Labuan Foundations provide flexibility and legal protection for both corporations and wealthy individuals
Labuan Foundations are corporate bodies that exist as legal entities, set up to manage their own property for any lawful charitable or non-charitable purpose. There also exists Labuan Islamic foundations, whose operations must be in compliance with Shariah principles.
Labuan Foundations are ideal for wealthy individuals, families, companies and non-profit organisations who wish to control their assets and business while enjoying legal protection. Typically, Labuan Foundations are used for asset protection, charitable purposes, business succession, wealth management and other legal activities.
Oversight requirements vary depending on the type of foundation, with Family Foundations (used for private succession planning) subject to minimal oversight and Charitable Foundations subject to more oversight and reporting requirements. For Charitable Foundations that accept money from the public there is more oversight and they are required to be audited and have regular reporting requirements.
One of the main benefits of a Labuan Foundation is the fact that foreigners are able to form a foundation, alongside foreign founders, management, beneficiaries and with assets from around the world. Furthermore, the names of the founder(s), beneficiaries, council members and officers are lodged with the Registrar Of Companies (ROC) of Labuan FSA, but are not available to the wider public.
A Labuan Foundation takes two to three weeks to establish, though the preparation and drafting of the main documents before the establishment of the Foundation may take longer, depending on its complexity. They do provide considerable protection, with all assets owned by the foundation cannot be seized by creditors of the founders and beneficiaries.
For succession planning, Labuan Foundations allow wealthy individuals to pass on their assets to the next generation sheltering them from inheritance and other laws.
For more information on Labuan Foundations, and how to set one up, contact Alpadis Group.