LABUAN COMPANY FORMATION?
LOOK NOWHERE BUT LAW & COMMERCE.
Law & Commerce provides a full spectrum of corporate services under one roof for Labuan Company formation, application for business licenses, accounting, tax, employment pass and related compliance services both for individuals and companies worldwide.
Professional Labuan company formation services
About Law & Commerce
Law & Commerce Trust Limited is an independent trust company licensed by the Labuan Financial Services Authority. Law & Commerce is owned and managed by qualified lawyers and professionals. We began in 1996 with just one office in Labuan. We now operate from Labuan and Kuala Lumpur.
Our services are briefly divided into “corporate client services” and “private client services” You will learn more about them in this website. Through our associate company Offshore4Asia Ltd, we also offer offshore services from a number of other jurisdictions notably Ras Al Khaimah, Brunei, BVI, Hong Kong, Singapore, Mauritius, Seychelles and Bahamas. But we consider Labuan as our home tuft.
Whilst opportunities are abound in offshore centres, it is our informed opinion that client who intends to venture into it for the first time should be properly advised. The claims of low or nil tax, secrecy and flexibility are too often either too simplified or unrealistic. You need to go beyond skin-deep approach. It is “substance” over form. You do not acquire offshore structure which does not work or cannot stand up to scrutiny. We are here to advise you and recommend you offshore structures that work and can stand up to scrutiny.
The image conjures about offshore centres is rarely positive. At best it is of a place to hide wealth and at the very worst it is of a place where shady deals and dirty money take refuge. After more than a decade of offshore practice we however find that this image is largely untrue. Of course there have been centres which were battered with financial scandals before but such scandals did not take place in offshore centres alone. Major cities like New York, Hong Kong, London, etc have their own share of financial scandals too. Recent financial turmoil has shown that the fault line is not in offshore centres but rather in onshore centres.
The key to a success of an offshore centre is more regulation as opposed to the lack of it. Further, structures to be created must have substance, i.e. real business objective. And we would like to state in no uncertain term regulation and substance are the features that we recommend to our clients when choosing jurisdiction and forming structures. Well-regulated centres will breed quality service providers and these providers are the ones you should look too. Don’t be hooked by the promise of low or nil tax and secrecy alone. Substance will determine whether your structures can stand up to scrutiny.
In providing our services we strive to create value and deliver cost effective and excellent services to our clients. We are also guided by overriding compliance and best practice principles common in our industries. Such principles more often than not require us to place professionalism and ethical integrity above all else in accepting our clients.
We have been in offshore business for more than a decade now. It has been challenging but nevertheless interesting and rewarding. I hope that you too will find your offshore journey interesting and rewarding.
Ahmad Kamil Mohd Yusop
LL B(Hons), CLP
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- Some wonderful things to do in Labuan
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- A thoughtful thought of why should you go for a Labuan offshore
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- A brief introduction to why to set up labuan companies
- A glance on the important accounting tasks that should be done weekly
Labuan International Business and Financial Center (IBFC) is an extraordinary monetary zone of the Malaysian government dependent on the island of Labuan off the Borneo coast. It was built up in 1990 and has been showcased as having an exceptional position to tap speculation openings in Asia and past.
The Labuan IBFC shares a typical time zone with numerous enormous Asian urban communities and its area among China and India just as its nearness to a few other monetary focuses has been utilized to advance the Labuan IBFC as an advantageous area for business dealings. Labuan has been assigned as a money related focus and unhindered commerce zone by the Malaysian government.
In January 2008, a rebranding and repositioning activity of the IBFC to mirror the locale's thriving worldwide status was trailed by a forceful showcasing exercise. This incorporated the setting up of Labuan IBFC Incorporated Sdn. Bhd. in May of that year with a command by the Malaysian government to showcase and advance Labuan as the chief International Business and Financial Center in Asia Pacific. more info at https://www.simplyoffshore.com
What is a Labuan Company? A Labuan organization is an organization consolidated under the Labuan Companies Act 1990 (LCA 1990). Organizations under this Act are permitted to do business in, from or through Labuan so as to make the most of its expense lack of bias. A Labuan organization may have these offers structures:
- organization constrained by offers
- organization constrained by certification
- a boundless organization
- Kinds of organization
- Labuan Company
- Labuan Foreign Company
- Labuan Protected Cell Company
Occupants and non-inhabitants of Malaysia are permitted to set up Labuan organizations. Under Section 7(5) of the Labuan Companies Act 1990 (LCA 1990), a Labuan organization is permitted to manage an occupant subject to warning to Labuan Financial Services Authority (Labuan FSA).
