Labuan Island lies 8 km off the coast of Borneo, adjacent to Sabah and Brunei Darussalam, on the northern edge of Brunei Bay facing the South China Sea. It is an international offshore financial centre and free trade zone.
Though being a free trade zone with all beers, liquors, cigars and even cars tax-free, the living cost here in Labuan is relatively higher than any other places in East Malaysia, in terms of food and necessities.
This is mainly due to the increased numbers of expatriates (from Halliburton, Schlumberger etc.) that work in the oil and gas field, that pull up the living standard here.
Unless you’re looking for cheap beers and cigars, you could actually skip this destination during your visit to Borneo to save time for other places with richer cultural aspects.