Labuan International Business and Financial Center (Labuan IBFC) is a leading hub for worldwide cross-jurisdictional wealth planning. It offers a wide array of structures dedicated to wealth creation and preservation for high-net-worth individuals, encompassing both conventional and Islamic frameworks. The Labuan private foundations are governed by the Labuan Foundations Act 2001, which allows them to allocate their assets for charitable or non-charitable purposes.

In recent years, the offshore private foundation has been gaining popularity in Asia, catching up to the European exposure of over a century. It is recognized as a distinct legal entity, unaffected by beneficiaries’ involuntary bankruptcy. Additionally, a private foundation provides protection against foreign claims and cannot be forcefully liquidated to settle claims resulting from divorce, lawsuits, or creditors. Another advantage of a Private Foundation in Labuan is its ability to hold assets and various businesses under a single legal entity, either for the benefit of the beneficiaries or for family business succession. Furthermore, offshore private foundations in Labuan are typically exempt from taxation unless they engage in business activities or profitable investments, in which case the income derived is taxed at a rate of 3% after net profit.

Key tax profile of a Labuan private foundation:

• 0% tax on profits distributed to beneficiaries
• 0% tax on interest earned from deposits in Labuan offshore banks
• 0% corporate tax for investments in a holding company
• 0% withholding tax on interest, management fees, royalty, and technical fees
• Ability to access more than 70 international tax treaty partners
• Corporate tax of 24% for revenue derived from Malaysia
• No foreign exchange control for global banking transactions

Prior to establishing an offshore private foundation, the individual or Founder must define the foundation’s purpose and guidelines. This step is crucial for determining the foundation’s structure and tax treatment.

Steps to initiate an offshore private foundation in Labuan:

1. Define the structure, objective, and beneficiaries of the foundation, and appoint a licensed Labuan Trust Company to aid in the incorporation of the Labuan private foundation.
2. The Labuan Trust Company will then submit all necessary documents to the Labuan Authority for approval.

At RegisterLabuanCompany.com, our team of private wealth experts is well-equipped with years of experience to assist clients in incorporating their Labuan foundation for charitable purposes and comprehensive estate planning for family business succession. If you have any doubts about how an offshore private foundation in Labuan can benefit you, reach out to us today. Let our private wealth consultants assist you in designing your ideal private foundation to secure your future generations.

Contact us at +60189887883 to arrange a complimentary consultation.