A Labuan Foundation is a corporate body with a separate legal entity, usually established to hold assets with the objective of managing the assets for the benefit of a class of persons on a contractual basis. A separate legal entity from its managers (i.e. its officers and its council), it is typically used for private wealth management and charitable purposes.
In the case of an Islamic Foundation, the foundation’s aims and operations shall be in compliance with Shariah principles.
The structure of a Labuan Islamic Foundation consists of the following:
A Labuan Islamic foundation can be established under Section 107 of the LIFSSA and all the provisions of the LFA shall apply to the Labuan Islamic foundation unless specifically provided. The object, purpose and activity of the Labuan Islamic foundation must be in compliance with Shariah principles.
The officer of a Labuan Islamic foundation is required to appoint or consult a Shariah adviser to advise on matters relating to the operations of the Islamic foundation to ensure its compliance with Shariah principles.
The Labuan Islamic foundation must have a clearly executed legal transfer of ownership of the property(ies) from the founder to the foundation.
The endowment of property(ies) into the Labuan Islamic foundation can be done through hibah or hadiah.