Malaysia Foundation VS Labuan Foundation

Malaysia Foundation


Labuan Foundation


Sponsorship Requirement


Min RM1,000,000 injection within 6 months


No sponsorship requirement
Governing Regulation ·  Company Act 1965

·  Memorandum & Articles of Association


·  Labuan Foundation Act 2010

·  Charter & Articles of Association


Name of the foundation Application to Minister to drop the word “Berhad” as part of the name


·  (L) Foundation

·  Labuan Foundation

Permitted Activities Restricted to Charitable Purpose only. ·  Asset protection

·  Wealth Planning

·  Trading Entity

·  Charitable Purpose


Key Personnel ·  Founder

·  Company Secretary

·  Board of Governors*


*candidates required approval from the minister

·  Founder

·  Council Member(s)

·  Officer(s)

·  Company Secretary

·  Beneficiary(s)

·  Supervisory person

(for charitable foundation)

·  Auditor

(for charitable foundation)

·  Custodian

(for charitable foundation)


Annual Compliance ·  Annual Return Filling

·  Convening of Annual General Meeting

·  Submission of Audited Account

·  Tax Return Filling

·  Convening of Annual Foundation Meeting

·  Annual Government Fee

·  Audited account is not required


Donation received/Distribution Application for approval under Section 44(6) of the Income Tax Act 1967 as approved institution

i.e. the donor will get tax exemption for the donation made to the foundation


Distribution to Beneficiary is tax exempted in the hand of the beneficiary
Tax Regime 25% net income for each charitable project ·  3% of audited profits

(Labuan Trading Activities)

·  RM20,000

(Labuan Trading Activities)

·  0%

(Labuan Non-Trading Activities)


Others ·  Low flexibility

(approval from minister is required for any changes to be made to the Foundation structure)

·  Founder has lesser control over the function of the foundation.

·  Cannot hold shares in any company for more than 49%

·  Endowment of property required approval from the minister.

·  Changes to the foundation structure only require notification to the authority by the officer of the foundation.

·  Founder reserved all rights of the foundation.

·  100% shareholding in Domestic Company is permissible

·  Endowment of Malaysian Property required approval and notifications to the Labuan Authority.

·  A provision on unenforceable foreign claims.

·  Re-domicile is permissible.