Partnerships may be corporations except for those which are set up for professional practice, in which case it must consist of natural persons. There are two types of partnerships in Labuan IBFC, namely Labuan Limited Partnership (LP) and Labuan Limited Liability Partnership (LLP). The minimum number of partners for a LP is two partners, i.e. one general partner and one limited partner. The maximum number of partners allowed is fifty partners, who operate or manage a business together.

A general partner will have all the rights and powers and would be subjected to all the restrictions and liabilities of a partner. Therefore, they have management control; share the right to use partnership property; share the profits of the firm in predefined proportions; and have joint and several liability for the debts of the partnership. Whereas a limited partner shall contribute capital to the partnership but not participate in the daily operations of the partnership. The limited partner shall not be liable as a general partner unless the limited partner participates in the management of the Labuan LP.

A partnership can undertake either a conventional business or one which is shariah-compliant.