Type of Foundation: Labuan Foundation may be Conventional or Islamic. A Foundation is a corporate body with a separate legal entity, established to hold assets in its own name for the purposes set out in its charter or constitutive documents, with the objective of managing its assets for the benefit of a class of persons on a contractual basis. It is typically used for private wealth management, charitable purposes, family patrimony and collective purposes. In the case of an Islamic Foundation, the foundation’s aims and operations shall be in compliance with Shariah principles.

Item(s)Description
Regulator or Registrar:Labuan Financial Services Authority, a division of the Ministry of Finance, Malaysia.
Time to Register:In most cases, a Foundation can be registered within 2-3 days.
Government’s Registration Fee: Registration charges – MYR 750 (US$253, appx)
Shelf Foundation Availability:Currently not available.
Registered Office: A Foundation must maintain a registered office in Labuan which shall be the address of the secretary to that Labuan Foundation. The administration and operations of a foundation are carried out in accordance with contractual rather than fiduciary principles.
Charter:The charter sets out the parameters within which the Labuan Foundation is to be managed and governed.
Taxation:Where assets of Labuan foundation include Malaysian property, the Income Tax Act 1967 [Act 53] shall be applicable to any income received from the Assets. Where the income derived from any non Malaysian assets, it is subject to the Labuan Business Activity Tax Act 1990 [Act 445]. The Labuan Business Activity Tax Act, taxes trading activities carried at the rate of 3% on its audited trading profits or, upon election, at a fixed rate of MYR20,000. No tax on non-trading activities.
Minimum Annual Government Fee:MYR 750 (US$253, approx) regardless of capital structure, payable every year the latest one month before the anniversary of the Foundation.
Disclosure of Beneficial Owner:Labuan adopts money laundering legislation under which all licensed service providers are required to know the identity of their customers (Know Your Customers) before accepting a transaction. Not to do so would be an offence under the legislation. Therefore disclosure of beneficial ownership will be made to the Trust Company, Bank, Insurers, etc. but not to the Authority.
Minimum Number of Founders:One and maybe a natural person or body corporation, and there is no residency or nationality requirement.
Minimum Number of Council Members:One and maybe a natural person or body corporation, and there is no residency or nationality requirement.
Officers:Minimum one and maybe a natural person or body corporation, and there is no residency or nationality requirement.
Beneficiaries:May include individuals, body corporate or charities and are those who have vested interest in the assets of the foundation. Unless specifically provided in the charter or articles, beneficiaries have no rights to the foundations assets and are not owed any fiduciary duties.
Corporate Founder:Yes/Optional.
Local Council Member: Yes/Optional.
Foundation Secretary:Yes and if more than one is appointed, at least one must be a company registered as a Labuan Trust Company under Part V of the Labuan Financial Services and Securities Act 2010
Public Record of Directors & Shareholders:No.
Location of Directors and Shareholders Meeting:Anywhere.
Access to Double Tax Treaty:With careful planning, Labuan foundations may enjoy the benefits of Malaysia’s extensive Double Tax Treaties.
Requirement to File Account: Only foundations electing to pay 3% tax. Nevertheless there is still requirement to keep accounts that will sufficiently show the financial position of the Foundation.
Requirement to File Annual Return:Yes and it is simple.