According to the Annual Report, the number of new offshore companies incorporated in the Malaysian Integrated Offshore Financial Centre (IOFC) in the island of Labuan increased from 494 in 2003 to 555 in 2004, representing a growth of 12.3%. This brought the total number of offshore companies operating in the IOFC to 2,701 as at end-2004 (2003: 2,486).

The continued growth in the number of offshore companies contributed to the increase in total profit before tax of the offshore trust company sector by 17.4% to USD2.7 million, compared with USD2.3 million in 2003. LOFSA also revealed that by 31 December 2004, all trust companies in Labuan had completed the exercise to convert their status to offshore entities in accordance with the amended Labuan Trust Companies Act 1990.

Meanwhile, the offshore banking industry recorded a significant increase in unaudited pre-tax profit amounting to USD272.9 million in 2004 from USD166.8 million in 2003, and the total number of offshore banks, including investment banks, was 57 compared with 56 in 2003. The number of offshore investment banks in the IOFC increased to 11 (2003: nine) with the issuance of two new licences in 2004.

The Report went on to reveal that the offshore insurance industry continued to attract more institutions to the Malaysian IOFC as reflected in the seven new licences approved during the year, whilst in the offshore fund management sector, three new private funds were registered in 2004, with the total number of registered private funds unchanged at 16 due to the closure of three private funds. The number of fund managers increased from 14 in 2003 to 15 in 2004.

Additionally, reflecting the jurisdiction's desire to act as a regional hub for Islamic as well as western financial activities, it emerged that total Islamic assets (including those of conventional offshore banks that offer Islamic financial windows) increased by 13.8% to USD678.7 million (2003: USD596.2 million). Total deposits in this area continued to record an upward trend, increasing by 54.4% or USD107.2 million to USD304.1 million in 2004.

In a statement released to acompany the Annual Report, LOFSA observed that:

"The Malaysian IOFC registered a strong and positive performance in 2004, building upon the progress achieved in 2003. Following the various measures implemented by LOFSA to promote and develop Labuan as a regional offshore financial centre, efforts also continued to be focused on ensuring that the regulatory framework in LOFSA remained sound and progressive."

It concluded by announcing that:

"LOFSA will continue with its approach of facilitating genuine and reputable businesses to set up their operations in the Malaysian IOFC. Going forward, the developmental and international promotional activities will continue to be intensified to strengthen the position of Labuan as an international offshore financial centre."