Capital Market / Private Fund

Private Fund

A private fund is a type of mutual fund whose securities are not offered to the public and are owned or held by specific investors. It can have a maximum of 50 investors, with each investor making a first-time investment of no less than RM250,000 or its equivalent in foreign currency. Alternatively, it can have any number of investors, provided each makes a first-time investment of at least RM500,000 or its equivalent in foreign currency. Private funds can be structured using a Labuan company, a protected cell company, or a foundation. They allow for a collective pool of monies to be invested in various assets, including equities and shares, Forex and money markets, commodities, real estate, business and development projects, as well as land and business acquisitions.

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Taxation: Substance Requirement under LBATA

As the business activity of a Fund is generally involved in either Pure Equity Holding or Non-Pure Equity Holding are not subject to tax with fulfilling Substance Requirements as follows,

Pure Equity Holding
To comply with management and control requirement in Labuan, the entity is to hold at least a minimum of one board meeting in Labuan for each calendar year and incur a minimum annual operating expenditure of RM 20,000 per annum in Labuan.

Non-Pure Equity Holding
To comply with minimum of ONE full time employee in Labuan and a minimum annual operating expenditure of RM 20,000 per annum in Labuan.

Failing which, the Labuan incorporated entity shall be charged a tax rate of 24% for that year of assessment.


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One share in any denomination in foreign currency except Malaysia Ringgit

Approximately 7-14 business days upon complete collection of the required documents

The director and the shareholder must be at least one person and can be the same person. It
can be fully owned by a foreigner.

A resident secretary is required.

• Trading company – please see attachment “LFSA – Code 20” for allowed activities under trading company.
• Non-trading company/investment holding – income mainly from dividend or interest.
*Kindly take note that the tax for general trading or import/export services is ranging from 15% – 24% under Malaysia Income Tax Act 1967.

• Trading company companies are taxed under Malaysia Income Tax Act 1967, which the tax ranging from 15%-24% of its profit except for Labuan licensed company. (Audit required)
• Tax for Labuan licensed company and business nature under “Code 20” is 3% of its audited net profit with fulfilled its substance requirements. (Audit required)
• Investment holding companies are not subjected to tax (0% tax) with the submission of yearly management account and fulfilled substance requirement.


• CTC of Passport
• CTC of Proof of address (such as the most recent utility bill, internet bill, insurance statement, etc)
*CTC – Certified True Copies: Certification of documents must be made by competent persons such as a notary public, solicitor, chartered secretary, or certified public accountant,
and made in accordance with the law in Malaysia or in the country where the certification was made.

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