The creation of a Labuan trust is generally for an individual or a settlor to give specific property to a third party to be held for the benefit of others, including charities. The Labuan Trust Act 1996 (LTA) allows the creation of the following types of trust:
- Charitable trusts;
- Spendthrift or protective trusts; and
- Labuan special trusts.
A Labuan trust may be created or established for a specific particular purpose which could be charitable or otherwise. A charitable purpose means and includes any of the following description of purposes:
- The relief or eradication of poverty;
- The advancement of education;
- The promotion of art, science and religion;
- The protection of the environment;
- The advancement of human rights and fundamental freedom; or
- Any other purposes which are beneficial to the community.