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Labuan Protected Cell Company

PROTECTING YOUR ASSETS: PROMOTING YOUR BUSINESS

Designed to allow businesses to maximise on the potential benefits of the Labuan IBFC, Protected Cell Companies (PCC) provide an alternative solution to a standard corporate structure. With our professional help, separating the assets and liabilities of different shares within the business into separate cells, while retaining the company’s single legal status, is both straightforward and beneficial.

There are numerous advantages to setting up a Protected Cell Company, especially for an insurance business. However, you need to plan carefully and ensure each cell is optimised for maximum protection and benefit – which is why you should contact us.

With over 50 years’ experience in the Trust business, we provide bespoke solutions for companies looking to create or change into a Protected Cell Company. Contact our qualified and friendly team today for a cost-effective and personalised PCC service.

KEY FEATURES OF A LABUAN PROTECTED CELL COMPANY

A protected cell company (PCC) is one of the most innovative business structures offered by the Labuan IBFC, and indeed by most other International Business Financial Centres.

This type of business entity provides an alternative structure to a range of investors, in particular businesses that may previously have chosen a rent-a-captive scheme instead of forming an in-house captive insurance company for self-insurance purposes.

Essentially a PCC is a company, which keeps the assets and liabilities of different share classes totally separate from each other. They are also kept separate from the general assets of the protected cell company itself.

Legally a PCC is a single company, but by keeping each cell isolated from the other cells in the company, it affords each one a high level of protection, and no one cell is liable for the actions of any other cell within the company.

  • In legal terms a Labuan PCC is a single entity
  • Each cell has its own capital and the assets and liabilities of each cell are protected by law from all the other cells
  • Creditors of any given cell will only have access to the assets of that cell, not the other cells within the PCC
  • Existing Labuan companies may be converted to a Labuan PCC
  • Separate records must be kept for each cell’s assets and these records must be separate to the general assets of the PCC
  • A Labuan PCC may only have one Board of Directors and this Board manages the affairs of the PCC as a whole. Committees may be appointed to monitor the operation of the individual cells

WHAT ARE THE ADVANTAGES OF LABUAN PROTECTED CELL COMPANIES?

A Labuan Protected Cell company is the ideal vehicle for an insurance business. It provides cover for uninsurable risks and affords companies a good deal of flexibility in managing risk portfolios.

It’s suitable for any investors thinking of establishing a mutual fund as it allows for a wide range of diverse investments in a risk controlled environment.

If any individual cell becomes insolvent, this won’t affect the business as a whole or any other cells.

Cells can be added when necessary without hassle and with minimum cost. Operation costs are also reduced overall, helping maintain a healthy cash flow.

As with all other business entities in Labuan a PCC enjoys generous tax benefits:

  • No tax whatsoever is imposed on the individual cells
  • If the PCC is a non-trading company, the company as a whole is exempt from paying tax
  • If it is a trading company, tax on profits will be paid at the rate of 3% of the net profit or a lump sum of MYR 20,000.
  • No withholding tax is paid on dividends

PERMITTED USE OF A LABUAN PROTECTED CELL COMPANY

With risk management at its core, a PCC is largely used by a Labuan insurance business or captive insurance business, a mutual fund business or an Islamic mutual fund company.

Labuan Protected Cell Companies can be established for the following purposes:

  • To conduct Labuan Insurance Business or Labuan Captive Insurance Business under terms laid out by the Labuan Financial Services and Securities Act 2010
  • To conduct Labuan general takaful business or Labuan Captive Insurance Business under terms laid out by the Labuan Islamic Financial Services and Securities Act 2010
  • To conduct the business of a mutual fund under the Labuan Financial Services and Securities Act 2010 and the business of an Islamic mutual fund under the Labuan Islamic Financial Services and Securities Act 2010.

WHY WE ARE THE RIGHT PEOPLE TO HELP YOU SET UP A LABUAN PROTECTED CELL COMPANY

We are a fully licensed trust company with a highly experienced team of dedicated professionals. We can help you plan, establish and structure a Labuan protected cell company ensuring you get a bespoke service that meets your particular business needs. We also offer some of the most competitive prices in the industry.

To find out more about how we can help you set up your Labuan protected cell company, contact us on our live support or email us at info@labuanborneotrustees.com.