What is a Labuan insurance and insurance-related business?
A Labuan insurance business means an insurance business transacted in foreign currency and includes life, general, reinsurance, captive insurance, insurance manager, underwriting manager and insurance broking, but does not include domestic insurance business.

What are the criteria to set up an insurance entity in Labuan IBFC?
An applicant is eligible to apply for a licence to conduct Labuan insurance and insurance-related activities in Labuan IBFC if it meets the following criteria:
  • Has a good financial performance track record, at least in the three years preceding the application;
  • Has the necessary expertise (management competency) and staffed with appropriate and adequate personnel to run the insurance business;
  • Has no adverse report from the respective home regulatory authorities or announcement in financial journals, newspaper or any other reliable sources; and
  • Has a good business plan.

What is a permitted business activity of a Labuan captive insurer?
A Labuan captive insurer may underwrite direct insurance/reinsurance (general or life) business risks of their own group or third party risks subject to Labuan FSA’s approval.

What is a rent-a-captive?
A rent-a-captive is a captive insurance company that can be utilised by a number of users, or so called renters without voting control of the captive. While none of the users will own the rent-a-captive, each will enjoy the commercial benefits of a captive. The captive facility "rents" out its capital, surplus and licence to the policyholder and usually provides administrative services, reinsurance and/or an admitted fronting company.

What kind of insurance can be insured by a captive insurance company?
Almost any kind of risk can be insured by a Labuan captive insurance company.

What is a protected cell company?
A labuan company may be incorporated as a protected cell company (PCC). In addition, an existing Labuan company can be converted into a PCC. The PCC has the ability to form "cells". The cells of a PCC may comprise:
  • A core for holding non-cell assets or general assets; and
  • Any number of cells with the intention of segregating and protecting the assets of each respective cell.

Neither the core nor the individual cells created are separate legal entities but nonetheless, each cell is legally separated from any other cell and each has sufficient attributes to carry on business independently under the "umbrella" of the Labuan PCC. A Labuan PCC may be established to conduct captive insurance/reinsurance in accordance to either conventional or Islamic principles.

How is a Labuan PCC taxed?
The rate of tax imposed is 3% of audited net profits.

What is the tax implication on the cells of the PCC?
The income of the cell(s) under the PCC is taxed on a consolidated basis in the name of a Labuan PCC.

What is the tax implication on the distributions of profits by the cells in a PCC?
The dividends received from the Labuan PCC by the cells are tax-exempt.

What is the governing legislation for the Labuan insurance and insurance-related companies business?
The Labuan insurance and insurance-related companies business is governed by the following Labuan laws:
  • Labuan Financial Services and Securities Act 2010;
  • Labuan Islamic Financial Services and Securities Act 2010;
  • Labuan Companies Act 1990; and
  • Labuan Business Activity Tax Act 1990.


What are the fees payable by insurance entities in Labuan IBFC?
The fees payable are illustrated in the table below:
Processing Fee
Annual Fee
General Insurer/Life Insurer/Labuan Reinsurer/
Insurance Broker/Insurance Manager/Underwriting Manager
Captive Insurance
Master Rent-a-Captive
Subsidiary Rent-a-Captive
PCC Captive (Core)
PCC Captive (Cell)
Co-location Office Fee
Marketing Office Fee
All licensees are required to pay to Labuan FSA annual licence fees on or before 15 January of each year.
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