A Labuan foundation must be registered and have a registered office. The administration and operations of a foundation are carried out in accordance with contractual rather than fiduciary principles. Similarly, all relationships within a foundation are contractual and are governed by its governing documents. The charter sets out the parameters within which the Labuan foundation is to be managed and governed.

The key management of a Labuan foundation shall consists of a council, an officer and a secretary. The council is responsible for the general supervision of the foundation’s management and ensuring that the purpose of the foundation is fulfilled in accordance with the charter, articles and the law. The duty and responsibility of a council is similar to the board of directors of a company.

The officer is responsible for ensuring the proper administration of the foundation and the secretary shall performs all secretarial functions including the filing and lodging of documents with Labuan FSA.

Assets placed in the Labuan foundation are owned by the foundation and are to be applied only for the benefit of the identified purpose. However, these assets must be non-Malaysian properties unless it is a charitable foundation or approved by Labuan FSA.

The beneficiaries can be individuals, corporate entities or charities and are those who have a vested interest in the assets of the foundation. Unless specifically provided in the charter or articles, beneficiaries have no rights to the foundation’s assets and are not owed any fiduciary duties.

A Labuan foundation can be dissolved upon the passing of a resolution by the officer on the basis that the foundation is established for a definite period and that period has expired or when the purpose of the foundation is fulfilled or becomes incapable of fulfilment or when the charter requires such dissolution. After the dissolution, the ownership of the remaining assets will be transferred to the beneficiaries. In a nutshell, a Labuan Foundation shall consists of the following:

• Register Office
• Charter
• Key Management
• Asset
• Beneficiary
• Dissolution

We invite you to contact our team of consultants in company formation in Malaysia for more details registering and structuring of a Labuan foundation.