WHAT TYPES OF FUNDS ARE ALLOWABLE UNDER LABUAN REGULATIONS?

The Labuan Financial Services and Securities Act 2010 (LFSSA) makes provision for two types of funds; private and public. Private funds are defined as those funds whose shares are (a) not offered to the general public, are owned by not more than 50 investors, and where the first time investment of said investors is not less than MYR250,000 or its equivalent in any foreign currency, or (b) owned by any number of investors, where the first time investment of each of the given investors is not less than MYR500,000 or equivalent in foreign currency. Any fund designated by the Prime Minister as being private also falls into this category.

WHAT FEES ARE PAYABLE BY A FUND MANAGER?

The annual licence fee payable to Labuan FSA is as follows:

• For companies that operate from outside Labuan: MYR10,000
• For companies that operate from within Labuan: MYR5,000

ARE THERE ANY OTHER STIPULATIONS?

The paid-up capital of a fund manager carrying on fund management activities in relation to a public fund shall be at least an amount equivalent to MYR300,000 in any other currency.

A fund manager who is carrying on fund management activities in relation to a private fund only is not required to be licensed under the Labuan Financial Services and Securities Act 2010.

WHAT IS THE DEFINITION OF FUND MANAGEMENT COMPANIES?

Sections 40 to 44  of the Labuan Financial Services and Securities Act 2010, contains detailed requirements and prerequisites applicable to a Labuan fund management company.

The Act defines a fund management company or manager as a person, who for valuable consideration, provides management services and/or investment advice, or administrative services in respect of securities for the purposes of investment, investment advisory services, fund manufacturing services or such other activity as may be prescribed by Labuan FSA.

WHAT ARE THE REGISTRATION REQUIREMENTS FOR FUND MANAGEMENT COMPANIES?

All applications for setting up a fund management entity should be directed to the Director General, Labuan FSA and should include, amongst others the following:

• The application may be made by a company incorporated or registered under the Labuan Companies Act 1990;
• Written permission sought pursuant to Section 40 of Labuan Financial Services and Securities Act 2010 to conduct fund management business by completing Form 3/FM, ‘Application for a Fund Manager’s Licence/Registration’.
• Once approved, the fund manager’s details shall be entered into the register detailed under Section 52 of the Labuan Financial Services and Securities Act 2010;
• Permission to set up shall be given in writing by Labuan FSA to a fund management company licensed or qualified in a recognised country or jurisdiction as detailed below.

Please click on Guidelines under Mutual Funds to find out more details about any other requirements including the fees.

WHO MAY PROVIDE FUND MANAGEMENT SERVICES IN LABUAN IBFC?

Any bank licensee or trust company in Labuan may do so. Licensed fund management companies from recognised jurisdictions, or any company set up by individual fund managers who are licensed by the relevant home supervisory authorities may be permitted, provided they receive written approval from Labuan FSA.

HOW MAY FUNDS BE STRUCTURED?

Funds may be structured as Labuan companies or corporations incorporated under the laws of any other recognised country or jurisdiction, partnerships, protected cell company, foundation or unit trusts.