A Guide to Venture Capital Investment in Labuan

A Guide to Venture Capital Investment in Labuan

Venture capital is a private or type of financing that is made into early-stage or startup companies that are believed to have long-term sustainability. The individuals who contribute to this capital are called venture capitalists. The funding speculation is made when an investor purchases portions of an organisation and turns into a budgetary accomplice in the business. Venture Capital usually comes from institutional spectaculars and high net worth individuals and is pooled together by an investment firm.

Although it can be risky for investors who invest in funds, the potential for average returns is an attractive payout. For new companies or startups that have a limited operating history, venture capital funding is increasingly becoming popular and even essential. Labuan jurisdiction in Malaysia is one of the most preferred places to get started for foreign investors considering to become a venture capitalist, especially if you want to target within the Asia Pacific region. Since venture capital invests more significant amounts in some companies, background research is vital. Many venture capital professionals have had prior investment experience as equity or research analyst and also tend to focus on certain industries. For instance, a venture capitalist that specialises in healthcare may have had prior experience as a healthcare industry analyst.

Depending on the objectives and type of investors, Labuan offers two types of investments for:

  • Collective investment to spread out the investment risks
  • Issues interests in a mutual fund to compel the holder to redeem the investments agreed upon and receive an amount computed by reference

The private fund is used by investors to create a collective pool of monies to be invested in various objectives as follows:

  • Equities and shares
  • Forex and money market
  • Commodities
  • Real estates
  • Land acquisitions
  • Business projects
  • Business acquisitions
  • Development projects

It is easy and straight forward to start a Labuan Private Fund, with just a notification of fund Information Memorandum (Prospectus) and some other requirements would suffice for the necessary application to the Labuan FSA.

Requirements for Labuan Private Fund Registration:

  • The information memorandum with complete information related to the description of the date of issuance, purpose, name, address, legal form, and structure, etc
  • An investment strategy with the relevant investment policies and objectives, type of securities in which you intend to invest, investment and borrowing limitation, etc
  • Financial forecast including the financial projection of funds
  • Redemption policies including the process of redemption, timing and events, subscriptions of the unit of the fund
  • Material changes that include any change which materially affects the matter required to be disclosed in the information memorandum

Labuan Private Fund company can be set up using several setup structures under a Labuan Foundation and/or Trust, partnership, etc. At QX Trust, we offer all-in-one services, from the promoter’s proposal to the successful implementation and administration of investment funds and customised to meet your fund objectives. Our team is well-versed in providing assistance and guidance for setting up Private Equity in Labuan, Malaysia. Feel free to reach us for a complimentary consultation at +60 3 9212 6940 or consultant@qx-trust.com . For more information, visit https://www.offshore-labuan.com/private-fund/