WHY USE A LABUAN COMPANY?
Organizations joined in Labuan IBFC may appreciate:
• Access to Malaysia's Double Tax Agreements with more than 80 nations (Appendix 1)
• A focused expense system Labuan business exercises as characterized in the Labuan Business Activity Tax 1990 (LBATA 1990) which gives:
- Taxation of 3% of net inspected benefits or a level pace of MYR20,000 to be chosen yearly, if the organization is undertaking exchanging exercises.
- Companies conveying a non-exchanging exercises isn't charged expense, for example 0%.
- Under Section 3A1 of the LBATA 1990, an organization can choose to be burdened under the Malaysia Income Tax Act 1967, for example subject to corporate assessment pace of 20% (on the first MYR500,000) and from that point 24%.
The Global Incentives for Trading (GIFT) program is planned for situating Malaysia as a provincial exchanging and capacity center point for oil and gas. Under the program, a lot of motivating forces are offered through the foundation of the Labuan worldwide item exchanging organization (LITC), including impetuses for dealers and exchanging houses to utilize Malaysia as their global exchanging base.
The LITC's business is the exchanging of physical and related subsidiary instruments of oil and oil related items including melted gaseous petrol (LNG).
LITC must consent to the accompanying conditions after the conceding of its permit and beginning of its business:
Accomplish yearly least turnover of USD50 million;
Cause least yearly business spending of RM3 million payable to Malaysian inhabitants in Malaysian Ringgit; and
Utilize at any rate three expert merchants that satisfy the accompanying necessities:
The Principal official or any individual playing out a senior administration work who might be chiefly responsible for:
settling on choices that influence the entire, or a significant piece of the LITC business;
actualizing and authorizing approaches and procedures affirmed by the LITC's Board of Directors including Head of Department or any equal assigned individual; or
inner controls and procedures of the LITC.
These expert dealers will be associated with any of the accompanying territories:
- Hazard Management;
- Obtainment; or
- Deals and Marketing.
These expert dealers will be occupants of Malaysia in a schedule year for the time of evaluation under the Income Tax Act 1967 (ITA).
The LITC must have adequate capital or working supports that comparable with its tasks and exercises.
The LITC must demonstrate unmistakably on its letterhead, stationery and different records including signage containing its name that it is authorized as a "Labuan International Commodity Trading Company authorized by Labuan FSA", together with its permit number.
The LITC is required to set up its operational office, which can be anyplace in Malaysia. The accompanying subtleties must be distinguished and gave to Labuan FSA preceding the beginning of business:
Name, assignment and contact subtleties, for example, phone number and email address of the official that is responsible for the LITC.
Address of Operational Office
To give address and staffing plan at its operational office.
The LITC must guarantee that its business is led with both corporate administration and hazard the board systems set up.
Guarantee that the Principal Officer, Director(s) and Officer(s) in charge of the administration of the organization are fit and legitimate people in accordance with Section 4 of LFSSA and the Guidelines on Fit and Proper Person Requirements issued by Labuan FSA.
The LITC is required to submit to Labuan FSA the accompanying:
The finished Annual Update Submission Form most recent by 15 January of every year (according to Appendix I); and
A duplicate of its evaluated budget summaries inside six (6) months after the end of each budgetary year.
Get earlier endorsement from Labuan FSA on any new changes being affected on the accompanying:
- Marketable strategy;
- Chief Officer;
- Directorship; and
The LITC is relied upon to agree to every one of the prerequisites of this Guidelines just as the pertinent necessities under LCA, LFSSA, other Labuan enactments and the laws of the locales in which the LITC works from, whichever appropriate.
- Administering Legislation
- Labuan Financial Services and Securities Act 2010
- Labuan Companies Act 1990
- Related Guidelines and Circulars
- Rules on the Establishment of Labuan International Commodity Trading Company under the Global Incentives for Trading Program
- LITC Company Annual Update Submission Form
- Mandate on Labuan International Commodity Trading Company Trading in Non-Petroleum and Non-Petroleum-Related Commodities
Law & Commerce Trust Limited
How to set up Labuan Trust Company
Labuan trust company guidelines
GUIDELINES ON THE ESTABLISHMENT OF LABUAN TRUST AND ISLAMIC TRUST
1.1 The Guidelines clarifies the procedures for the creation, establishment and regulatory requirements for Labuan trust and Islamic trust (Labuan trust)
in the Labuan International Business and Financial Centre (IBFC).
