These measures are key MIFC measures and incentives and these include: (i)  Profits and dividends received by non-resident investors from holding of RM and non RM Islamic instruments issued in Malaysia are exempted from withholding tax;  (ii)  A special purpose vehicle (SPV) for Islamic financing purposes via the Islamic capital market is not required to comply with the administrative procedures under the Income Tax Act 1967;  (iii)  A company that establishes a SPV is given a tax deduction on the issuance cost of the Islamic securities incurred by the SPV;  (iv)  Tax deduction on issuance cost for all Islamic securities approved by the Securities Commission; and  (v)  Stamp duty exemption for 10 years on instruments relating to Islamic securities under the MIFC. Third area is outsourcing, insourcing and white labeling activities. Malaysia's more than two decades of experience in takaful operation and product design can be systematically structured as a complete solution to be offered to new takaful operators. Takaful operators in other jurisdictions may leverage on the services and experience of the Malaysian Islamic finance and takaful industry by outsourcing certain operational functions, such as product design and investment activities, thereby allowing them to focus their currently limited resources to important tasks of expanding the business. Strategic alliance by Malaysians can also be forged with takaful operators in other jurisdictions to provide total product solution in the form of white labeling arrangement.

Bank Negara Malaysia has received positive response from the local and foreign financial institutions to participate in the MIFC, particularly in the establishment of International Islamic Banks (IIBs), International Takaful Operators (ITOs), as well as International Currency Business Units (ICBUs) of Islamic banks and takaful operators. To date, 14 financial institutions have been granted approval to set up ICBUs. IV. Critical areas of contribution – Malaysia's role  In this last segment of my address this morning, allow me to share several key areas in Islamic finance where Malaysia can play major roles, particularly by capitalizing on various initiatives and incentives under MIFC banner. The first area is retakaful. The Malaysian Government has focused efforts towards the development of the retakaful sector in complementing the encouraging growth and expansion of the takaful industry. This is a critical response to the challenge of the shortage of strong and credible retakaful capacity globally which poses an impediment to the growth momentum of the takaful sector. Besides fulfilling the need for retakaful support from the takaful operators, and reducing the industry's dependency on conventional reinsurance support, the retakaful operators will also play key roles in enhancing the technical knowledge in the market, as well as in promoting product development and innovation in the takaful industry. For this, Bank Negara Malaysia has taken a strategic move to further strengthen Malaysia's edge as a retakaful hub by inviting strong and qualified applicants, both local and foreign, to make Malaysia as their platform for retakaful activities.