Labuan Structures
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Overview
Partnerships may be corporations except for those which are set up for professional practice, in which case it must consist of natural persons. There are two types of partnerships in Labuan IBFC, namely Labuan Limited Partnership (LP) and Labuan Limited Liability Partnership (LLP). The minimum number of partners for a LP is two partners, i.e. one general partner and one limited partner. The maximum number of partners allowed is fifty partners, who operate or manage a business together.
A general partner will have all the rights and powers and would be subjected to all the restrictions and liabilities of a partner. Therefore, they have management control; share the right to use partnership property; share the profits of the firm in predefined proportions; and have joint and several liability for the debts of the partnership. Whereas a limited partner shall contribute capital to the partnership but not participate in the daily operations of the partnership. The limited partner shall not be liable as a general partner unless the limited partner participates in the management of the Labuan LP.
A partnership can undertake either a conventional business or one which is shariah-compliant.
Application Procedure
Applicant must appoint a licensed Labuan trust company as its incorporation agent.
Frequently Asked Questions
A limited partnership (LP) is a business entity comprising two or more partners who operate or manage a business together. The minimum number of partners for a Labuan LP is two partners, ie one general partner and one limited partner, and the maximum number of partners allowed is 50 partners.
Partners may be a corporation except for firms which are set up for professional practice, in which case it must consist of natural persons only and supplemented with professional indemnity insurance coverage issued by an insurer approved by Labuan FSA.
A limited liability partnership (LLP) is a business entity comprising two or more partners who operate or manage a business together. An LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership. It is capable of entering into contracts and holding property in its own name.
The minimum number of partners for a Labuan LLP is two partners, ie one designated partner and one limited partner.
A Labuan LLP is a type of business entity that permits a partner to be shielded from liability for partnership obligations created by another partner's, or person's misconduct.
Labuan LPs and Labuan LLPs are governed by the Labuan Limited Partnerships and Labuan Limited Liability Partnerships Act 2010.
The rate of tax imposed is 3% of audited net profits.
The distributions made by a Labuan LP and Labuan LLP to its partners are tax-exempt.
What You Need to Know
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