1.2 A Labuan trust has the same meaning assigned to it by Part II of Labuan Trusts Act 1996 (LTA) and the creation of a Labuan trust is generally for an individual or a settlor to give specific property to a third party to be held for the benefit of others, including charities. The LTA also allows the creation of the following types of trust:
1.2.1 Purpose trusts;
1.2.2 Charitable trusts;
1.2.3 Spendthrift or protective trusts; and
1.2.4 Labuan special trust.
2.1 The Guidelines is applicable for Labuan trusts created under the LTA and Labuan
Islamic trusts established under Section 105 of the Labuan Islamic Financial
Services and Securities Act 2010 (LIFSSA).
3.0 Legal Provision
3.1 The Guidelines is issued pursuant to Section 4A of the Labuan Financial Services
Authority Act 1996 (LFSAA) to provide guidance on the creation or establishment
of Labuan trusts and Labuan Islamic trusts.
3.2 Any person who fails to comply with the Guidelines is guilty of an offence and may
be punishable under Section 36B and 36G of the LFSAA.
1 Henceforth onwards, in the Guidelines, Labuan trust will also include Labuan Islamic trust throughout the Guidelines unless specified otherwise. Guidelines on the Establishment of Labuan Trust and Islamic Trust Page 2/8
3.3 The Guidelines should be read together with the following:
3.3.2 Labuan Trusts Regulations 2010;
3.3.3 Labuan Trusts (Amendment) Regulations 2013;
3.3.4 LIFSSA; and
3.3.5 Written directions, guidelines and circulars that Labuan FSA may issue from time to time.
3.4 Unless the context otherwise requires, all other terms expressed in the Guidelines have the meaning assigned thereto by the LTA and LIFSSA. Should there be any inconsistency in the provision(s) stipulated herein this Guidelines with any provisions in the LTA or LIFSSA, the provisions of the LTA and LIFSSA shall prevail.
4.0 Effective Date
4.1 The Guidelines shall come into effect on 1 August 2015 and would remain effective and applicable unless amended or revoked.
4.2 The Guidelines will supersede the Guidelines on Shariah Compliant Offshore Trust in Labuan International Business and Financial Centre (IBFC) issued on 24 July 2008 by Labuan FSA.
4.3 All creations and registrations granted by Labuan FSA relating to Labuan trust prior to the Guidelines shall remain valid unless revoked.
5.0 Purpose of a Labuan Trust
5.1 A Labuan trust may be created or established for a specific particular purpose which could be charitable or otherwise. A charitable purpose means and includes any of the following description of purposes:
5.1.1 The relief or eradication of poverty;
5.1.2 The advancement of education;
5.1.3 The promotion of art, science and religion;
5.1.4 The protection of the environment;
5.1.5 The advancement of human rights and fundamental freedom; or
5.1.6 Any other purposes which are beneficial to the community.
Guidelines on the Establishment of Labuan Trust and Islamic Trust Page 3/8
6.0 Creation of a Labuan Trust
6.1 A Labuan trust can be created by a will or other instruments in writing, including through a unilateral declaration. If the Labuan trust is created through a unilateral declaration, the declaration shall be done in writing by a Labuan trust company or Labuan managed trust company who is a trustee of the Labuan trust and shall cover the following areas:
6.1.1 The Labuan trust company as a trustee to the Labuan trust;
6.1.2 The name of the Labuan trust;
6.1.3 The terms of the Labuan trust;
6.1.4 The names or information enabling the identification of all beneficiaries; and
6.1.5 Complying with all the requirements of the LTA.
6.2 A Labuan trust may opt to be registered under LTA using the following forms:
6.2.1 A Labuan trust registered under LTA:
a. Form 1 – Application for Registration of a Labuan Trust.
b. Form 2 – Declaration by a Labuan Trust Company as Trustee.
6.2.2 A Labuan Islamic trust registered under LIFSSA:
a. Form 3 – Application for Registration of a Labuan Islamic Trust.
b. Form 4 – Declaration by a Labuan Trust Company as Trustee.
6.3 The registration of the Labuan trust and any subsequent changes made must be made by the Labuan trust company by submitting the following documents as required under Section 12(3) of LTA:
6.3.1 A statement containing the following:
a. The name of the Labuan trust;
b. The date of its creation;
c. The name and address of the Labuan trust company acting as trustee;
d. The address of the registered office of the Labuan trust;
e. The proper law of the Labuan trust; and
6.3.2 A declaration by the Labuan trust company or Labuan managed trust company, which are acting as trustee of the Labuan trust, that the trust satisfies the conditions of the LTA.
