Did you know?
Pulau Labuan, or Labuan Island, derives its name from Labuhan, the Malay word for “harbour” and is fittingly Malaysia’s only deepwater port. Associated with safety and security, Labuan Island in its early days was a port of refuge for vessels plying the waters of Borneo, providing shelter from pirate attacks and storms.
Located on the major shipping and air routes of Southeast Asia, Labuan is a Malaysian Federal Territory comprising a cluster of seven islands, of which Pulau Labuan is the largest.
Labuan Island is one of three duty-free islands in Malaysia, thus all goods sold over here are free of Malaysian tax. In 1990, to further bolster the island’s status, Pulau Labuan was designated an international offshore financial centre.
Aside from financial services, Labuan is also a hub for the oil and gas industry, providing refining and support services to rigs scattered on the western seaboard of Borneo.
History & background
Once a part of the Bruneian Empire, Labuan Island was ceded to Britain in 1846. During World War II the Imperial Japanese Army occupied Labuan, changing its name to Maida Island. In 1963, Labuan Island became a part of Malaysia.
>> More on the history of Labuan Island
The island’s ethnic composition is predominantly Malay (Kedayan and Bruneian Malays), with a sizeable Chinese minority and growing Indian community and it feels quite cosmopolitan, especially in Bandar Labuan (formerly Victoria), the main town and port.
Location & geography
Labuan sits ~8 km (5 mi) off the northwestern coast of Borneo, north of Brunei Bay. It consists of the main island, Pulau Labuan, and six smaller islands: Pulau Burung, Pulau Daat, Pulau Papan, Pulau Kuraman, Pulau Rusukan Besar and Pulau Rusukan Kecil, with the latter 3 belonging to Labuan Marine Park.
The main island covers 75 sq km (30 sq m) and is essentially flat. The highest point, Bukit Kubong, is just 91 m above sea level – and mostly covered in vegetation. There is little agriculture here – the best land is used for residential or tourist development or, in the southwest, shipbuilding, manufacturing and oil and gas production.
Commerce & tourism
Labuan serves as an important hub for commerce and tourism in the region. Its position in the middle of the Asia-Pacific region near shipping routes and offshore oil and gas fields prompted the Government to encourage foreign investment. In 1990 the island was declared a tax haven by the Malaysian government as the first step toward developing it into an offshore financial centre.
Labuan Island’s duty-free status is a great attraction for the many tourists who come from Sabah, Sarawak and Brunei Darussalam – there is even a month-long, end-of-year ‘shopping carnival’.
Labuan Island has some great beaches, notably Pohon Batu, Pancur Hitam, Layang-Layangan and Batu Manikar. Hotels and resorts in Labuan are aplenty, and the waters around the island are perfect for diving, watersports and fishing, both deep-sea and around the coasts.
The island boasts excellent physical infrastructure with state-of-the-art telecommunication networks and island-wide internet connectivity.
Shopping & dining
An abundance of fresh seafood – fish, shellfish, crabs, prawns, squids, lobsters – can be found in Labuan, prepared in a variety of cooking styles. Not to be missed are Labuan’s local delicacies, which include the unique Coconut Pudding made from steamed coconut water and jelly, Lamban, Punjung and Jelurut.
Labuan enjoys a tax-free status that makes it the perfect place to find imported products at bargain prices. Visit this free-trade zone to choose from an assortment of perfumes, chocolates, cosmetics, liquor, cigarettes, textiles, leather goods, electrical appliances, electronic gadgets, pens and watches.
Labuan has many schools. There is also one international school, the Labuan International School.
Labuan’s own institution of higher education is Universiti Malaysia Sabah Labuan International Campus (UMSKAL), a branch of Universiti Malaysia Sabah in Sepanggar Bay, Kota Kinabalu. Labuan also has a matriculation college, Kolej Matrikulasi Labuan, one of only two matriculation colleges in East Malaysia. Thus, many pre-university students from Sabah, Sarawak and Labuan attend their courses here.