Resident director

Every offshore company must have at least one director who may be a resident director.[1] Only an officer of a trust company or a domestic company wholly owned by the trust company shall be appointed as a resident director of an offshore company.[2] A director can be either a corporation or a natural person. Prior to his appointment as a director, a person must give his consent in writing to act as a director.

A resident director shall not be subject to retirement but he may be replaced by another officer of the trust company. A resident director is entitled to vote without disclosing his interest as a director in other offshore companies. A resident director is bound by the secrecy provision that prohibits him from disclosing any information he obtains by virtue of his office unless he believes that fraud is or is likely to be practised by the offshore company.

A person is disqualified from being a director of an offshore company if he has, either in Labuan or elsewhere:

a) been convicted of an offence in connection with the promotion, formation or management of a corporation;

b) been convicted of any act involving fraud or dishonesty; or

c) adjudged bankrupt and is still undischarged.

The first director is normally appointed by the members and where there is casual vacancy, a directorship may be filled by a person appointed by the continuing director.

Directors’ duties

Every director of an offshore company must at all times act honestly and use reasonable diligence in the discharge of his duties. He must not make improper use of any information acquired by him through his office and gain advantage, directly or indirectly. A director who is in any way directly or indirectly an interested party in a contract with the company, must declare the nature of his interest. Likewise, where there is a conflict arising between his duties in the company and his personal interest.