An hour's ferry ride from Brunei and three hours from Kota Kinabalu, Pulau Labuan is a small island of just 100,000 inhabitants. It has become a popular tourist destination, mainly thanks to its free port. It was originally held by the Sultan of Brunei before falling into British hands. The British turned the island into a coal-mining colony. Heavily bombarded by Japanese forces in 1941, the island was liberated in 1945. The island became part of Malaysia on independence, and was granted provincial autonomy in 1984. The Federal Territory of Labuan comprises one main island and 6 islets covering an area of 92 km².

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