Labuan Protected Cell Companies
A Protected Cell Company is a limited company which has been separated into legally distinct cells, which allows the assets and liabilities of individual cells to be separated from one another. This flexible structure allows each cell to own part of the company’s overall share capital whilst at the same time maintaining sole ownership of its own distinct cell. Legally each Protected Cell Company is deemed a single entity.
All Labuan Protected Cell Companies are regulated under the Labuan Companies Act 1990, Part VIII(B), specifically provisions contained in Sections 130N to 130 Z(C) and are deemed Labuan Trading Companies as defined in Section 2 of the Labuan Business Activity Tax Act 1990. As such, all Protected Cell Companies have a yearly election of either paying a flat tax rate of MYR20,000 per annum, or 3 percent of audited net profits.
A Protected Cell Company is incorporated as a Labuan Company or may be converted from an existing Labuan Company limited by liability, and has the ability to form ‘cells’. These cells of a Protected Cell Company may comprise:
- A single core cell for holding non-cell assets or general assets
- Any number of cells with the intention of segregating and protecting the assets of each respective cell
As such, the provisions of the Labuan Companies Act 1990 apply with the necessary modifications required to create the cells of a Protected Cell Company. (These modifications are dealt with in the later part of this section).
Neither the core cell nor the individual cells created are deemed separate legal entities, nonetheless, each cell remains legally separated from any other cell and each has sufficient attributes to carry on business independently under the ‘umbrella’ of the Labuan Protected Cell Company.
A Protected Cell Company therefore has the ability to hold assets or investments segregated into numerous classes to cater for differing objectives of individual investors, while at the same time preserving the independence of each cell.
A Labuan Protected Cell Company can be designed to conduct:
- Insurance business
- Captive Insurance business
- Mutual Fund business
All three businesses may be conducted under either the conventional system or in accordance with Islamic principles, by ensuring Sharia compliance in all its dealings. As such Protected Cell Companies relating to Takaful, Islamic Captives and Islamic Funds, must ensure all Sharia principles relating to their businesses segments are adhered to. Please note however that the following requirements detailed below relate solely to conventional captives.
BBS Trust International Limited +60 12-360 7313
+60 12-611 0168
+60 3-7772 6333
info -at- bbstrust -dot- com