Guidelines on the Establishment of Labuan Trust and Islamic Trust Page 4/8
6.4 The Labuan trust may exist for a fixed period or in perpetuity as specified by the terms of the trust. The terms of the Labuan trust may also authorise the trustee to undertake the following with regard to the duration of the Labuan trust:
6.4.1 Appoint a fixed duration to a Labuan trust;
6.4.2 Convert a Labuan trust with fixed duration to perpetuity; or
6.4.3 Alter, by limiting or extending the duration of the Labuan trust.
7.0 Beneficiaries of a Labuan Trust
7.1 The Labuan trust is not valid if there is no beneficiaries identifiable or ascertainable unless the trust is a charitable Labuan trust. A beneficiary shall be identifiable by name or ascertainable by reference to a class or relationship to some persons. In
addition, the trust instruments of the Labuan trust may include the following:
7.1.1 The addition of a person as a beneficiary;
7.1.2 The exclusion of a beneficiary from a benefit;
7.1.3 The imposition on a beneficiary of an obligation as a condition for a
7.1.4 The power to declare that any person shall cease to be a beneficiary.
7.2 A settlor or a trustee may also be a beneficiary of a Labuan trust unless he is the sole trustee.
8.0 Trustees of a Labuan Trust
8.1 The appointment of trustees of the Labuan trust shall be provided in the trust
instrument and subject to the following:
8.1.1 If it is the sole trustee of the Labuan trust, it shall be the Labuan trust company or Labuan managed trust company.
8.1.2 If there are many trustees, one of the trustee shall be the Labuan trust company or Labuan managed trust company.
8.2 The trustee shall be responsible for the administration of the Labuan trust including maintaining the list of settlor and beneficiaries pursuant to requirement under
Section 30(4) of LTA.
8.3 The trustee may also be the settlor or beneficiary of the Labuan trust provided that he is not the sole trustee.
Guidelines on the Establishment of Labuan Trust and Islamic Trust Page 5/8
8.4 A trustee shall have all the powers of a beneficial owner in relation to the trust
property and exercise his powers in the interest of the beneficiaries in accordance
with the terms of the trust and provisions of the LTA. In addition, the trustee shall
also undertake the following:
8.4.1 Insure any property which is subject to the trust against risks of loss or damage due to any event;
8.4.2 Pay the premiums out of any income or capital funds of the trust; and
8.4.3 Review the investments of the trusts having regard to the standard
investment criteria, periodically.
9.0 Property of a Labuan Trust
9.1 The property of the Labuan trust includes the following:
9.1.1 Assets of every kind whether corporeal or incorporeal, movable or
immovable, tangible or intangible, however acquired; and
9.1.2 Legal documents or instruments in any form, including electronic or digital,
evidencing title to or interest in such property.
9.2 The property of the Labuan trust is to be utilised solely for the purposes and objects
stated in the trust instruments and may also include Malaysian property.
9.3 For Malaysian property, prior approval of Labuan FSA is required. The qualifying
criteria for approval shall include but not limited to the following:
9.3.1 Obtain all necessary approvals from the relevant authorities in relation to
the vesting of properties to the trust;
9.3.2 Properties to be vested shall be unencumbered unless necessary consents
have been obtained; and
9.3.3 Properties to be vested shall be obtained through lawful means.
9.4 The properties vested or to be vested to the Labuan trust must include consent letters from relevant authorities (where necessary) which may include the respective land office or local authorities such as Bank Negara Malaysia, Companies Commission of Malaysia and Securities Commission of Malaysia.
9.5 Malaysian settlors are free to vest Malaysian property to a Labuan trust as permitted by Foreign Exchange Administration (FEA) rules issued by Bank Negara Malaysia. However, Labuan non-charitable trust are required to provide in the trust instruments that any subsequent conversion or transfer of the vested property for investment abroad would need to comply with FEA rules. Guidelines on the Establishment of Labuan Trust and Islamic Trust Page 6/8
10.0 Operation of a Labuan Trust
10.1 All submissions for the registration of a Labuan trust must be filed through the Labuan trust company that also functions as a trustee of the Labuan trust.
10.2 The registered office of a Labuan trust shall be the registered office of the Labuan trust company or Labuan managed trust company which has been appointed as trustee of the trust and shall be the address for service of any documents relating to the trust.
10.3 The accounting records and other records shall be kept at the registered office ofthe Labuan trust.
10.4 Every Labuan trust shall ensure compliance with the Anti-Money Laundering, AntiTerrorism Financing and Proceeds of Unlawful Activities Act 2001.
