Family businesses often require family office services to manage wealth and plan for succession. Setting up a Labuan Foundation provides benefits for both the business and family, including asset protection, governance structures, succession planning, and tax benefits. The document discusses how a Labuan Foundation works, the key personnel and structures involved, and provides an example of how one could be set up to restructure a family-owned business with ownership spread across multiple family groups.

1. Family Office Services
Succession Planning and
Wealth Management through
Labuan Foundation


2. Family Office Services
What is family business and who requires
family office services?


3. Who requires Family Office services?
Businesses involving one or more than one family is
known as family business and family businesses
typically requires Family Office services for wealth
management purposes.

4. Family Office Services
What are the typical problems
encountered by family businesses?


5. Typical problems encountered by family
businesses…
 Conflict of interest among family members
 Lack of succession planning
 Decrease in leadership drive
 Flat growth to the company
 Heirship

6. Family Office Services
What is the typical structure of family
businesses?


7. Typical structure of family businesses…
Founder
(1st Generation)
Immediate Members
(2nd Generation)
Extended Family
(3rd Generation)

8. Family Office Services
What does family office services cover?


9. Wealth
Planning
Services
Administrative
Services
Succession
Planning
Services
Asset
Management
Family
Office
Services
Risk
Management
Services
Charity
Services
Trust
Management
Services
Tax and
Legal
Services

10. Family Office Services
Where do we start?


11. Family Office Services
First, set-up a Labuan Foundation…


12. Labuan Foundation
Succession
Planning
Services
A Labuan Foundation will
be set-up for company
and family governance
purposes under our
Family Office services

13. Labuan Foundation
Succession
Planning
Services
Ownership issues will be
also be taken care…
Business will
operate as usual…
Family governance
in place…

14. Family Office Services
Use a Labuan Foundation instead of a
Company or a Trust because…


15. A Labuan Foundation is a combination of
Company and a Trust…
Foundation is like a hybrid structure of a
company and a trust

16. You get the best of both world…
A Company has the flexibility to change its structure by
passing a board resolution…
A Trust provide asset protection by segregate personal asset
and business risks...
A Labuan Foundation has both the characteristics of a
Company and Trust…

17. Family Office Services
Setting up a Labuan Foundation…


18. Labuan Foundation requires the following
key personnel…
 Founder
* Founder can act either as council member or officer
 Council Member
 Officer
* Officer should not be related to council member
 Secretary
 Beneficiary

19. Family Office Services
Optimizing ownership with
Labuan Foundation…


20. Optimization of Ownership…
 Wealth creation & protection
 Risk diversification
 Liquidity management
 Leverage

21. Family Office Services
Benefits to your business using
Labuan Foundation…


22. Business…
 Wealth creation & protection
 Enhanced company value protection
 Mitigation of intergeneration conflicts
 Balance asset & liability management
 Additional source of wealth & income

23. Family Office Services
Benefits to your family using
Labuan Foundation…


24. Family…
 Family culture & values
 Family governance
 Compensation schemes
 Wealth preservation
 Succession planning
 Risk assessments & profiles
 Individual financial & tax planning objectives

25. Sucession Planning
Do you have in mind who will be the next
key personnel?


26. Succession Planning:
Key values for determination of the next leader…
Characteristics
(initiative, creative thinking)

27. Succession Planning:
Key values for determination of the next leader…
Behavior
(integrity, commitment)

28. Succession Planning:
Key values for determination of the next leader…
Competency
(knowledge, skills, talents, experience, abilities)

29. Succession Planning:
Key values for determination of the next leader…
Strategic thinking
(Dynamic, tactical, enterprising, entrepreneurial)

30. Succession Planning:
Key values for determination of the next leader…
Relationship / Network building
(Charisma, diplomatic, team player, cooperative)

31. Labuan Foundation
Structure of Labuan Foundation
(Non-charitable)


32. Labuan Foundation
Manage
Transfer of
Assets
Manage
Manage
Distribution
The structure of a non-charitable
private foundation

33. What if the Foundation is established
for charitable purposes?
If the Foundation solicits funds/donations
from the public….three (3) additional
personnel shall be required…

34. Labuan Foundation
Structure of Labuan Foundation
(Charitable)


35. Charitable Foundation
Manage
Transfer of
Assets
Additional
Personnel
Manage
Manage
Distribution

36. Labuan Foundation
Example of restructuring Labuan
Foundation into a family business…


37. Family business owned
by 3 brothers before restructuring…
Shareholders
55%
Local
Company
Business
Operations
30%
15%

38. Labuan Foundation
First step of restructuring…
Set-up a separate Labuan Foundation
for each family…


39. Labuan Foundation for Mr A family
Manage
Transfer of
Assets
Manage
Manage
Distribution
For each family, set up a private foundation…

40. Labuan Foundation for Mr B family
Manage
Transfer of
Assets
Manage
Manage
Distribution
For each family, set up a private foundation…

41. Labuan Foundation for Mr C family
Manage
Transfer of
Assets
Manage
Manage
Distribution
For each family, set up a private foundation…

42. Labuan Foundation
Then, set-up a main Labuan Foundation
for each Family Foundation…


43. Proposed Structure
55%
30%
Controlling Stakes
15%

44. Contact us for more
information…


45. Cheng & Co Trust International Limited
Telephone: +603-79848988 | Fax: +603-79844402
Website: www.chengcotrust.com | e-mail: info@chengcotrust.com
Kuala Lumpur Office:
No 16-G, Jalan 2/114, Kuchai Business Centre,
Off Jalan Klang Lama, 58200 Kuala Lumpur
Labuan Office:
Lot 2(a), Level 4, Wisma Lazenda, Jalan Kemajuan,
PO Box 81840, 87000 Labuan FT
www.chengcotrust.com
