What is a Private Fund?

A private fund is a form of investment through an investment company which does not solicit capital from retail investors or the general public. Members of a private investment company usually have grave knowledge of the industry and investments elsewhere too. There is a benefit to maintaining Private Investment Fund status, as the regulatory and legal requirements are much lesser than what is needed for funds which are traded publicly.

Benefits of a Private Fund

Significant ways private equity adds value to your business :-

Cash infusion: Private equity (PE) groups have deep pockets and can offer the financial resources to fuel growth. These firms can offer the capital needed to renovate a facility, purchase new equipment or launch a marketing effort.

Expertise: PE can supply the talent your business is not specialised in. These are usually hands-on or specialised groups to help you meet new business targets and optimise company’s worth.

They offer experts who will roll up their sleeves and work alongside you, whether that means launching online distribution, securing a government contract or filling some other essential need in your business.

Connections: Some PE groups host annual mastermind events. Designed for CEOs and company leaders, these sessions are an opportunity to share ideal practices and emerging trends. The suitable PE firm is your path to a new community of peers and worthy business connections.

Management incentives: If you are seeking to reward your management team, Private Equity is one way to do that. PE investors want to ensure your management team, with all their experience, will stick around. They often give equity and worthwhile incentive programs to make that happen.

Proven returns: Private equity firms are experts at creating worth by offering guaranteed returns of investments to investors.

Commitment to success: PE firms have their own vested interests in ensuring your business does well. If a PE firm obtains or invests in your company, you can count on their commitment to make sure its future is successful.

What is a Public Fund?

A public fund is money from the government, corporate entities or associations, to help the public through goods and services for a specific cause, usually for a humanitarian or charitable cause. The funds are collected and distributed on various levels to local or foreign beneficiaries. Public funding aids in offering health programs, community services, restoration programs, public service programs, and even environmental programs. These programs provide relieve to the members of the community in which the funds are administered. In some countries, the government use the tax payers money to help maintain and improve social economic and infrastructure development needs.

Benefits of a Public Fund

Public fund aims to help raise large amounts of money. Once you have obtained one funding (or a grant), it is easier to receive others. Receiving grants is an excellent way to improve visibility and credibility for your organisation. The guidelines for receiving public funding are clear and usually simple. A public fund can open doors for other private funders as well. Proposals for financing often carries other successful funding track records, which in return offers a higher convincing power and provides assurance to secure public funding effectively.

Differences of a Labuan Private Fund and a Labuan Public Fund

Description	Private Fund	Public Fund
Types of Entity Eligible to Register	Labuan Company / LLP / PPC	Labuan Company / LLP / PPC
Minimum Amount Per Investor	Minimum MYR 250,000 for less than 50 investors Min. MYR 500,000 for more than 50 investors	No limit on amount and number of investors
Currencies	Any currencies including MYR	Any currencies including MYR
Audit Report	Optional	Must report to LFSA on a yearly basis
Tax Rate	3%	3%
Custodian / Trustee	Optional	Yes, to appoint at least one
Fund Manager	Optional	Yes, with regular reporting
Memorandum of Information for Labuan FSA Approval	Required	Required
Termination of Fund Report	Required	Required
Crowd Funding Permission	Not Allowed	Allowed
Public Promotion	Not Allowed (Strictly Private Invitation)	Allowed

 

QX TRUST provides the following services that are customised to meet any fund-raising objectives :-

• Preliminary evaluation of the investment strategy and business considerations
• Feasibility study write-up based on client’s profile
• Assistance with the selection of an appropriate entity for the fund
• Advice in relation to jurisdictional regulations
• Advice on the fund structure
• Review the fund prospectus / offering documentation and agreements
• Distribution of offering circulars to prospective investors
• Processing share issues and redemptions
• Maintaining the principal accounting books and liaison with auditors
• Disbursement of dividends, fees, directors’ salaries, overheads etc
• Holding and keeping minutes of shareholders’ and board of directors’ meetings
• Addressing and submission of regulatory compliance

Should you be planning to raise fund for your business or investments or to manage funds from investors, Labuan would be the ideal jurisdiction for this purpose as it is governed by a robust offshore and tax framework which makes fund raising very affordable and legal. For more detailed information on Private and Public Funds, consult the experts at QX Trust at +60 3 9212 6940 or consultant@qx-trust.com for a complimentary session today.