A Guide to Labuan Private Funds 

Labuan private funds are investment vehicles designed for high-net-worth individuals, corporations, and institutions that seek capital appreciation or income from a diversified investment portfolio. These funds are structured to cater to private investors and are not offered to the general public. The key categories of Labuan Private Funds include:

1. Private Fund for Up to 50 Investors:
   A private fund that can have a maximum of 50 investors. Each investor must invest at least MYR 250,000 or an equivalent amount in foreign currency.

2. Private Fund for Unlimited Investors:
   A private fund that allows an unlimited number of investors, provided each investor makes an initial investment of at least MYR 500,000 or its foreign currency equivalent.

A Labuan Private Fund is commonly used by private investors as a flexible hedging and investment vehicle. It allows for the creation of a collective investment pool that can be directed towards various investment objectives, such as:

• Equities and shares

• Forex and money markets

• Commodities

• Real estate investments

• Land acquisitions

• Business projects

• Business acquisitions

• Development projects

These funds offer diverse opportunities for strategic growth and portfolio diversification.

Establishing a Labuan Private Fund requires submitting a written notification to the Labuan Financial Services Authority (Labuan FSA). The application must include an information memorandum, which serves as a prospectus for investors, providing them with critical information about the fund. The key elements of the information memorandum include:

• Investment Strategy: Clear details on investment policies, types of securities, and whether derivatives or unlisted securities will be involved.

• Fund Description: An overview of the fund’s structure, target size, and geographical focus.

• Key Personnel: Information about the fund manager, custodian, directors, and any Shariah advisors (for Islamic funds).

• Fees and Costs: A breakdown of the costs that investors will bear.

• Redemption Policy: Clear guidelines on how and when investors can redeem their investments.

1. Tax Efficiency: Labuan offers a tax-efficient jurisdiction with no capital gains tax and a 3% corporate tax on net profits.

2. Regulated by Labuan FSA: Investors benefit from a transparent, internationally recognized regulatory environment.

3. Flexible Structures: Whether you're interested in traditional or Shariah-compliant funds, Labuan offers flexible options for structuring your private fund.