Wealth Management - Financial Services

Financial Services

Areas of Business:

Overview

Labuan IBFC’s comprehensive ecosystem which includes a strong set of legislations provides the needed comfort and protection for wealth management activities. The Centre also offers investors particularly affluent individuals the avenue for structuring and administering their wealth management and estate planning. Legally-established vehicles such as trusts and foundations are available to suit investors seeking for common and civil law wealth management solutions. These structures can provide a wide array of private wealth management needs and are especially suitable for family offices and wealth managers in facilitating dynamic wealth transfer, dynastic planning and inheritance management. The structures can be undertaken either via conventional or Islamic means, to meet individual preference.

Labuan Trusts
A Labuan trust is a common-law vehicle which can be used for asset preservation, protection and income distribution, making it one of the primary vehicles for wealth management. The creation of a Labuan trust is generally for an individual (settlor) to give specific property to a third party to be held for the benefit of others, including charities. The Labuan legislation allows the creation of various types of trusts including purpose trusts, charitable trusts; spendthrift or protective trusts; and special trusts.
Labuan Foundations
Labuan foundations offered by the Centre provide a wealth management solution with legal certainty to cater for the needs of high net worth individuals in the region. Labuan foundations are established either for charitable purpose or private wealth management. Charitable foundations are established for various non-profit or philanthropic purposes which include for relief of poverty, advancement of education and other social economic purposes to benefit the community. Private foundations, on the other hand, are geared towards affluent individuals looking for a civil law vehicle to manage estates and assets for their beneficiaries.

Labuan Trusts

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Labuan Foundations

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Private Trust Companies

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Frequently Asked Questions

What is Labuan Banking?
Labuan banking means the business of receiving deposits on current accounts, deposit accounts, savings accounts, and includes the investment banking business, Labuan financial business, Islamic banking business and such other transactions and terms and conditions as specified by Labuan FSA in any currency including Malaysian Ringgit where permitted by Bank Negara Malaysia.
What is Investment Banking?
Investment banking means the business of providing credit facilities and consultancy and advisory services relating to corporate and investment matters, including making investments on behalf of any person. Other activities include undertaking foreign exchange transactions, interest rate swaps, dealings in derivative instruments or derivative financial instruments or any other similar risk management activities.
What is Islamic Banking?
Islamic banking is defined as a banking business that is in accordance with Shariah principles.
Who may apply for a Labuan banking license?
Organisations that meet the following minimum criteria may apply for a Labuan banking licence:
Must be a bank or financial institution;
Possesses a sound track record;
Accorded a good credit rating by acceptable rating agencies;
Supervised by a competent regulatory authory; and
Conforms to generally accepted standards of international banking practices or the Bank for International Settlements (BIS).
What is the minimum working fund for an investment bank?
RM10 million or its equivalent in any other currency.
What products and services are currently offered by Labuan banks?
Labuan banks offer the following products and services:
Term/fixed deposits in major international currencies;
Project financing (project evaluation/feasibility studies);
Capital restructuring;
Revolving credit;
Syndication / loan arrangement;
Trade financing (letter of credit);
Islamic financing;
Performance and financial guarantees;
Private banking / portfolio fund management;
Investment banking / corporate advisory (initial public offerings (IPO), mergers and acquisitions);
Listing of financial instruments on the Labuan International Financial Exchange (LFX);
Proprietary trading and investment (bonds, equities);
Remittances;
Foreign exchange;
Foreign currency term loan;
Derivatives (interest rate swaps, cross currency swaps);
Hedging (interest rates – Chicago Board of Trade (CBOT), London Interbank-Offered Rate (LIBOR), etc); and
Correspondent banking (for Malaysian banks).
Can Malaysian residents obtain loans from Labuan banks?
With respect to trade financing, buyers and sellers can be outside of Malaysia and the underlying goods to be exported to, or imported from, other countries may also include Malaysia.