Wealth management and associated investment activities remain key areas of focus within the Labuan jurisdiction. The objectives of this discipline are to provide high net-worth individuals and families with tailored financial solutions across a wide range of specialities, including asset protection, estate planning, legal resources, taxation advice, investment management and tailored banking solutions with the goal of sustaining and growing long term wealth.
Labuan works in concert with private banks and investment advisory firms in major worldwide wealth management centres such as Singapore, Hong Kong, Dubai and Switzerland to provide a sound, cost-effective domicile for managing assets for high net worth individuals and families.
In Labuan, common structures for wealth management include trusts, foundations, private funds and investment holding companies. While foundations are required to be registered with Labuan FSA, trusts within the jurisdiction are not. Neither are the Trust companies who act on behalf of these clients required to submit information regarding the number or nature of the assets invested in such trusts.
With the promulgation of new legislation in Labuan IBFC effective from 11 February 2010, additional structures have also been made available. Under the new Labuan Trusts Act 2010, the type of trusts that may be created has been expanded with their duration in perpetuity being allowed. One of the most modern types of trust that should appeal to those with a financially viable business is the Labuan Special Trust (LST) in which a trust of company shares can be established. An important feature of the LST is that it allows for the management of the company to be carried out by directors without any power of intervention being exercised by trustees. Furthermore, the designated share covers not just Labuan companies but also interests in Labuan limited and limited liability partnerships and foundations.
These are covered under the new Labuan Financial Services and Securities Act 2010 while under the radically amended Labuan Companies Act 1990, Labuan Protected Cell Companies have been introduced. For those who subscribe to Islam, all these structures – including Trusts and Foundations – can be applied in an Islamic manner so long as they are Shariah compliant.