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In 2010, amendments were made to the Labuan Trusts Act 1996 which allowed for the introduction of a new type of trust called the Labuan Special Trust (“LST”), which to a large extend modeled itself against the Virgin Islands Special Trust Act (VISTA) in the British Virgin Islands. A significant advantage in a LST is that it can be used to hold and retain shares indefinitely in a company, which in turn may be used to own assets such as cash, real estate, art securities, businesses, insurance policies etc. In this context, “company” refers to either a Labuan company or a partnership interest in a Labuan limited liability partnership established under the Labuan Limited Partnerships and Limited Liability Partnerships Act 2010.
Contrary to conventional approach, it allows management of the company to be carried out by its directors without any power of intervention being exercised by the trustee (other than those prescribed under the legislation). Therefore, a trustee appointed under a LST shall have no fiduciary responsibility or duty of care in respect of the property of, or the conduct of the affairs of, the company, except when acting, or required to act, on an intervention call ie. made by an interested person whom may have a complaint concerning the conduct of the company’s affairs.
Kensington Trust Labuan Limited is licensed appropriately to act as trustee for a LST.
|Settlor – person setting up the trust||Malaysian resident or non-resident|
However, a trustee shall not be a director of the company where shares are held by the said trustee.
|Enforcer / Protector||
|Assets of the Trust||
|Duration of Trust||No perpetuity period|
|Letter of Wishes||
Settlor can also use Letter of Wishes to provide guidance to the Trustee in matters affecting trust (particularly distribution) for situations that may arise post his / her demise
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