Before 2010, there were some restrictions in using Labuan foundations as wealth planning jurisdiction. Today, those restrictions have been removed. Malaysian can set up Labuan Foundations and Malaysian assets can form part of the foundation assets. However, this is subjected to regulators’ consent (because there is a clause saying if Malaysians are parking Malaysian assets into the foundation they would need to get regulators’ permission. Reason: Some Malaysian assets carry lot of issues like different states having different policies.) Regulators in Labuan do not have a specific procedure in giving this consent. They just want to know what they are parking and have gone through the valid transferring process and mechanisms.

Watch this video of Mr. Vijayan Ramanjulu (Founder Member and Senior Manager Trust Services of Kensington Labuan) explaining about the salient point

Purpose can be either charitable or non/charitable or combined. Still, at Kensington they do not encourage clients to use foundation for commercial activities. This is simply because the purpose of setting up foundation eliminates risk and using foundation for such activities defeats this purpose. You want to use structures as assets building vehicle and not transaction making vehicle. Should things go wrong, anything in the foundation gets attached. Assess the risk carefully before used for charitable or non charitable purposes.

Duration – can be fixed or subject to achieving its purpose. It can be fixed or upon achieving its purposes.

Taxation – only relevant if used as a trading vehicle.

Unenforceability of foreign judgment – Malaysians who were trading overseas would not have to worry about their assets in the foundations getting attached should things go wrong. Any orders to attach assets won’t be valid to Labuan. That order has to gone through Malaysia judicial system first.

For Founder Method members, you can watch the full recording of the live session here:

LabuanTrust


KCLau
KCLau

Personal finance author and trainer

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