The functions of Perbadanan Labuan of Perbadanan Labuan according to Section 4, Act 609 - Perbandaran Labuan Act 2001 are as stated below:

(a)  To promote and stimulate the Federal Territory of Labuan as a tourist destination, duty free area and trade centre;

(b)  To promote, stimulate, facilitate and undertake economic and social development in the Federal Territory of Labuan;

(c)  To promote, stimulate and undertake the development of art culture, sport and recreational activities in the Federal Territory of Labuan;

(d)  To promote, stimulate, facilitate and undertake the development of tourism and infrastructure as well as residential, agricultural, industrial and commercial development in the Federal Territory of Labuan;

(e)  To perform all functions of a local government in the Federal Territory of Labuan;

(f)  To perform all functions of a local planning authority in Federal .Territory of Labuan;

(g)  To control and co-ordinate the performance of the activities mentioned in paragraphs (a), (b), (c) and (d) in the Federal Territory of Labuan; and

(h)  To co-ordinate the performance of the activities carried out by Government agencies in the Federal Territory of Labuan.