In 1990, Malaysia announced its plan for a regional financial centre to be established on the island of Labuan. The government invested substantial funds in providing the appropriate legislation, infrastructure, and other factors required for a financial centre. This article ex amines Labuan's history thus far, and its current operations in offshore banking, offshore insurance, trust and funds management, and tax planning. The article concludes that while Labuan has made considerable progress in improving its competitive position against other centres, significantly more investment is still required.