Labuan IBFC Pilots Awqaf Free Zones to Modernize Islamic Endowments

On the sidelines of the Islamic Development Bank Group meetings in Baku, the Islamic Development Bank Institute and Labuan Financial Services Authority signed a pact to integrate traditional Waqf assets into modern financial ecosystems, potentially turning the Labuan International Business and Financial Centre into a global pilot hub.

Editorial·June 16, 2026·reads: 736

Labuan IBFC Pilots Awqaf Free Zones to Modernize Islamic Endowments

The partnership, formalized on June 16, 2026, aims to reconcile centuries-old Islamic philanthropy with contemporary regulatory frameworks. By establishing dedicated zones, the initiative seeks to manage Waqf assets under modern governance, ensuring charitable objectives persist while unlocking productive economic capacity. Labuan FSA Director General Affendi Rashdi noted that the center’s existing digital infrastructure and cross-border network provide a unique environment for testing these financial models.

IsDBI has already completed foundational research, including model laws and feasibility studies, to facilitate the transition. Acting Director General Dr. Sami Al-Suwailem emphasized that this collaboration marks the first formal attempt to embed the Awqaf Free Zones concept within an active international financial center. If the upcoming legal and regulatory assessments prove successful, the model could provide a scalable blueprint for member countries to align Islamic endowments with Sustainable Development Goals.