A Labuan fund manager carrying on fund management activities are regulated under the Labuan Financial Services and Securities Act 2010 (“LFSSA”) or Labuan Islamic Financial Services and Securities Act 2010 (“LIFSSA”).
A Labuan fund manager is defined as:
a person, for valuable consideration, provides management services which may include investment advice or administrative services in respect of securities for the purposes of investment, including dealing in securities. For a Labuan fund manager undertaking Islamic fund management activities, its operation shall also comply with Shariah principles.
APPLICATION FOR FUND MANAGER LICENSE
Any person intending to undertake fund management activities may submit an application to Labuan FSA. Kensington Trust Labuan Limited is a licensed trust company in Labuan and is able to assist you with license application, establishment and administration of your Labuan company.
WHO IS ELIGIBLE TO APPLY?
- An individual who holds a relevant degree or professional qualification to carry on fund management activities. Labuan FSA may also consider an applicant with at least minimum qualification of diploma holder and 3 years’ relevant experiences in capital market or direct experiences in fund management activities;
- An approved fund manager or any provider of such services from a country or jurisdiction who is a member of the International Organization of Securities Commission (IOSCO); or
- A person who does not fulfil the above may also be considered, provided that the fund management activities are run and managed by suitably qualified and experienced individuals.
- Maintain a paid-up capital unimpaired by losses of at least RM300,000 equivalent in any foreign currency throughout its operations. Where the Labuan fund manager has Asset Under Management (AUM) of more than RM150 million, it must maintain additional capital equivalent to 0.2% of the AUM in excess of RM150 million.
- Maintain a professional indemnity insurance policy with coverage of not less than RM1 million or its equivalent in any foreign currency throughout its operations.
- Maintain registered office in Labuan. May apply for marketing office at Kuala Lumpur and/or Iskandar Malaysia.
- Conduct its business in any foreign currency other than Ringgit Malaysia unless permitted in the Labuan Companies Act.
- Appoint approved auditor.
- Submission of audited financial statements and other statistics/information to Labuan FSA.
LABUAN FUND MANAGER LICENSE FEE
Processing Fee (once-off)
RM5,000/-. The annual license fee is payable when the license is approved by Labuan FSA and remains valid until 31 December of the year of approval. All licensees are required to pay to Labuan FSA subsequently the annual license fees on or before 15 January of each calendar year.
ADVANTAGES & KEY BENEFITS OF LABUAN FUND MANAGER
- Activities carried out by a licensed Labuan fund manager are deemed as trading activities. The company may elect either to pay:-
- 3% of net profits as per audited accounts OR RM20,000/-
- ZERO withholding tax on payments of dividend and interest to non-residents.
- No stamp duty on all instruments relating to offshore business activities including share transfer.
- No import duty / sales tax.
- No foreign exchange controls.
- No capital gain tax / inheritance tax.
- Double Tax Agreements between Malaysia and over 70 countries.
- 50% tax abatement for expatriate professionals and managers employed under Labuan companies.
- 100% exemption for director’s fees received by non-citizen directors of Labuan companies.