Labuan Fund – Set up Private or Mutual Fund
A fund can be set up in Labuan, either as a company, partnership, protected cell company or foundation for the purpose of pooling and raising funds for investment purposes.
- collections and pooling of funds for the purpose of collective investment with the objective of spreading investment risks
- distributes interest in the fund, which allows the holder to redeem his investments that is agreed upon by parties; receiving an amount computed with reference to the value of proportionate interest
Advantages of setting up a Fund in Labuan
Here are some benefits and advantages that you should know about setting up a Fund in Labuan
- Different options of corporate structures to suit different purposes
- Can support different structures for innovations
- Fund can be denominated in multi currencies
- Fund can be used to invest in instruments of different risk profiles
- Small capital requirement
Confidentiality and Protection
- In Labuan, secrecy provisions prohibit any person from releasing information of the fund to another person
Structure of a Labuan Fund
The diagram below explains the structure of a Labuan Fund and its corresponding tax implications
Characteristic of Labuan Fund
Those funds whose shares are: –
- Not offered to the general public.
- 2 types of Private Fund: –
- Consist of not more than 50 investors: First time investment is not less than MYR250,000 (equivalent in any foreign currency);
- Consist of any number of investors, and first time investment not less than MYR500,000 (equivalent in foreign currency).
Any fund designated by the Prime Minister as being private also falls into this category.
Those funds whose shares are offered to the general public for subscription.
The Minister of Finance in Malaysia also has the discretion to designate a fund as a public fund.