Introducing Pulau Labuan
If you've ever wondered what a cross between a duty-free airport mall and a tropical island would look like, may we recommend the federal district of Pulau Labuan. Some call this Sabah's version of Vegas, and in the sense that Labuan offers both duty-free sin and tacky family fun, we kinda agree. By the way, everything here is duty free, because politically, Labuan is governed directly from KL. As such, a lot of the booze you consume and cigarettes you smoke in Sabah and Sarawak is illegally smuggled from Labuan.
The sultan of Brunei ceded Labuan to the British in 1846 and it remained part of the Empire for 115 years. The only interruption came during WWII, when the Japanese held the island for three years. Significantly, it was on Labuan that the Japanese forces in North Borneo surrendered at the end of the war, and the officers responsible for the death marches from Sandakan were tried here.
Bandar Labuan is the main town and the transit point for ferries linking Kota Kinabalu and Brunei.