Services: Characteristics Of A Labuan Trust

Labuan Trust

Characteristics of a Labuan Trust:

  • The Settlor of a Labuan Trust must be a qualified person or a resident who can retain certain wide powers including revoking, amending or varying the terms of the trust

  • The beneficiaries of a Labuan Trust must also be a qualified person or a resident

  • At least one of the trustees of a Labuan Trust must be a Labuan Trust Company, however a trustee cannot also act as an Enforcer, instead a settlor or his representative may act as an Enforcer

  • Where a trust property includes a Malaysian property, prior approval must be obtained from Labuan FSA to include the Malaysian property into the trust. Once approved, any income derived from the said Malaysian property is subject to Malaysia's Income Tax Act 1967. In comparison, all foreign property income shall be subject to Labuan Business Activity Tax Act 1990

  • The duration of a Labuan trust may be prescribed, failing which a 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

  • A Labuan Special Trust is a trust that owns shares in an underlying asset holding vehicle on an "own and retain" basis. This allows for the separation of the custodianship of the assets from the investment of the assets. This form of trust is ideal for succession or dynastic planning as well as for matrimonial settlements

  • The Act allows the Settlor to provide a letter of wishes, in addition to provisions contained in the Trust Deed

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