The Federal Territory of Labuan comprises seven small Islands of which Pulau Labuan is the largest. Labuan lies off the North West Coast of Borneo and not far from Brunei. At its nearest point, Labuan is only some 10 kilometres from the Coast of the East Malaysian State of Sabah. MapThe official language is Bahasa, Malaysia; however, English is widely spoken and many documents and publications are available in English. The official currency is the Malaysian Ringgit, although the majority of offshore companies in Labuan are required to carry on business in a foreign currency. Labuan is part of Malaysia and responsibility for its administration falls directly under the Prime Minister's Department. On the 6th November 1989, the Government of Malaysia declared Labuan an International Offshore Financial Centre, and the Offshore Companies Act was enacted on 1st October 1990. Malaysia has signed 32 double taxation treaties with various countries. It is conceivable under tax rules that a Labuan offshore company may be Malaysian resident and therefore benefit from the provisions of a particular tax treaty. Whilst professional advice should be sought at the time of incorporation, it is assumed that an offshore company electing to pay 3% tax on audited net profits would be considered tax resident in Malaysia.