Valsen Fiduciaries has been a reliable partner to many investors keen on acquiring a public fund license in Labuan. A mutual fund or fund means a Labuan company, a corporation incorporated under the laws of any recognized country or jurisdiction, a partnership, a protected cell company, a foundation or a unit trust which:
- Collects and pools funds for the purpose of collective investment with the aim of spreading investment risk; and
- Issues interests in a mutual fund which entitles the holder to redeem his investments that is agreed upon by the parties and receives an amount computed by reference to the value of a proportionate interest in the whole or part of the net assets of the aforesaid types of entities, as the case may be, and includes an umbrella fund whose interests in a mutual fund or units are split into a number of different classes of funds or sub funds and whose participants are entitled to exchange rights in one part for rights in another.
A Labuan Public Fund is applicable to securities that are offered for subscription to any member of the general public which has to be registered with the Labuan Financial Services Authority (Labuan FSA) with an approved prospectus of the public fund. You can chose to have your Public Fund via the Company structure of a normal Labuan Company or Protected cell company registered under the Labuan Companies Act 1990.
No public fund shall carry on business in or from within Labuan unless it has been registered under Section 33(1)(a) of the Labuan Financial Services and Securities Act 2010 (LFSSA) or in the case of an Islamic public fund, Section 38(1)(a) of the Labuan Islamic Financial Services and Securities Act 2010 (LIFSSA). The annual fee payable is RM 2,000 (USD600).
- A copy of the Memorandum and Articles of Association / Partnership agreement / trust deed / charter / other constituent documents as the case may be of the fund.
- Names, addresses, profiles and relevant experience of the director / general partner / designated partner / trustee / council members of the fund (Board of the public fund), whichever applicable. The appointment of any members of the Board of the public fund requires prior written approval from Labuan FSA.
- The profile of the promoter/custodian/trustee/fund manager, whichever applicable.
- An audited annual account of the promoter and fund manager, where applicable, for the three years preceding the application.
- The profile of the qualified person as its Sharia adviser in the case of a Labuan Islamic public fund.
- A signed declaration by the Board of the public fund on confidentiality and secrecy with regard to the operation and administration of the fund.
- A certificate from an expert as required under Section 11 of the LFSSA or Section 16 of the LIFSSA that includes a statement certifying that the Labuan public fund complies with the requirements under Part III of LFSSA or Part IV of the LIFSSA and the Guidelines on the Establishment of Labuan Mutual Funds Including Islamic Mutual Funds.
- A copy of the prospectus of the Labuan public fund which should comply with Section 35 of the LFSSA or Section 40 of the LIFSSA, either in draft or final form.
The applicant fund shall do the following:
- Appoint a fund manager, trustee, administrator and custodian (service provider) approved by Labuan FSA.
- Ensure that the duties of the fund manager and custodian or trustee of the Labuan public fund are independent from each other. The duties of the fund manager for the public fund are provided under Sections 47, 48, 49 and 50 of the LFSSA and Sections 46, 47, 48 and 49 of the LIFSSA.
- Maintain a registered office in Labuan. For a Labuan public fund which is permitted to be managed by a non-Labuan licensed fund manager, at least one of the service providers must be approved by Labuan FSA.
- Ensure that all subscriptions are repaid immediately if the minimum level of subscription required is not met within the stipulated time.
- Conduct its business with due diligence and sound principles.
- Ensure that the shareholder and every members of the Board of the public fund including any other relevant person, are fit and proper persons in accordance with the Guidelines on Fit and Proper Person Requirements issued by Labuan FSA.
- Maintain adequate and proper accounting and other records in line with the Directive on Accounts and Record-Keeping Requirement for Labuan Entities issued by Labuan FSA that will sufficiently explain its transaction and financial position and indicate clearly its names and registration number on its letterhead, stationery and other documents.
- Appoint an approved auditor to carry out an annual audit of the accounts in respect of the business operations and submit the audit report to the investors and Labuan FSA pursuant to Section 174 of the LFSSA and Section 135 of the LIFSSA within six months after the close of each financial year.
- Comply with the requirements of Section 53 of the LFSSA and Section 54 of the LIFSSA with regards to its accounts and audit requirements.
- Provide half yearly reporting to the investors, which includes (but not limited to) the following:
- Portfolio valuation report showing actual portfolio mix of the fund;
- The net asset value of the investment;
- Independent verification/confirmation of existence of the fund’s assets; and
- Other pertinent information to the investor with regard to the fund’s performance.
- Notify Labuan FSA of any amendment or alteration to any of its constituent document within 30 days of the changes being effected including its business plan.
- Obtain approval from Labuan FSA for any change to the members of the Board of the public fund.
- Ensure fair and orderly winding down of the matured fund including having an auditor to ensure that all assets have been properly returned to investors.
- Comply with the relevant laws and regulations of the jurisdictions where it intends to operate including obtaining the necessary approval.
- Ensure compliance with the Anti-Money Laundering and Anti-Terrorism Financing Act 2001 and Guidelines on Anti-Money Laundering and Counter Financing of Terrorism which is relevant to Labuan IBFC.
- Ensure proper policies and procedures are in place to ensure a sound compliance framework that safeguards clients’ interests.
Type of License
Labuan Public Fund Tax Treatment
3% or a flat rate of RM 20,000 (Usd 4927.20)
No withholding tax on distribution to investors
No stamp duty on share transfer
We offer a one-stop-shop solution; from the promoter’s idea to successful implementation and administration of investment Funds and vehicles. Valsen offers the following range of solutions that are customised to meet your fund’s needs:
- Assistance with the selection of an appropriate entity for the fund
- Advice in relation to jurisdictional regulations
- Advice on the fund structure
- Assistance with the preparation of constitutional documents
- Incorporation and licensing of the fund company
- Incorporation and licensing of the fund management company
- Drafting the fund prospectus/offering documentation and agreements
- Distribution of offering circulars to prospective investors
- Processing share issues and redemptions
- Communicating with shareholders and providing financial reports
- Maintaining the principal accounting books and liaising with auditors
- Disbursement of dividends, fees, directors’ salaries, overheads
- Holding and keeping minutes of shareholders’ and board of directors’ meetings
- Addressing and providing regulatory compliance
Providing fund administration services, fund accounting and Net Asset Value validation
- We will advise you on the optimal legal structure for your requirements, size, expectations and circumstances. We have extensive knowledge of a wide range of legal structures in all major jurisdictions. (Securities, Banking, Insurance, Investment Management, Gaming and many more)
- Valsen will assist to complete every form for each process in the best way we know how (Based on our many years’ experience with various regulators and service providers across the world)
- Valsen will assist in preparation of winning business plans based on our superior understanding of regulator expectations and requirements
- We are very hands on in the post filing period checking with re regulator and service providers and updating you regularly. Any queries raised by the regulators and service providers during processing will be quickly synthesized by us and we shall craft the right responses to move the process forward fast.
- We can provide you with fit and proper directors in case you need. We have a wide network of qualified and experienced lawyers, chartered accountants, chartered financial analysts, wealth managers, FX experts, Investment advisors etc. of international pedigree.
- We have a full in-house compliance support for all compliance requirements with the regulator and service providers
- Through our extensive network, we provide sign up services with major service providers including but not limited to; Liquidity providers, technology providers, custodians, prime brokers, legal advisors, auditors, payment gateway providers among others.