01
Trust — relationship; foundation — legal entity
- Legal nature
- Trust: fiduciary relationship · Foundation: corporate body
- Asset owner
- Trustee · foundation itself
- Main document
- Trust deed · charter and, if necessary, articles
- Registration
- Trust optional · foundation mandatory
- Management
- Trustee · officer/council
- Participants
- Settlor/beneficiaries · founder/beneficiaries
02
Labuan trust transfers legal title trustee
Trust is created by a written instrument or will. Discretionary, purpose, charitable, spendthrift/protective and other models are available. At least one trustee must be a Labuan trust company. Purpose trust requires an enforcer. Deed defines powers, distributions, investment, protector, information rights, duration and termination.
03
Labuan special trust shares custody and management of the company
LST can hold shares in Labuan holding company, while the trustee performs the custodian role, and business management remains with the directors of the company. This model is useful for succession and concentrated family business, but requires fine tuning of reserved powers, director succession, distributions and deadlock.
04
The Foundation owns endowed assets in its own name
Labuan foundation has no shareholders and after registration is a separate legal entity. The Charter establishes the purpose; The officer is responsible for administration, the secretary is Labuan trust company, the council provides supervision, and the supervisory person can protect the purpose and property. Endowed assets cease to belong to the founder.
05
Reserved powers should not destroy the structure
The settlor or founder may retain the powers provided for by law and documents, however, excessive actual control can affect asset protection, tax residence, beneficial ownership and recognition of the structure. Governance matrix separates strategic consent, investment, distribution, appointment/removal and emergency powers.
Successor appointors, protector/council replacement, incapacity evidence and emergency management are designed in advance.
06
Each asset undergoes a separate transfer analysis
Transfer restrictions, approvals, valuation and governance.
Account KYC, investment mandate and signatories.
Local ownership, registry, tax and financing.
Risk isolation, dividends and management succession.
An asset is not considered transferred just because it is listed in the schedule: corporate, registry, bank and tax formalities of each country are carried out.
07
The tax map is built for all participants and countries
Labuan treatment, residence and CFC settlor/founder/beneficiaries, tax for contribution and distribution, trust/foundation classification, reporting, CRS, beneficial ownership, estate/inheritance and treaty access are checked. The official FAQ states for Labuan trust 3% audited net profits and exempt distributions, but foreign implications require a separate conclusion.
08
Bank onboarding requires full capital history
The bank receives deed or charter/articles, legal opinion if necessary, structure of roles, benefits, purpose, asset schedule, source of wealth/funds, tax residences and expected transactions. Discretionary benefits and reserved powers are explained directly and are not hidden behind a service provider.
09
Design of private wealth structure
- 01
Family map, goals, countries, citizenship and tax residence.
- 02
Asset inventory, title, liabilities and transfer restrictions.
- 03
Comparison of trust/foundation and foreign recognition.
- 04
Deed/charter, governance, succession and distributions.
- 05
Tax opinions, bank account, funding and annual review.