Valsen Fiduciaries Funds

Labuan Private Fund

Labuan mutual funds are established by Part III of the Labuan Financial Services and Securities Act 2010 (LFSSA).

About Labuan Private Fund

Labuan private funds are mutual funds whose securities are not offered to the general public and are owned or held by:

  • Not more than 50 investors where the first time investment of each of such investors is not less than RM250,000 equivalent in any foreign currency; or
  • Any number of investors where the first time investment of each such investors is not less than RM 500,000 equivalent in any foreign currency.

Labuan Private Fund Legal Requirements

 

Requirements

Description

  1. Applicable legislation

Labuan Financial Services and Securities Act 2010 (LFSSA)

  1. Supervising Authority

Financial Service Authority (FSA)

  1. Corporate vehicle permitted

State the legal form of the fund,

  • Company;

  • LLP;

  • PCC;

  • Any other similar body formed under the laws of Labuan

  1. Share capital or equivalent

    • Minimum subscription

RM250,000 (USD 63,000)

    • Minimum investors

50

  1. Directors / Partners / Trustees

    • Minimum number

2

    • Corporate Directors / Partners / Trustees allowed

Yes

    • Local Directors / Partners / Trustees required

No

  1. Fund functionaries required

    • Custodian

      • Custodian required

Yes

      • Local custodian required

No

      • Eligible custodian

Custodian must be a bank licensee or a Labuan trust company.

    • Fund manager / Investment Adviser

      • Fund manager required

Yes

      • Local fund manager required

No

      • Fund manager requires to be licensed

No

      • Eligible fund manager

Fund Manager of a Private Fund is not required to be licensed.

    • Fund administrator

      • Fund administrator required

Yes

      • Local fund administrator required

No

      • Eligible fund administrator

Fund Administrator of a Private Fund does not require to be licensed.

    • External auditor

      • External auditor required

Yes

      • Local external auditor required

No

      • Eligible external auditor

Subject to approval by Labuan FSA

  1. Asset Requirements

    • Restriction on type of asset class invested

None

    • Asset diversification requirements

None

    • Limitation on size of the fund or total assets under management

None

  1. Local physical office required

No

  1. Prospectus / Offering Memorandum required to be filed

Yes

  1. Eligible for listing

Yes

  1. License fees

    • License application fee

RM 2,000 (USD 600)

    • Annual license fee

RM 2,000 USD 600

  1. Estimated license processing duration

3 months

Ongoing Obligations

Requirements Description
Monthly obligations
None
Quarterly obligations
None
Annual obligations

Maintain such accounting records and financial
statements available for examination by the
Registrar or any person authorized under his hand at its principal place of business or registered office in Labuan;

Ensure compliance with the Anti-Money Laundering and Anti-Terrorism Financing Act 2001 and Guidelines on Anti-Money Laundering and Counter Financing of Terrorism which is relevant to Labuan FSA.

Other obligations

Notify Minister within a reasonable period of any of the following changes:

  • Changes in any Key Functionary in the Fund.
  • Change in the registered office address
  • Change of its agent in Labuan
  • Change in name or address of-
    • each director of the fund, if the fund is a company
    • each trustee of the fund, if the
    • Each general partner of the fund, if the fund is a limited
  • Appointment, resignation or removal of a Director or officer.
Tax Obligations and Other Exemptions
Requirements Description
Business Tax
3% of Net Profit based on the audited report
Withholding Tax
No withholding tax is payable on dividends and/or interest payable.
Value Added Tax (VAT)
VAT is not applicable to mutual funds in its entirety.
Stamp duty Act
Mutual funds are exempt from payment of stamp duty Tax
Trades Tax Act
Mutual funds are exempted
Immovable Property Transfer Restriction Act
Mutual funds are exempted
Immigration Decree
Mutual funds are exempted
Exchange Control Act
The provisions of the Exchange Control Act do not apply to mutual funds.
Foreign Earnings Act
The Foreign Earnings Act is not applicable to mutual funds in its entirety.

Benefits of a Labuan Private Fund:​

  • The structures to set up Labuan Private Fund are flexible. A Labuan Private Fund can be formed with a Labuan company, partnership, protected cell company, foundation.
  • Labuan Private Fund supports multiclass fund i.e. multi-currency / asset class
  • It is easy to set up and exit
  • There is low minimum capital requirement per
  • Low tax at only 3%
  • There is no tax for investment holding structure
  • Investment in Malaysia is permissible
  • The fund manager service is optional
  • There are no foreign exchange controls
  • There is no withholding tax
  • There is no capital gain tax / inheritance tax