Before you get started with your wealth planning, it is good to understand the difference between Labuan Trust and Labuan Foundation. This will help you to make the better decision to minimise your risk and cost. More and more high net worth individual now choosing Labuan Private Foundation for their wealth management to have full control after the implementation of Common Reporting System (CRS) by OECD, check out why Labuan Private Foundation is so special?
Difference Between Labuan Trust and Labuan Foundation
|Labuan Trust||Labuan Foundation|
|Origins from Common Law||Origins from Civil Law|
|Relationship among parties is fiduciary||Relationship among parties is contractual|
|Assets, upon being vested in the trust, are legally owned by the trustee||Assets are legally owned by the foundation. Upon registration of the foundation, the property endowed or to be endowed becomes an estate separate and apart from that of the founder by acquiring a separate legal entity status|
|The person(s) who establishes the trust is known as the settlor and the persons who benefit from the trust are known as beneficiaries.||The person(s) who creates the endowment is known as the founder and the persons who benefit from the endowment are known as beneficiaries.|
|The trust deed is the document that establishes the trust||The charter is the main constituent document of a foundation. A foundation may also have articles which are a set of more detailed rules governing its administration matters|
|The appointed trustee is the person responsible to hold the trust assets and administer the trust||The council is the appointed body entrusted to carry on the business and affairs of the foundation and pursue its object. The foundation's officer(s) and council are required to act in accordance with the terms of the charter and articles|
|Registration of the trust is optional||Registration of the foundation is mandatory|
|The settlor has certain reserved powers after establishing the trust and vesting the legal title in the trust assets to the trustee||The foundation does not have a share capital and does not recognize shareholders. The founder does not retain or acquire any ownership rights in relation to the foundation's property. The law does recognize however, the beneficiaries or the persons is created, which can include the founder|
|A trust can be established for any lawful purpose but a trust that is set up for a purpose must appoint an enforcer||A foundation can be established for any lawful purpose which shall be spelt out in the charter of the foundation|
|A trustee retain most power with risk associated to it||Foundation cannot be sued by the creditors with crawl back period of 2 years|
- Labuan Private Foundation
- Labuan Charitable Foundation
- Labuan Trust
- Private Trust Company
Labuan Private Foundation – Asia’s only one Private Foundation vehicle protected by Foundation Acts! Check out more on other jurisdiction private foundations compare to Labuan Private Foundation. The set up of Labuan Private Foundation vehicle is straightforward and simple!
- Registration guide of Labuan Private Foundation
- Documents required to register Labuan Private Foundation
- FAQ of Labuan Private Foundation
Call us at +603-2161 0354 or send us an email us for more information on Labuan Wealth management vehicles that suits your needs. We will provide a private consultation to you giving guidance on how to set up and ways to customise the Labuan Foundation to manage your wealth efficiency and cost-effective. We ‘simplify the complexities’ on your Labuan investment!