10.5 All Labuan trust companies and Labuan managed trust companies are required to submit a status update on Labuan trusts in which they are the trustees to Labuan FSA on half-yearly basis as per the Appendix.
11.0 Labuan Islamic Trust
11.1 A Labuan Islamic trust can be established under Section 105 of LIFSSA and all the provisions of LTA shall apply to a Labuan Islamic trust unless specifically provided. The object, purpose and activity of a Labuan Islamic trust must be in compliance with Shariah principles. The creation of a Shariah compliant trust is to provide an alternative for a settlor to exercise his rights in creating a trust in accordance with the Shariah principles.
11.2 The trustee of a Labuan Islamic trust is required to appoint or consult a Shariah adviser to advise matters relating to the operations of the Islamic trust to ensure compliance with Shariah principles.
11.3 The vesting of the property into the Labuan Islamic trust may be facilitated through Hibah or Hadiah as guided by the Shariah Resolution of the Shariah Supervisory Council of Labuan FSA on Labuan Islamic Trust issued by Labuan FSA. Guidelines on the Establishment of Labuan Trust and Islamic Trust Page 7/8
12.0 Payment of Fee for a Registered Labuan Trust
12.1 A Labuan trust that opts for registration is required to pay a one-off registration fee
amounting to RM750 to Labuan FSA.
13.0 Submission for Registration and Enquiries
13.1 Any submission of application or enquiries on the establishment of a Labuan trust may be forwarded to the following contact details:
Business Management Department
Labuan Financial Services Authority
17th Floor, Main Office Tower
Financial Park Complex
87000 Federal Territory of Labuan
Telephone no. : 087 591 200
Facsimile no. : 087 453 422 / 413 328
E-mail : email@example.com
Labuan Financial Services Authority
2 March 2015
Guidelines on the Establishment of Labuan Trust and Islamic Trust Page 8/8
What is Labuan Trust Company
A Labuan Trust organization alludes to an organization that is enrolled under the Labuan Companies Act 1990 (LCA) and authorized by the Labuan Financial Services and Securities Act 2010 (LFSSA) to complete business and activity of a trust organization.
We, Law & Commerce Trust Limited, is an enrolled Labuan Trust Company under the LCA and authorized under the LFSSA.
It is a prerequisite under the LCA that a Labuan organization is required to utilize the administrations of a trust organization to go about as the operator to consolidate or enlist a Labuan organization under the LCA.
A benefit proprietor set-up a Trust as an approach to care for his/her advantages. The proprietor in a Trust relationship is known as a Settlor, sets up a lawful course of action with (at least one) Trustee. The Trustee is made legitimately capable, to hold and deal with the benefits for the Trust's Beneficiaries, as indicated by the Trust Deed
Utilization and motivation behind seaward trust organizations
Labuan trust is an adaptable lawful structure and vehicle that can shield your riches past the span of loan bosses for cases emerging from negligence, mishap or even a separation just to give some examples.
Keep the riches and cash in the family, as domain and progression arranging
Otherwise called a line trust or a "family bank" to protect the riches for the family and the numerous ages to come later on
Arrangement to keep a conceivably high-roller tyke from wasting the legacy by setting up a specific structure
Likewise with regards to domain and progression arranging, this can spare your beneficiaries from conceivably an enormous aggregate of legacy and home expense
Set up a disaster protection trust to save riches and any returns won't be assessable
The referenced above might possibly be pertinent in light of the fact that individuals have various prerequisites and circumstances.
It is ideal to get in touch with us and enable us to exhort you on the most ideal way you can accomplish your goals by utilizing a Labuan trust. Don't hesitate to get in touch with us today for a free counsel.
Law & Commerce Trust Limited
Block B, Level 5, Unit 2, Jalan Yap Kwan Seng, Kampung Baru, 50450 Kuala Lumpur, Wilayah Persekutuan Kuala Lumpur
Direct: +6013-208 2007
Phone: +6 03 2161 3430
Fax: +6 03 2161 3485
Monday to Friday (UTC+8)
09:00-12:30 & 14:00-17:00
Law & Commerce Trust Limited
Lazenda Commercial Centre Phase 3, Level 2, Lot 19, Jalan Okk Abdullah, Bandar Labuan, 87000 Labuan, Wilayah Persekutuan Labuan
Direct: +6013-208 2007
Phone: +6 087 421 644
Fax: +6 087 421 646
Monday to Friday (UTC+8)
09:00-12:30 & 14:00-17:00