Capital Market / Public Fund
Public Fund
Public Funds are securities that are offered to any member of the public.
When lawfully registered under the laws of any jurisdiction, who is a member of IOSCO, it does not need to be registered as a public fund as long as the public fund is administered or managed in Labuan by a fund administrator, custodian, trustee or a fund manager, whom are licensed, registered or eligible to do so under LFSSA and/or LIFSSA.
However, Labuan FSA will be notified of its operations in the Labuan IBFC and lodge a prospectus of the public fund which shall include the minimum information.
Fund managers and fund administrators who carry out these functions relating to Public Funds are required to be licensed.
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Key Advantages
- Flexible structure
- Support multiclass fund
- Hassle free to set-up
- Simple tax structure
- NO withholding tax on payments
- NO foreign exchange controls
- NO capital gain tax
- NO inheritance tax
Annual Fee
All Labuan Public Funds are required to pay to Labuan FSA annual licence fees on or before 15 January of each year.
- Annual Fee - USD600
What are the requirements to operate?
- Appoint a fund manager, trustee, administrator and custodian (service provider) approved by Labuan FSA.
- Ensure that the duties of the fund manager and custodian or trustee of the Labuan public fund are independent from each other.
- Maintain a registered office in Labuan as a non-Labuan licensed fund manager is permitted to manage it, but at least one of the service providers must be approved by Labuan FSA.
- Ensure that all subscriptions are repaid immediately if the minimum level of subscription required is not met within the stipulated time.
- Conduct its business with due diligence and sound principles.
- Ensure that the shareholder and every member of the Board of Public Fund including any relevant person are fit and proper as in accordance with the guidelines in Fit and Proper Person Requirements issued by Labuan FSA.
- Maintain adequate and proper accounting and other records in line with the Directive on Accounts and Record-Keeping Requirement for Labuan Entities issued by Labuan FSA that will sufficienty explain its transaction and financial position as well as indicate clearly its names and registration number on its letterhead, stationery and other documents.
- Appoint an approved auditor to carry out an annual audit of the accounts in respect of the business operations and submit the audit report to the investors and Labuan FSA, pursuant to Section 174 of the LFSSA and Section 135 of the LIFSSA within six months after the close of each financial year.
- Provide a half yearly report to the investors, which includes, but not limited to, the following: Portfolio valuation report, showing actual portfolio mix of the fund, The net asset value of the nvestment, Independent verification/ confirmation of existence of the fund’s assets and Other pertinent information to the investor with regard to the fund’s performance.
- Notify Labuan FSA of any amendments or alterations to any of its constituent document within 30 days of the changes being effected including its business plan.
- Obtain approval from Labuan FSA for any changes to the members of the Board of the Public Fund.
- Ensure fair and orderly winding down of the matured fund including having an auditor to ensure that all assests have been properly returned to investors.
- Comply with the relevant laws and regulations of the jurisdictions, where it intends to operate including obtaining the necessary approval.
What is the application requirement?
The following needs to be submitted,
- The applicant must submit a duly completed application form and all the relevant supporting documents as stipulated in the Form LSCM.
- The submission of the memorandum and articles of association/ partnership agreement/ trust deed/ charter/ other constituent document as the case may be.
- Names, addresses, profiles and relevant experience of the director/ general partner/ designated partner/ trustee/ council member of the fund (Board of the public fund), whichever applicable. The appointment of any members of the Board of the public fund requires prior written approval from Labuan FSA.
- Profile of the promoter/ custodian/ trustee/ fund manager, whichever applicable.
- Audited annual account of the promoter and fund manager, where applicable, for the three preceding years along with the application.
- The profile of the qualified person as its Shariah adviser in the case of Labuan Islamic public fund.
- A signed declaration by the Board of the public fund on confidentiality and secrecy in regards to the operations and administration of the fund.
- A certificate from an expert as required that includes a statement certifying that the Labuan the Guidelines.
- A copy of the prospectus of the Labuan public fund which should comply with the guidelines, either in draft or in final form.
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FAQ
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.
No.
• 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.