Labuan IBFC sees ‘strong momentum’ in 2025
The Labuan Financial Services Authority (Labuan FSA) has released the Labuan International Business and Financial Centre (IBFC) Market Report 2025, highlighting the Centre’s continued resilience and growth momentum.
According to the report, in its 35th anniversary year Labuan IBFC recorded notable progress in market expansion, business innovation and regulatory standing, in line with global standards. This was reflected in Malaysia’s positive outcome in the Financial Action Task Force (FATF) Mutual Evaluation, of which Labuan IBFC market was assessed favourably, and the Centre’s debut in the Global Financial Centres Index (GFCI), marking its growing international prominence.
Labuan IBFC’s strong momentum in 2025 was underpinned by sustained business activities, new market participation and resilient performance across key sectors, including banking, insurance, capital markets as well as strategic growth segments such as Labuan captive insurance, Islamic finance and wealth management had also gained much traction in the past year. These niche lines had reinforced Labuan IBFC’s role as financial boutique market that offers not just specialised, future-oriented financial services - but also option of conventional or shariah-compliant business structures for investors.
New company incorporations and registrations grew by 5.1%, while 41 new licences were issued bringing the total to 808 licensed entities and 4,971 operating companies. Total industry assets increased by 13% to $94 billion, while capitalisation rose by 32.3% to $22.5 billion reflecting stronger markets fundamentals across the Centre.
The Labuan insurance market delivered stronger performance in 2025, supported by sustained demand for reinsurance and captive solutions, with expanded top line and profitability strengthening despite shifting risk landscape.
Gross premiums for the insurance sector rose 5.8% to $2.5 billion.
The sector’s net retention increased to 62.7%, reflecting Labuan IBFC’s growing risk capacity and strengthened reinsurance role.
Captive insurance premiums grew 7.2% to $726 million, which contributed to more than one third of the total premiums underwritten by the industry.
Overall, insurance sector profitability rose 7.1% to $434.7 million, the highest level over the past five years.
Labuan Capital market innovation continued to advance in 2025, driven by innovations in digital structuring alongside conventional offerings.
The world’s first RMB200 million Climate Sukuk reinforced the Centre’s innovation across Shariah-compliant finance with sustainable and digital tokenisation solutions.
Labuan fund managers’ asset under management grew 9.4% to $1.2 billion.
Profitability in the fund management segment surged 143% to $10.5 million, supported by higher management fees and improved cost efficiency.
The Director General of Labuan FSA, Affendi Rashdi said: “With the current more fragile global backdrop, Labuan FSA remains vigilant to the implications of the evolving conflict in the Middle East, particularly its effects on energy markets, trade flows and investor sentiment. Yet periods of disruption also tend to accelerate strategic realignment, and within our immediate region, ASEAN remains a natural source of opportunity for Labuan IBFC.”
The Director General added that Labuan IBFC is well-positioned to facilitate regional initiatives such as ASEAN’s, particularly in intermediating cross-border financing, regional trade and investment amongst member countries. These include emerging intra-ASEAN opportunities for infrastructure financing and energy connectivity-related projects, such as the ASEAN Power Grid, where Labuan IBFC can be the bridging market.
With combined support from stakeholders and industry players, Labuan FSA is confident that Labuan IBFC will remain resilient, deepen its anchor within Asia’s broader financial ecosystem, and continue to capitalise on emerging opportunities ahead.
To get a full copy of the report, contact the Labuan FSA.
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