Chapter Eight of the Masterplan focuses on Labuan and makes recommendations for the offshore centre's further development and expansion. Bank Negara said that it recognised Labuan's major financial players as having been instrumental in the "shaping of an active and clean offshore centre", and that the focus now must be to build on their strength. It also said that several areas could be further developed, such as the banking and insurance sectors, and the concerted promotion of Labuan as a meeting and conference centre.

The recommendations made in the Masterplan cover three main areas. They are to promote and diversify further the financial players and activities in Labuan; to promote the development of Islamic banking and to develop and strengthen the capital market, e-commerce and ancillary activities.

Significantly, the Masterplan recommends a review of the existing rules and regulations in Labuan deemed to impede the progress and further development of offshore business. It said that areas to be considered include the introduction of various other types of offshore companies, the changing of the status of Labuan trust companies to offshore companies and the introduction of legislation to make Labuan an active hub for reinsurance and captive insurance.

One of the key recommendations is to enhance Labuan's e-commerce gateway (ECG), which was launched on 23 November 2000. The gateway is a financial portal allowing access to information on products and services, which the Masterplan says should in time be developed into a fully-fledged e-commerce site with a focus on Islamic products and other services. The Masterplan also sees the ECG as being the means for submitting statutory documents and statistical information to the Labuan Offshore Financial Services Authority (LOFSA), thereby improving the speed and handling of physical documents.

Other, supplementary measures are also put forward by the Masterplan, including introducing a free trade zone, that is to say offering tax free status to identified industries, enhancing accessibility to Labuan, and encouraging institutes and companies to hold seminars and conferences in Labuan to increase awareness of the offshore centre.

It is not yet clear exactly which recommendations will be given priority, but reaction to the Masterplan so far has been positive. Quoted in the Malaysian press last week was Alan F King, managing director of International Financial Strategies (Labuan), who said: 'It is a very exciting and ambitious plan. It is realistic and delivery would require hard work. It is very encouraging for Labuan which is a major strategic asset. At the moment, the international environment is difficult, and Asia is challenging. The plan keeps us moving forward and develop in an international context.'

The full text of chapter eight of Bank Negara's Masterplan can be viewed at http://www.bnm.gov.my/feature/fsmp/en_ch08.pdf