The MOU will allow the benefits of Labuan IBFC to be shared with CCB's extensive client network through its 15000 branches in China and globally.
Kuala Lumpur, 25 October 2019 – Labuan International Business and Financial Centre Incorporated (Labuan IBFC Inc), the market development agency for Labuan International Business and Financial Centre (Labuan IBFC), and China Construction Bank Corporation Labuan Branch (CCBL), a branch of China Construction Bank Corporation, have inked a Memorandum of Understanding (MoU) to allow CCBL to promote the benefits of Labuan IBFC to Chinese and Chinese related companies, in addition to supporting the advancement of FinTech development in the jurisdiction.
"We are extremely pleased to be partnering with CCBL, part of the second largest bank in the world, providing a key enabler towards further strengthening our footprint in China and in countries which form the Belt and Road Initiative," said Farah Jaafar-Crossby, CEO of Labuan IBFC Inc. during the official launch of CCBL in Labuan.
The event was graced by the Director General of Labuan Financial Services Authority Danial Mah Abdullah and Mr Ji Zhihong, Executive Vice President of China Construction Bank.
"Over its 29 years as a midshore jurisdiction, Labuan International Business and Financial Center (LIBFC) has become well recognised by investors for its business-friendly environment that is conducive for business growth," said Mr Ji Zhihong.
CCBL is one of the 55 banks in Labuan IBFC, playing a vital role in Labuan IBFC's business ecosystem. The bank also recently obtained approval from Labuan Financial Services Authority (Labuan FSA) to conduct digital banking activities, the first bank in Malaysia to be accorded this allowance.
"Labuan IBFC's readily available structures and solutions and progressive regulatory stance makes the midshore jurisdiction an Asian domicile of choice for digital and fintech players. In fact, more than 25 digital and fintech related licensing approvals were given in 2019 including a new digital asset exchange," said Jaafar-Crossby. "With CCBL as our partner, we look forward to making more inroads into China on the fintech/digital front as well."
This MOU is seen as a key deliverable, from an earlier Regulatory linked MOU between Labuan Financial Services Authority (Labuan FSA) and China Banking and Insurance Regulatory Commission (CBIRC) aimed to foster greater cooperation between Regulators, as well as intermediaries. This Regulatory MOU also provides for supervisory oversight of cross border branches and subsidiaries of China and Labuan-based banks and insurance entities.
Labuan FSA is one handful jurisdictions with which CBRIC has signed such an agreement with, an accolade and recognition for Labuan FSA and Labuan IBFC, providing for a more seamless and facilitative cross recognition for licensed entities in both jurisdictions.
As Malaysia's foreign wholesale financial intermediation centre, Labuan IBFC is a known jurisdiction to Chinese entities that have grown to appreciate as a special zone that facilitates international cross-border trades, investments, risk management and financing as well as asset and wealth management. Currently Labuan IBFC is home to close to 300 companies (out of which 35 are licensed entities) directly originating from China.
In order to facilitate more efficient transactions, cost-effective real-time settlement of renminbi-denominated transactions with financial institutions and entities in Labuan IBFC is possible, as is the incorporation of Labuan international business companies with Chinese based name and articles of associations in Mandarin.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.