Setting Up a Private Fund in Labuan

Setting Up a Private Fund in Labuan

If you are seeking for the right jurisdiction to set up a Private Fund, be it a direct investor as an individual or a private entity, Labuan is one of the most suitable places to begin with. Labuan or Malaysia as a whole, is an appealing business destination as it offers various choices when investing in this region. The Labuan Financial Services Authority (Labuan FSA) provides the opportunity of registering a private fund, that can be set up base on the size of investors. The required fund size raised are mainly for investment and/or acquisition purposes in:-

  • hares / equities;
  • real estates;
  • land purchases;
  • research projects;
  • development projects;
  • technology; and
  • acquisitions.

Prior to establishing a private fund in Labuan, let us begin to understand the legal framework and requirements for the set-up.

Requirements for Registering a Labuan Private Fund

If you are a foreign investor, you will first have to establish a Labuan Company which can be established through an individual person, a corporation, a partnership or a foundation. Prior to launching the Private Fund to the investors, the Information Memorandum (Prospectus) has to be registered with Labuan FSA. One of the pre-requisites information required is to ensure the minimum investment amount per investor meets the type of Private Fund you are applying for.

Types of Labuan Private Fund

  • Labuan Private Fund (Small Group), minimum MYR 250,000 per investor and it is kept at 50 investors only
  • Labuan Private Fund (Big Group) – minimum MYR 500,000 per investor and it can be any number of investors

Benefits of a Labuan Private Fund

  • FLEXIBLE STRUCTURE– in the form of Labuan company, partnership, protected cell company, foundation or unit trust
  • Support Multiclass Fund – multi currency / asset class
  • HASSLE FREE SET UP Hassle Free Set-Up – entry and exit
  • Low Minimum Capital – requirement per investor!
  • Low tax at only 3%!
  • No tax for Investment Holding structure
  • Investment in Malaysia is permissible
  • Fund manager service is optional
  • No foreign exchange controls
  • No withholding tax
  • No capital gain tax
  • No inheritance tax

Without doubt, being registered in a whitelist jurisdiction, Labuan offers a competitive edge coupled with a robust and efficient model for fund raisers, angel investors as well as venture capitalists to conduct its fund raising activities legally in the most tax efficient manner. Contact our Consultants at +60 3 9212 6940 or consultant@qx-trust.com to find out how to structure and legalise your fundraising activities via a Labuan Private Fund.  Alternatively, you may obtain more information at www.qx-trust.com.