Set up a Trust in Labuan: Registration Procedure

Foreign investors can set up a trust in Labuan for the purpose of holding benefits for another party (the beneficiary) as well as for charitable purposes. Our team of company formation agents in Labuan can offer assistance on the legal aspects related to the registration of a trust.

Quick Facts
What is a trust?	An agreement through which a party gives the right to another party (the trustee) to manage various assets and properties, in the name of a beneficiary (or more beneficiaries).
Institution regulating trusts	Labuan Financial Services Authority (FSA)
Law on trusts	– Labuan Trusts Act 1996 (LTA), – Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001, – Labuan Islamic Financial Services and Securities Act 2010 (LIFSSA) – for Islamic trusts, – Labuan Trusts Regulations 2010
Statutory document	One can set up a trust in Labuan through the trust deed.
Parties representing the trust	– the founder, – the trustee, – the beneficiary
Provisions of the unilateral declaration	– the person appointed as the trustee of the Labuan trust, – the name of the trust, – the terms under which the trust operates, – the names and information regarding the beneficiaries of the trust
Law regulating Islamic trusts	Labuan Islamic Financial Services and Securities Act 2010 (LIFSSA)
Registered office required (yes/no)	Yes, as per the Labuan Trusts Act 1996 Am. Act A1368:S.18
Disclosure policies	Those who will set up a trust in Labuan do not have any disclosure obligations.
Duration of a trust	Unlimited period of time, unless otherwise specified by the founder.
Is the trust taxed? (yes/no)	Yes
Basic taxes for trusts	3% tax on the net profits If the trust holds Malaysian property, the rules of the Income Tax Act 1967 will apply. Non-Malaysian property held by the trust will fall under the provisions of the Labuan Business Activity Tax Act 1990.
Types of trusts	One can set up a trust in Labuan as: – a purpose trust, – a charitable trust, – protective trust, – a Labuan special trust (according to the Labuan Trusts Act 1996)
Capital requirements (yes/no)	No
Activities permitted for charitable trusts	– eradication of poverty, – advancement of education, – promotion of art, – culture, – religion, – protection of the environment, – advancement of human rights and freedoms, – other purposes that can have a positive influence over a community (Labuan Trusts Act 1996, 11B)
Registration fees (Stamp Duties)	USD 300 (Labuan FSA fee from 1 January 2026)
Renewal fees	Those who have set up a trust in Labuan must pay an annual fee (USD 300 from 2026).
Deadline to pay the renewal fee	15th of January
Accounting obligations	The trust must maintain accounting records at its registered address in Labuan.
Registration forms	One can set up a trust in Labuan by completing the Application for Registration of a Labuan Trust and the Declaration by a Labuan Trust Company as Trustee. Trusts incorporated under the Islamic law must submit the Application for Registration of a Labuan Islamic Trust along with the aformentioned Declaration.
Registered name requirements for the trust company	When registering the trust, it is necessary to include in its trade name the words ” Trust” or “Trustee”.
What is a trust company?	It is a legal entity that is appointed to manage the trust.
Law under which trust companies are incorporated	Trust companies must follow the rules of the Labuan Companies Act 1990.
Types of trust companies	Trust company, managed trust company and Labuan private trust company
Types of fees for trust companies	Registration fees and annual renewal fees
Who can register a trust?	Residents and non-residents
Tax exemptions	The law stipulates that the distributions made through a Labuan trust to its beneficiary (or beneficiaries) are exempt from taxation.
Audit obligations (yes/no)	Yes
Does the trust need to be registered with the Labuan Financial Services Authority?	No, but the trust company administering the trust must be registered with the institution.
Obligations for Islamic trusts	Individuals who have set up a trust in Labuan under the Islamic law must appoint a Sharia adviser, whose responsibility is to observe that the activities of the trust are compliant with the Sharia rules.

What types of services can I obtain?

