There are three legal forms of funds available in Gibraltar:
- Gibraltar Private Fund;
- Experienced Investor Fund;
- UCITS Fund.
A Gibraltar Private Fund is an extremely useful, simple and efficient fund structure. This type of fund is not listed on any stock exchange and cannot have more than 50 investors. Although there must be some identifiable link between the investors in a Private Fund, there are no investment restrictions whatsoever. This fund is particularly suitable for investors who are close friends or family.
Following the transposition of the Alternative Investment Fund Managers Directive into local law in July 2013, a Private Fund (previously exempt from any licensing requirements) now has to register and report to the local financial regulator. Such a fund does not have to adhere to any investment or borrowing restrictions and benefits from a “light –touch” regulatory regime.
An Experienced Investor Fund (EIF) is a fund which is highly flexible in terms of establishment, portfolio composition, investment strategy and borrowing restrictions. However, there are restrictions on the type of investor that may invest in an EIF. All eligible investors must be "Experienced Investors".
An experienced investor is a person or body who, at the time of the investment falls into one of the following categories:
- A person or partnership whose ordinary business or professional activity includes, or it is reasonable to expect that it includes, acquiring, underwriting, managing, holding or disposing of investments, whether as principal or agent, or the giving of advice concerning investments;
- A body corporate which has net assets in excess of €1 Million or which is part of a group which has net assets in excess of €1 Million;
- An unincorporated association which has net assets in excess of €1 Million;
- The trustee of a trust where the aggregate value of the cash and investments which form part of the trust's assets is in excess of €1 Million;
- An individual whose net worth, or joint net worth with that person's spouse, is greater than €1 Million, excluding that person's principal place of residence;
- A participant who has a current aggregate of €100,000 invested in one or more experienced investor funds;
- A participant who invests in a minimum of €50,000 in an experienced investor fund and who has been advised by a professional adviser to invest in the fund and the fund’s administrator has received confirmation of such advice;
- A participant who is a professional client, as defined under the Financial Services (Markets in Financial Instruments) Act 2006;
- A participant in a fund that has re-domiciled to Gibraltar where the Authority has permitted the inclusion of such participant either in respect of a specific fund or generally in respect of funds or a category of funds from a certain jurisdiction.
An EIF can be set up in a matter of days. It does not require prior regulatory approval. Regulatory approval may be obtained post – establishment by simply notifying the local regulator within 10 days.
Whether or not an EIF has appointed an investment management company, the ultimate responsibility for the investment management function as well as all operational and other aspects of the fund) lies with the fund directors.
Every Experienced Investor Fund must appoint at least two EIF directors that have been authorised by the local financial regulator. The remaining fund directors need not be approved EIF directors.
Given that they are very flexible structures, the Gibraltar Private Fund and Experienced Investor Fund structures are often of great interest to clients wishing to set up funds in Gibraltar. Neither structure has any investment restrictions. Both of these fund types are subject to light touch regulation and are cost effective to setup and run.
This fund type is best suited to funds that invest in transferable securities on recognised stock exchanges. Such a fund will need to obtain a licence under the European directives on Undertakings in Collective Investment in Transferable Securities (UCITS).
Given that Gibraltar is within the European Union, Gibraltar UCITS funds may market themselves and be passported across the European Union.
Disclaimer: This website contains general information only, without any warranty that the content is accurate, complete or fit for a particular purpose. Neither Castle Fund Administrators Limited nor The Castle Trust Group accept any responsility for loss which may arise from reliance on information contained in this website and recommends that for a specific matter a suitable professional is consulted. Neither Castle Fund Administrators Limited nor The Castle Trust Group will be liable for any damages of any kind resulting from the use of this website.
Castle Fund Administrators Limited is licensed and regulated by the Gibraltar Financial Services Commission under licence number FSC0955CIS, to provide fund administration services to collective investment schemes.