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Capital Markets
  • 1. What is a mutual fund?
    A mutual fund or fund means a Labuan company, a corporation incorporated under the laws of any recognised 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 unit are split into a number of different class funds or sub funds and whose participants are entitled to exchange rights in one part for rights in another.

    Two types of funds are prescribed under the Labuan Financial Services and Securities Act 2010, namely private funds and public funds.
  • 2. What is a private fund?
    A private fund is defined as a fund whose shares are:
    • not offered to the general public, are owned by not more than 50 investors, and where the first-time investment of said investors is not less than RM250,000 or such other sum as may be prescribed by Labuan FSA or the equivalent in a foreign currency, or 
    • owned by any number of investors, where the first-time investment of each of such investors is not less than RM500,000 or such other sum as may be prescribed by Labuan FSA or the equivalent in a foreign currency. 

    An Islamic private fund is a private fund with a similar definition to the above and is in compliance with Shariah principles.
  • 3. What is a public fund?
    A public fund is a mutual fund other than a private fund, and an Islamic public fund is a public fund that is in compliance with Shariah principles.
  • 4. What is a fund management company?
    A fund management company or manager is a person who, for valuable consideration, provides management services and/or investment advice, or administrative services in respect of securities for the purposes of investment, investment advisory services, fund manufacturing services or such other activities as may be prescribed by Labuan FSA.
  • 5. What is a fund administrator?
    A fund administrator means a person who, for valuable consideration, provides a mutual fund with administrative services or facilities alone or with accounting services.
  • 6. Who may provide fund management services in Labuan IBFC?
    An applicant should have the following minimum eligibility criteria:
    • The applicant is a licensed fund management company from a recognised jurisdiction. 
    • Any company set up by individual fund managers who are licensed by the relevant home supervisory authorities may be permitted, provided they receive written approval from Labuan FSA.
  • 7. What is a securities licensee?
    A securities licensee means a person who, for valuable consideration, provides investment advice or administrative services in respect of securities for the purposes of investment, including dealing in securities or such other activity as may be specified by Labuan FSA.
  • 8. Can a protected cell company be established to conduct a mutual fund business?
    A Labuan protected cell company (PCC) may be established to conduct a mutual fund business in accordance to either conventional or Islamic principles.
  • 9. What is the Labuan International Financial Exchange?
    The Labuan International Financial Exchange (LFX) is a financial exchange based in Labuan. It was established to complement the various business financial services currently available in Labuan. LFX is limited by shares and is wholly owned by Bursa Malaysia Berhad. LFX will be a fully fledged exchange with listing and trading facilities. Its initial focus will be the listing of financial instruments.
  • 10. What are the benefits to list on LFX?
    Application for listing on the LFX can be approved in a shorter period, only two (2) market (business) days, subject to all required documentation received being accurate and complete. 
  • 11. How is a Labuan entity undertaking fund management activities taxed?
    The income is taxed in a similar manner as other Labuan entities under the Labuan Business Activity Tax Act 1990 (LBATA). The rate of tax imposed is 3% of audited net profits or fixed tax of RM20,000, as elected.
  • 12. What is the tax implication on distribution of profits by a Labuan fund management company?
    Dividends received from a Labuan fund management company are tax-exempt.
  • 13. What are the fees payable?
    The fees payable are illustrated in the table below:
    Fees
    Processing Fee
    Annual Fee
    Private Fund
    RM2,000
    USD600
    Nil
    Nil
    Public Fund
    RM1,000
    USD350
    RM2,000
    USD600
    Fund Manager
    RM1,000
    USD350
    RM5,000
    USD1,500
    Fund Administrator
    RM1,000
    USD350
    RM2,000
    USD600
    Securities Licensees
    RM1,000
    USD350
    RM5,000
    USD1,500
    PCC Mutual Fund (Core)
    RM5,000
    USD1,500
    RM5,000
    USD1,500
    PCC Mutual Fund (Cell)
    RM2,000
    USD600
    RM2,000
    USD600
    All licensees are required to pay to Labuan FSA annual licence fees on or before 15 January of each year.
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