Labuan is a small island about the size of Miami off the coast of North Borneo. It has an area of 92 square km. It is 8 km off the coast of Borneo. Uninhabited when discovered in 1497, by the Portuguese, its harbour served as a safe anchorage for ships waiting to enter port of Brunei when the region was a haven for pirates.
James Brooke, the ''Raja of Sarawak'', expanded British control over the Sultan of Brunei's islands on the northern coast of Borneo. He and the British Navy decided Labuan would be a valuable coaling station and a base for fighting piracy. In October 1844, when they sailed into Brunei harbour to ask the Sultan to give Labuan to Queen Victoria, the Sultan agreed. The warship near the Sultan's palace lined up with cannons, enhanced the persuasiveness.
In 1895, a $1 Coat of Arms used chiefly as a revenue was overprinted to supply needed lower values, as on this 4 cents surcharge.
Labuan became a Crown Colony in 1848, hoping it would rival Singapore as a trading center. However, as the colony survived on grants in aid until 1869, it went into debt, until the administration was transferred to the British North Borneo in 1890. On January 1, 1906, Straits Settlements assumed responsibilities for the colony, incorporating Labuan entirely two years later.
During the World War II, Japanese occupied Labuan in January 1942, and made it HQs of its 32nd Southern Army. The island was however liberated in September 1945.
Few relics remain of Labuan's colonial era. The site of the old Government House is now a public park. In 1946, Labuan was transferred to the newly created British North Borneo Colony. In 1963, North Borneo renamed Sabah, including Labuan, became a part of Malaysia. In 1990, it became a federal district.
Strait Settlement stamps were used in Labuan prior to 1879. In May 1879, stamps by De La Rue in London, bearing Victoria's image were released in the Colony. These first designs were reprinted on different papers and in new values for 15 years, with later surcharges in 8c and 2c denominations. In 1883, $1 stamps were created.
In 1894, the British North Borneo Company began to overprint its pictorials, ''Labuan''. The philatelic trade released large quantities of cancelled to-order stamps. Labuan stamps were replaced by those of the Straits Settlements in 1906
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