Private Trust Companies - Wealth Management

Recognising the growing population of high-net-worth individuals in the Asia Pacific region, Labuan IBFC offers the services of private trust companies to facilitate the management and administration of family wealth for the purposes of dynastic planning and wealth transfer.

A Labuan private trust company (PTC) is a Labuan company formed for the specific purpose of acting as a trustee for a group of connected persons and where each beneficiary of the trust established by the PTC is a connected person related to the settlor of the trust.

In a PTC, the settlor, members of his family or his advisers can be appointed to the board of directors. The composition of the board can be changed from time to time to bring in members of succeeding generations and in this way, involve them in the management of family affairs.

Application Requirements
Operating Requirements
Fees

Application Requirements
Submit a duly completed Form LTC “Application for Licence to Carry on Labuan Trust Company Business” as required under Section 74(2) of the Labuan Financial Services and Securities Act 2010 (LFSSA).
Submit a copy of the draft trust instrument to Labuan FSA.
Ensure that the directors and officers responsible for the management of the proposed Labuan private trust company in Labuan IBFC are fit and proper persons pursuant to Section 4 of the LFSSA and the Guidelines on Fit and Proper Person Requirements issued by Labuan FSA.
Provide a letter of undertaking that it shall not carry out any trust company business other than with respect to the private trust(s).
Appoint a Labuan trust company as its agent and provide a certified copy of the executed agent's engagement agreement.
Operating Requirements
Submit a certified copy of the executed trust instrument and any subsequently executed trust instrument.
Ensure compliance with the Guidelines on Anti-Money Laundering and Counter Financing of Terrorism.
Notify Labuan FSA on any changes to its Labuan trust company agent within seven working days from the effective date of change specified.
Observe the statutory requirements under the LFSSA.
Have proper arrangements in place to account for and keep all assets and other valuables that it has received in its capacity as trustee duly separated from the trust company's own assets and liabilities.
Comply with guidelines, directives and reporting requirements issued by Labuan FSA.
A Labuan private trust company may appoint an external auditor and conduct an annual audit. Nevertheless, it must ensure that all its accounting and other records are properly kept and managed.
Fees

All licensees are required to pay to Labuan FSA annual licence fees on or before 15 January of each year:
Type of fees
Amount
Annual Fee
RM5,000
USD1,500

Application Requirements
Submit a duly completed Form LTC “Application for Licence to Carry on Labuan Trust Company Business” as required under Section 74(2) of the Labuan Financial Services and Securities (Amendment) Act 2022 (Act A1654) (LFSSA).
Submit a copy of the draft trust instrument to Labuan FSA.
Ensure that the directors and officers responsible for the management of the proposed Labuan private trust company in Labuan IBFC are fit and proper persons pursuant to Section 4 of the LFSSA and the Guidelines on Fit and Proper Person Requirements issued by Labuan FSA.
Provide a letter of undertaking that it shall not carry out any trust company business other than with respect to the private trust(s).
Appoint a Labuan trust company as its agent and provide a certified copy of the executed agent's engagement agreement.
Operating Requirements
Submit a certified copy of the executed trust instrument and any subsequently executed trust instrument.
Ensure compliance with the Guidelines on Anti-Money Laundering and Counter Financing of Terrorism.
Notify Labuan FSA on any changes to its Labuan trust company agent within seven working days from the effective date of change specified.
Observe the statutory requirements under the LFSSA.
Have proper arrangements in place to account for and keep all assets and other valuables that it has received in its capacity as trustee duly separated from the trust company's own assets and liabilities.
Comply with guidelines, directives and reporting requirements issued by Labuan FSA.
A Labuan private trust company may appoint an external auditor and conduct an annual audit. Nevertheless, it must ensure that all its accounting and other records are properly kept and managed.
Fees
All licensees are required to pay to Labuan FSA annual licence fees on or before 15 January of each year:
Type of fees
Amount
Annual Fee
USD1,500

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FAQs

1. 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.
2. 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.
3. What is Islamic banking?
Islamic banking is defined as a banking business that is in accordance with Shariah principles.
4. Who may apply for Labuan banking licence?
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 authority; and
Conforms to generally accepted standards of international banking practices or the Bank for International Settlements (BIS).
5. What is the minimum working minimum fund for an investment bank?
RM10 million or its equivalent in any other currency.