept any responsibilityfor loss occasional to any person acting or refraining from action as a result of any material in thispresentation. The republication, reproduction or commercial use of any part of this presentationin any manner whatsoever, including electronically, without the prior written permission fromLabuan IBFC Inc. is strictly prohibited.

LABUAN IBFC INC SDN BHD IS THE OFFICIAL AGENCY ESTABLISHED BYGOVERNMENT OF MALAYSIA TOPOSITION LABUAN IBFC AS THE PREFERRED INTERNATIONAL BUSINESS AND FINANCIAL CENTRE IN ASIA PACIFIC