Labuan is the official federal region of Malaysia. It consists of Labuan Island and six other miniature islands. It resides in the eastern part of Malaysia off the shore of Sabah. Labuan is usually introduced as an offshore financial center, which allows international, financial and business assistance. Although English is generally spoken in Labuan, the preferred official language of Labuan is Bahasa Malaysia. Therefore, this is an excellent territory for a Labuan Funds License.

Timeframe: within 5 months

Minimum capital requirements – £ 70,000

Overview

Labuan is an emerging market economy and displaying a mutual funds company in Malaysia’s federal territory allows the following benefits: a swift and effective certification process, relatively favorable regulatory conditions, Favorable tax conditions which carries a minimum 3% tax to be charged on earnings or a flat rate of RM 20,000, no withholding of tax on distributions to investors and the elimination of payments of stamp duty on share transfer.

To build and license a Labuan private fund, a signed notice must be given Labuan FSA with a data record. This can be carried in through a Labuan trust corporation, bank including Islamic bank and Labuan investment.

Notable features

General information

Company structure and staff:

  • At least one shareholder needed. No nationality limitation.
  • At least two directors

Taxation

  • Tax on profit– 3% of net audited profits annually
  • Other taxes – 0% (capital gains, withholding tax, stamp charge on offshore instruments)

Accounting requirements

  • The Business will be needed to file audited financial reports and tax return within three months from its balance sheet date.
  • The governments may do a half-yearly audit of the Business.
  • Accounting documents should be kept at the local offices of the administrator.

Registered Agent – Needed

Secretary – Needed

Professional indemnity insurance policy

  •  Coverage of not smaller than RM1 million or its equivalent in any foreign currency (USD 250,000) during its operations

Company name

  • Language: Any
  • Letters: From Latin alphabet
  • Must be different, not similar to any other Labuan business
  • Must carry one of the following words at the end of the business name: Incorporated, Sociètè, Corporation.  Anonyme or its corresponding summary: Inc., Corp. or S.A. If the Malaysian word “Berhad” is used, then “L” to denote that the company is incorporated in Labuan must introduce it.
  • Corporate names cannot add the following words without further government concessions or licenses: Bank, Building Society, Insurance, Assurance, Chamber of Commerce,  Reinsurance,University, Municipal or their foreign language equivalents.
Procedure

In order to obtain a license, the following actions will be carried out:

  • The arrangement of all important papers and application
  • Application for Approval to Labuan FSA
  • Application for reservation of business name
  • Development and submission of the application and records to the Registry
  • Incorporation of the business
  • Opening of the local bank account
  • Application for the license
Documents

In order to receive Fund Management License, kindly present the following documents:

  •     An authorized copy of a valid passport (of all Director and Shareholder of the company)
  •     A recent copy of confirmation of address in English
  •     Bank reference Letter
  •     CV of each Director and Shareholder
  •     Certified exact likeness passport photos of the shareholders and directors
  •     Certified exact copies of the police reports

In the case if the shareholder is a corporation, requires to provide:

  •     Certified true copy certification of registration
  •     List of shareholders
  •     Copy of the current annual/financial return*

All documentation shall be presented in English language or translated to English by an expert and certified by Notary Public.

* Additional papers may be asked by the LFSA or local Bank at any point to verify specific information.

* If documents are not in English, then they must be brought by a notarized translation.