A Labuan limited liability partnership (LLP) is a business entity comprising two or more partners who operate or manage a business together. It is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership. It is capable of entering into contracts and holding property in its own name.
The minimum number of partners for a Labuan LLP is two partners, ie one designated partner and one limited partner.
A Labuan LLP is a type of business entity that permits a partner to be shielded from liability for partnership obligations created by the misconduct of another partner or person.
- It protects members from personal liability, except to the extent of their investment in the Labuan LLP.
- The Labuan LLP is a taxable entity for income tax purposes. Distributions out of the after-tax profits are tax-exempt in the hands of the partners.
The general process for registering a Labuan LLP involves the following:
- The applicant must appoint a Labuan trust company for the registration, which would conduct due diligence on the applicant. All documentation required to be submitted to Labuan FSA must be filed through a Labuan trust company.
- A Labuan LLP shall have the words "Labuan Limited Liability Partnership", "(Labuan) L.L.P." or "Labuan LLP" as part of its name (any other abbreviations in romanised characters which connotes a limited liability partnership may be approved by Labuan FSA).
- The name may be in foreign characters, alphabets or languages provided that an accurate and certified rendition of the name in the English language is clearly stated in all its documents.
- The application for registration must be accompanied by the relevant documents and payments.
Partnership Registration under the Labuan Islamic Financial Services and Securities Act 2010 (LIFSSA)
Section 131(2) of the Labuan Islamic Financial Services and Securities Act 2010 (LIFSSA) requires that the applicant appoint a qualified person to act as a Shariah adviser for the partnership. The duties of the Shariah adviser pertain to the management and operations of the Islamic partnership to ensure compliance with Shariah principles.
Upon lodgement of complete documentation and payment of fees as well as clearance from the due diligence process conducted by Labuan FSA, a Labuan LLP can be approved for registration within 24 hours.
- Form 10 “Application for Registration of a Labuan Limited Liability Partnership”; and
- Certified copy of the Partnership Agreement.