2. Can an SPV be incorporated in Labuan?

Yes, as such an SPV would be considered resident in Malaysia for tax purposes as required under the ABS Guidelines. Nevertheless, the acquisition of Ringgit assets by an entity incorporated in Labuan and the issuance of Ringgit denominated asset-backed debt securities by it to domestic residents, would among others, be subject to the approval of the Controller of Foreign Exchange. Parties should also be aware that the Offshore Companies Act 1990 places some restrictions on the activities of such offshore entities.

Remark: A Bond is a debt investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate. Bonds are used by companies, municipalities, states and U.S. and foreign governments to finance a variety of projects and activities.