FAQ
01
What are the registration and operational requirements for a trust company?
The applicant for a Labuan trust company licence shall:
- Register itself as a trust company and must be a company incorporated or registered under the Labuan Companies Act 1990 (LCA). The name of the company shall include the word “Trust”, “Trustee” or other such words as approved by the Registrar;
- Provide a business plan covering types of products and services to be offered, target market, management team, manpower planning and three years’ financial projections;
- Have a capital or working funds of at least RM150,000 or its equivalent in any foreign currency;
- Have a professional indemnity insurance of not less than RM1 million or its equivalent in any foreign currency;
- Ensure the directors and officers designated as trust officers are fit and proper persons responsible for the management of the Labuan trust company in Labuan;
- Provide a letter of guarantee or undertaking to Labuan FSA for the liability of the Labuan trust company; and
- Appoint at least two approved trust officers, one of whom is domiciled in Labuan. The trust officers are employees of the trust company who have been approved by Labuan FSA as trust officers.
02
Are there any specific requirements relating to trust officers?
Yes. A trust officer should be:
- An advocate and solicitor or a person who possesses a degree in law;
- A member of the Malaysian Institute of Accountants or any other association of accountants approved by Labuan FSA;
- An associate/fellow of any association of bankers, insurers, company secretaries or similar bodies;
- A person who has had uninterrupted service of not less than 10 years in any public service or statutory body; or
- Any other person comparable to the above.
03
What is a Labuan managed trust company?
A managed trust company (MTC) is a trust company registered under the Labuan Companies Act 1990 (LCA), and is managed by a fully-operational trust company in Labuan.
The MTC is set up by a parent company to provide offshore trust services to its clients, while being managed by a third party (a locally-licensed trust company). This allows the parent company to extend its product offerings to its clients without having to set up or maintain a presence in Labuan, thus avoiding the substantial expense and fixed costs of establishing, resourcing and equipping a new office.
In addition, the MTC would enjoy access provided by the managing company to specialists and experienced professionals who have existing relationships with local regulators, thus allowing the parent company to establish an offshore presence while maintaining its high standard of service.
The MTC is set up by a parent company to provide offshore trust services to its clients, while being managed by a third party (a locally-licensed trust company). This allows the parent company to extend its product offerings to its clients without having to set up or maintain a presence in Labuan, thus avoiding the substantial expense and fixed costs of establishing, resourcing and equipping a new office.
In addition, the MTC would enjoy access provided by the managing company to specialists and experienced professionals who have existing relationships with local regulators, thus allowing the parent company to establish an offshore presence while maintaining its high standard of service.
04
What is a Labuan private trust company?
A Labuan private trust company is a Labuan company or foreign Labuan company registered to undertake the services of a trust company for the purpose of a private trust(s) created by a settlor or individuals connected to the settlor described in the trust instrument creating the private trust.
05
How is the income of a Labuan company licensed as a trust company taxed?
The rate of tax imposed is 3% of audited net profits.
06
What is the governing legislation for Labuan trust companies?
Labuan trust companies are governed by the following Labuan laws:
- Labuan Financial Services and Securities Act 2010;
- Labuan Islamic Financial Services and Securities Act 2010;
- Labuan Companies Act 1990; and
- Labuan Business Activity Tax Act 1990.
07
What are the fees payable by Labuan trust companies in Labuan IBFC?
The fees payable are illustrated in the table below:
Fees
Amount
Processing Fee
USD350
Annual Fee
Amount
Trust Company
USD5,000
Managed Trust Company
USD5,000
Labuan Private Trust Company
USD1,500
All licensees are required to pay to Labuan FSA annual licence fees on or before 15 January of each year.
