4-1. About Labuan Trust Overview


A major characteristic of trusts is duality of ownership.

Duality of ownership refers to the situation where legal ownership and beneficial ownership co-exist. For example, if Y is the name of a property purchased and invested by X, X has beneficial ownership and Y has legal ownership. In the case of a trust, the beneficiary has beneficial ownership and the trustee has legal ownership.

As a result, the trust can be expected to be an extremely useful mechanism for tax purposes, inheritance purposes, and future or potential creditor avoidance measures due to the dual nature of ownership.

Labuan trusts are of the following types:

・ Labuan charitable trust
・ Labuan protective trust
・ Labuan purpose trust
・ Labuan special trust
・ Labuan spendthrift trust

About Labuan Trust Set Up

The trustee becomes the legal owner of the trust fund and the settlor is no longer the owner of the transferred asset. The beneficiaries have vested interests and receive a distribution of profits.

The duration of a Labuan trust may be prescribed in Trust Deed, otherwise Labuan trust may exist in perpetuity. A Labuan trust may also convert from a trust with a fixed duration to one with an unlimited period, by altering the duration listed in the trust deed.

The registration for trust is optional, you may opt not to register it with the Labuan FSA. Labuan trust's information (both registered or non-registered) are confidential and no public search is available.

Distribution to trust beneficiaries is tax exempt in Labuan.

* Beneficiaries must meet their tax obligations in their respective tax residence countries.

Labuan mainly uses foundation, as Founder remain the rights on management and controls for Foundation.


4-2. About Set Up Labuan Trust


Trust Deed, and the purpose of setting up the Labuan Trust (you may fill up this information in BTC's application form), and Know-Your-Customer (KYC) Documents required for each Settlor/Trustee/Protector/Enforcer/Beneficiary

For Individual (Natural Person):-
1) NRIC (Malaysian) / Passport (Foreigner)
2) Address Proof (e.g: latest Utility bill / Statement that not older than 3 months period)
3) Two (2) Reference Letter issued by professional body (e.g: lawyer, accountant, company secretary, notary public, etc)

For Corporate Entity (Corporation):-
1) Certificate of Incorporation
2) M&A
3) List of Directors
4) List of Shareholders
5) Notice of Registered office address
6) Board Resolution for the appointment of corporate representative for the proposed Labuan Trust

*Additional documents may be requested, subject to compliance review.

Kindly contact our support team.

The name of a Labuan trust may not able be register if the name is in any way misleading or otherwise undesirable.
There are Prohibited/Restricted Words Or Phrases to be use as part of name, such as Unfavourable words (i.e: Military, Weapons, Gambling, Fortune Teller, Sex, Drugs etc) , Religious-Related Terms, Federal/State/National Words (i.e: Agency, Municipal, Government, King, Queen, Prince, Princess, Majesty, Crown, etc)

BTC's office address will be the registered address: -

Kensington Gardens, No. U1317, Lot 7616, Jalan Jumidar Buyong, 87000 Federal Territory of Labuan, Malaysia

Yes, but there will be no refund on the set up fees as all work done for the creation of trust is already took place and performed by BTC.


4-3. About Labuan Trust Renewal


Trust Annual Renewal is due by its anniversary incorporation date, and you are require to make the renewal fee payment before the anniversary due date.

Yes, but only applicable to Special Trust that registered with Labuan FSA.
If the renewal fees payment are made later than the annniversary due date, then the penalty will be imposed as follows:-
(i) USD30 : Late Payment between 1-89 day(s)
(ii) USD50 : Late Payment between 90-179 days
(iii) USD400 : Late Payment more than 180 days


4-4. About Labuan Trust Strike Off



4-5. About the position of Labuan Trust


A trustee is those who owns a trust fund and is responsible for managing it for the benefit of the beneficiary.

An Enforcer / Protector is a person who acts like a “watcher” to a trustee for the benefit of the beneficiary. May be appointed by settlor.

Beneficiaries are those who have the right to earn a profit by enforcing a trust. Individuals (possibly minors), charities, and companies can also be appointed.


4-6. Other general questions


Letter of Wishes is a certificate for the settlor to give advice to the trustee regarding matters that will affect after his/her death (especially distribution issues). Generally, when setting up a discretionary trust, the settlor always gives a Letter of Wishes to the trustee. There is no binding force on the Letter of Wishes.

Discretionary Trust gives the trustee complete discretion over the management and operation of trust assets. The discretionary trustee will have complete discretionary power in regards to (1) who will distribute what assets and when, and (2) how often.

The merit of the discretionary trust is that the discretionary power is left to the trustee, and it can be said that it is a flexible mechanism because it can be adapted to the situation of the beneficiary later.

* For actual operation, kindly consult with a tax resident country expert before setting up.

Fixed Trust is a trust certificate that clearly determines which trust assets will be allocated to whom and at what percentage. The beneficiary can get a certain level of security by confirming the contents.

However, on the other hand, it may not be very effective for tax purposes or for possible creditor purposes in the future.

* For actual operation, kindly consult with a tax resident country expert before setting up.

It is possible for both Malaysia residents and non-residents.

Any person or corporate entity may be appointed as director as long as he/it is "fit and proper" and satisfy our due diligence requirement. In principle, it means the person or corporate entity must be sound, not been adjudicated bankrupt, have not at any time been held liable in any civil suit for any fraud or misfeasance and have not at any time been convicted of any offense by any court in relation to his work, business and employment.

Is possible. However, in the case of personal assets, we recommend that you consider making a will rather than a trust.

In order to set assets in Malaysia as trusts, prior consent of Labuan FSA is required. Malaysian foreign assets can be set freely.

We cannot answer. For details, kindly contact a expert (accountant, etc.) in your country of tax residence.