A flexible structure for cross-border collaboration, asset holding, and international business arrangements.
LABUAN PARTNERSHIP
A Labuan Partnership is a business structure formed under the Labuan Limited Partnerships and Limited Liability Partnerships Act 2010, allowing two or more parties to conduct business collectively in Labuan. It is commonly used for private equity structures, joint ventures, and fund management platforms.
BENEFITS
Flexible ownership and management structure
Tax efficiency under Labuan tax regime (3% on net profits)
Confidentiality of partners (no public disclosure of partners' details)
Suitable for private equity, venture capital, or fund structures
Can be formed for a fixed or perpetual term
CATEGORIES
1. Limited Partnership (LP)
Under Section 2B of the Labuan Business Activity Tax Act 1990 (LBATA), a Labuan entity must have adequate full-time employees and operating expenditure in Labuan to enjoy preferential tax rates; otherwise, it will be taxed at 24% on net audited profits.
2.Limited Liability Partnership (LLP)
All partners enjoy limited liability and can be involved in management. LLP is a separate legal entity and combines the benefits of a corporation and partnership.
TARGET MARKET
Professional investors and fund sponsors
Asset managers and family offices
Venture capitalists and private equity firms
Project-based joint ventures
Cross-border partnerships seeking a neutral and tax-efficient jurisdiction
ECONOMIC SUBSTANCE REQUIREMENTS
Under Section 2B of the Labuan Business Activity Tax Act 1990 (LBATA), a Labuan entity must have adequate full-time employees and operating expenditure in Labuan to enjoy preferential tax rates. Failure to comply will cause the company to be taxed at 24% on net audited profits.
SAMPLE USE CASE
A fund management company sets up a Labuan LLP as a vehicle to manage a private equity fund with limited partners from various jurisdictions. The LLP structure allows efficient profit sharing, investor protection, and tax optimization while fulfilling Labuan’s substance and regulatory requirements.
Head Office
Unit Level 11(A), Main Office Tower, Financial Park Labuan, Jalan Merdeka, 87000 FT Labuan, Malaysia
Marketing Office
19A-25-1, Business Suite, UOA Centre, No.19, Jalan Pinang, 50450 FT Kuala Lumpur, Malaysia
