Labuan is the official federal territory of Malaysia. It consists of Labuan Island and six other smaller islands. It is located in the eastern part of Malaysia off the coast of Sabah. Labuan is popularly referred to as an offshore financial center, which offers international, financial and business services. Although English is widely spoken in Labuan, the designated official language of Labuan is Bahasa Malaysia. Therefore, this is an ideal territory for a Labuan Funds License.
Labuan mutual funds can be in form of public funds or private funds which can take the structure of a Labuan company, partnership, a cell company, a unit trust or foundation or a corporation which has been incorporated by the laws of any recognized jurisdiction or country who is a member of the International Organization of Securities Commissions (IOSCO). Labuan Islamic mutual funds shall be operated by Sharia principles.
The act governing the Labuan mutual fund is Part III of the Labuan Financial Services and Securities Act 2010 (LFSSA), while the Labuan Islamic mutual fund is operated under Part IV of Labuan Islamic Financial Services and Securities Act 2010 (LIFSSA) as well as other related guidelines issued as issued by the Labuan Financial Service Authority. All governing guidelines are issued under Section 4A of the Labuan Financial Services Authority Act 1996 (LFSAA).
To establish and license a Labuan private fund, a written notice must be sent Labuan FSA with an information memorandum. This can be sent in through a Labuan trust company, bank including Islamic bank and Labuan investment.
The information contained in the memorandum should provide full and true disclosure of all facts, which will facilitate a reasonable assessment by a prospective investor to determine whether or not to purchase the private fund. In addition to this, the following documents and information must be made available: general description in terms of issuance date, mandate/objective, legal structure, target size of funds geographical focus and tenure also, the Names, address, and other relevant information of the director, general and designated partner, trustee or board members.