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Labuan, officially the Federal Territory of Labuan, is an island federal territory of Malaysia. Its territory includes Labuan Island and six smaller islands, off the coast of the state of Sabah in East Malaysia. Labuan's capital is Victoria and is best known as an offshore financial centre offering international financial and business services via Labuan IBFC since 1990 as well as being an offshore support hub for deepwater oil and gas activities in the region. It is also a tourist destination for people travelling through Sabah, nearby Bruneians and scuba divers. The name Labuan derives from the Malay word labuhan which means harbour. Labuan appears less developed and more lagged compared to the other major Federal Territory cities like Kuala Lumpur and Putrajaya. The island’s urban landscape is characterized by a mix of older buildings and limited modern architectural developments. Key infrastructure projects, such as road networks and public transportation systems, are not as advanced or extensive. Historically, the island has attracted less investment, mainly due to its smaller population and market size, which may not offer the same economic incentives for investors. While centering as an offshore financial center and oil and gas hub are crucial, they do not necessarily drive comprehensive urban development or diversification into other sectors that could enhance infrastructure. Other contributing factors include geographical isolation, which imposes logistical challenges and higher transportation costs. Additionally, Labuan has faced higher unemployment rates, which can impede economic growth. The island’s limited size, further constrained by the expansion of local housing, significantly reduces its potential for large-scale development. Because of the challenge, the government has initiated several projects to improve Labuan, attracting significant number of visitors and investors around the world, while aligning the island's development trajectory with that of other states. According to Labuan Development 2030. The current priority is Smart City Phase 1 & 2, which aims to transform Labuan into a smart and sustainable island. Similar to Singapore.