Recognising the increasing population of high-net-worth individuals in the Asia Pacific region, Labuan IBFC offers private trust companies to facilitate the management and administration of family wealth for dynastic planning and wealth transfer purposes.
A Labuan private trust company (PTC) is a Labuan company formed specifically to act as a trustee for a group of connected persons, where each beneficiary of the trust established by the PTC is a connected person related to the settlor of the trust.
Within a PTC, the settlor, members of their family or their advisers can be appointed to the board of directors. The composition of the board can be adjusted over time to include members of succeeding generations, thereby involving them in the management of family affairs.
Advantages of a Labuan Private Trust Company
- Confidentiality can be maintained by using a PTC, rather than an independent professional trustee.
- Control and influence: The board of the PTC may consist of the settlor, members of his family, and trusted advisors if the settlor wishes. This allows direct involvement in decision-making processes for the settlor and his family members.
- Management succession planning: Provides a vehicle to familiarise family members with the wealth and business interests owned by the trust, instructing them in asset management.
- Continuity: While the administrator or agent may change, the PTC remains as trustee ensuring the continuity of asset ownership.
- Diversified underlying assets: Independent professional trustees may be hesitant to approve certain assets or major transactions quickly. PTC allows greater flexibility in investment choices based on the varied knowledge of family members acting as board members.
- Cost-effective: Ongoing costs may be lower than trustee fees charged by independent professional trustees, especially if the trust assets are substantial.
- Ownership succession: The PTC may be owned by the settlor or family member(s). However, it is common to use a non-charitable purpose trust, solely owning the shares of the PTC with no requirement to appoint beneficiaries.
Operational Requirements of a Labuan Private Trust Company
- 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 of 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 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.
About FAA Advisory Limited
Comprising a team of seasoned professionals well-versed in Labuan's business landscape, FAA Advisory Limited extends a comprehensive suite of services covering corporate services, private wealth management, and licensing compliance administration, all tailored to meet the unique needs of our clients.
At FAA Advisory Limited, our expertise lies in delivering Labuan insights that facilitate business expansion, simplifying intricate processes, and offering valuable information to guide you through various facets of your journey.
Choose FAA Advisory as your trusted partner in navigating the dynamic business landscape of Asia. With our commitment, we are your gateway to success in Labuan and beyond.
Email: advisory@finarkasia.com | Phone number: +6010-931 6678