Difference between Labuan Trust and Labuan Foundation
Law Structure
Labuan Trust
Based on Common Law
Labuan Foundation
Based on Civil Law
Nature of Relationship among parties involved
Labuan Trust
Fiduciary relationship
Labuan Foundation
Contractual relationship
Ownership of Assets
Labuan Trust
Upon being vested in the trust, are legally owned by the trustee
Labuan Foundation
Legally owned by the foundation upon endowment/transfer
Key Roles
Labuan Trust
The Settlor is the person who establishes the trust which the people benefiting from the trust are known as Beneficiaries
Labuan Foundation
The person who creates the foundation and endowment of assets is known as the Founder while the people benefiting from the endowment are known as Beneficiaries
Documents
Labuan Trust
The document that establishes the trust is known as a Trust Deed.
Labuan Foundation
A foundation’s main constituent document is known as a Charter. It may also have Articles which set out more detailed rules regarding governing administrative matters
Appointments
Labuan Trust
Trustee is appointed to be responsible for holding the trust’s assets and to perform administration as per Trust Deed
Labuan Foundation
A body, known as a Council, is appointed and entrusted to run the affairs and administration of the foundation. Its members, the foundation’s officers, are required to act in accordance with the terms as stated in the charter and articles
Rights and Power
Labuan Trust
The settlor can maintain certain reserved power after establishing the trust
Labuan Foundation
The founder does not retain any power nor ownership rights in relation to the foundation’s property after the endowment
Set Up & Purpose
Labuan Trust
A trust can be set up for any lawful purpose but have to appoint an enforcer
Labuan Foundation
A foundation can be set up for any lawful purpose and it has to be spelt out clearly in the charter
Back to Labuan Trust Company or read about Labuan Foundation instead.
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