If you want to set up a trust in Labuan, our team of specialists in company formation in Labuan can assist in the following:

offer information on the legislation applicable to trusts;
help clients in selecting the most suitable type of trust, depending on their needs;
provide legal representation in the registration formalities;
gather the necessary paperwork;
maintain the connection with the authorities involved in the procedure;
offer ongoing assistance.

What is the legislation regulating the Labuan trust?

Investors can set up a Labuan trust under the regulations of the Labuan Trusts Act 1996 and the Labuan Foundations Act 2010 (Labuan special trusts are governed by the Labuan Trusts Act 1996). We also remind you that:

the local legislation also recognizes the Islamic trust, which is incorporated under the Labuan Islamic Financial Services and Securities Act 2010;
trusts in Labuan are required to comply with the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001.

What is the statutory document of a trust?

In order to open a trust in Labuan, Malaysia, investors have to draw a trust deed, which is the main statutory document of the entity. It establishes the rights and obligations of the trustee and the settlor (the person who establishes the trust).

Some of the details that are covered in writing in this document are the following:

the name of the trust;
the terms under which the trust will function;
the names and identification details for all of the beneficiaries.

What are the types of trusts in Labuan?

The Labuan Trusts Act 1996 recognizes four types of trusts:

purpose;
charitable;
protective;
special.

What are the characteristics of a Labuan special trust?

The Labuan special trust was created as a tool for owning shares in holding companies registered in Labuan, which usually own various assets. This type of trust can be used for:

commercial purposes;
succession;
matrimonial purposes.

For what purposes can I set up a charitable trust?

For charitable purposes, the legislation in force allows the registration of a trust for the following:

the advancement of education;
the relief/eradication of poverty;
the promotion of art, science or religion;
the protection of the environment;
any other purposes that are beneficial to the community.

What are the main reasons to set up a Labuan trust in 2026?

Some of the reasons for which our team recommends you to set up a trust in Labuan are:

complete control and flexibility;
the structure can benefit from tax exemptions;
the distributions made to beneficiaries of a trust are exempt from taxation.

Do I need to pay registration fees in 2026?

Yes, just like in the case of investors who plan to open a company in Labuan and who must pay registration fees, those who set up a trust will also have this obligation. Currently, according to the Labuan Financial Services Authority, those who want to register a trust may pay the following fees:

USD 300 for the registration of the trust;
USD 300 – the annual fee.

We invite you to watch a short video presenting how to set up a trust in Labuan:

Who can be a trustee?

The trustee can be represented by a natural person or a legal entity which has received the right to manage assets in the name of a certain beneficiary. In Labuan, a trust can have any number of trustees, as long as one of them is represented by a Labuan trust company.

Who can be the beneficiary of a trust?

Corporations, charities or natural persons can be the beneficiaries of a Labuan trust.

Do I need to be a resident in order to open a trust?

No, both residents and non-residents have the right to set up a trust in Labuan. However, for the latter certain requirements may be imposed, which can be detailed by our specialist in company formation in Labuan.

What is the duration of a trust?

A Labuan trust can be registered for a fixed period of time or for an indefinite time.

What are the financial considerations for a Labuan trust company?

If the trust is involved in trading activities, it will be imposed with a tax charged at the rate of 3% on the audited net profits. Trusts involved in non-trading activities are charged with a 0% tax.

Do I have any employment obligations when setting up a trust in 2026?

No, but the trust company hired to represent the trust has the obligation to have at least 2 employees employed as trust officers. It is also mandatory for one of them to be a resident.

What are the confidentiality policies?

Confidentiality is the first thing to consider when setting up a Labuan trust. The owners’ personal information is protected and cannot be disclosed to the public.

Can I make any changes to the trust?

Yes. Any subsequent changes to the trust are to be indicated to the relevant authorities. These can include:

changes of the trust name;
a change in the name or the address of the Labuan trust company that acts as the trustee (when applicable);
a change of the address of the Labuan trust’s registered office.

We invite businessmen to contact our team of Labuan offshore company formation agents for more details related to the Labuan trust and the taxation system available in this case.