|
Importance of Wealth Planning
Wealth planning through modern structures via LABUAN TRUST A Labuan Trust is governed by the Labuan Trust Act 1996 (The Trust Act) which was updated in 2010. The legal concept involves regulating the relationships between the settlor, trustee and beneficiary. Assets in the trust are held in the trustee's name (as a legal owner) and are dealt in accordance with the trust deed. The trustee has a fiduciary duty to ensure the trust assets are managed prudently and in the best interest of the beneficiaries (equitable owner). A highly effective vehicle for asset/wealth preservation, protection and succession planning to pass on wealth from one generation to the next, trust structures are traditionally used in common law countries and can protect the trust's assets against creditor claims, insolvency, divorce, and inheritance claims. There is also flexibility to set up as a Shariah-compliant trust for Islamic wealth management and estate planning purposes. Labuan Trust Structures
A Labuan Special Trust (LST) is an innovative feature of the Labuan Trusts Act 1996 (LTA) and can be used to hold shares in a Labuan holding company, which in turn may own assets. The benefit of an LST is that there is a distinct separation between the custodian role of the trustees and the management of the company which is the responsibility of only the directors. The LST can be used for succession planning, commercial purposes and matrimonial settlement.
LABUAN FOUNDATION
Why set up a Foundation?
A foundation is a legal entity administered by a charter and articles, enjoying aspects of corporate personality, into which assets can be placed. The foundation owns the title to such assets, can enter into contracts, acquire properties, own a bank account or even own a share in its own name. Having a foundation gives both the benefits of a trust and the certainty of a company.
A founder may form a Labuan foundation by filing the foundation's charter, specifying the initial assets endowed for the foundation's establishment, and meeting all other applicable regulatory requirements by Labuan Financial Services Authority (Labuan FSA). Such assets are managed in the interest of beneficiaries who could benefit from it despite the fact that foundation holds ownership to it. The founder may also appoint council member(s) and officer(s) for the foundation.
The above is a common structure of a Labuan foundation. Key members of management for a normal Labuan foundation comprise a council member, officer and secretary. What do these structures provide?
Which structure suits best? Depends on:
Source: Labuan IBFC
Whatsapp : (852) 6499 4686 Phone : (852) 2186 6936 Email : info@intershores.hk
Disclaimer: Whilst reasonable care has been taken in provision of information above, it does not constitute legal or other professional advice. INTERSHORES does not accept any responsibility, legal or otherwise, for any error omission and accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, readers are advised to take appropriate professional advice before committing themselves to any involvement in jurisdictions, vehicles or practice. |
|
