“In recent years, the fund industry in Gibraltar has seen rapid and impressive growth, and it continues to expand at a phenomenal rate. As a result, Gibraltar has become a serious option for individuals and companies considering where to base
investment funds.
Hassans has been at the fore front of this development, advising both the Government of Gibraltar and most of the funds domiciled in Gibraltar.”
Types of Funds in Gibraltar
Private Funds
A Private Fund is a fund that is offered to a restricted class of up to 50 investors. Generally this fund is suitable for investors who are friends, family or close clients of the promoters who establish the fund, or possibly employees of a firm.
A Private Fund is exempt from any licensing requirements, and must remain private for a year from the date of offer.
Experienced Investor Funds
One of the most exciting and competitive innovations in the Gibraltar fund industry is the Experienced Investor Fund (“EIF”). An EIF is a fund which is highly versatile and lightly regulated. Investors in these funds must:
- be investment professionals,
- have a net worth in excess of €1,000,000; OR
- invest a minimum of €100,000 in the fund.
An EIF can be set up in a matter of days and does not require prior regulatory approval. Authorisation is achieved by simply notifying the Financial Services Commission (“FSC”) of the fund’s launch within 14 days. The notification must be accompanied by the fund’s prospectus, memorandum and articles of association, a legal opinion from Gibraltar counsel confirming that the fund has been set up in accordance with the law, a form completed by the administrator and the prescribed fee.
Two of the directors of an EIF must be authorised by the FSC and reside in Gibraltar. An EIF must also have a Gibraltar administrator and auditor. There are no restrictions on the location of the custodian or prime broker, and no investment or borrowing restrictions. An EIF may take the form of a company, a protected cell company, a unit trust, a limited partnership or any other vehicle that is acceptable to the FSC.
UCITS Funds
If the purpose of a fund is primarily to invest in transferable securities such as stocks and bonds listed on a recognised European Community or familiar stock exchange, a fund may be licensed in compliance with the European directives on Undertakings in Collective Investment in Transferable Securities (“UCITS”).
Since Gibraltar is within the European Union it has the right to passport its financial services throughout Europe. Gibraltar UCITS funds may therefore passport their services within the European Union on the basis of their Gibraltar licence.
Non-UCITS Retail Funds
Non-UCITS retail funds are licensed by the FSC. The licensing procedure generally takes between three to six months and involves the submission of the formation documents of the fund and its prospectus to the FSC along with application forms on the fund, its directors and investment manager.
Protected Cell Companies
The use of a Protected Cell Company (“PCC”) allows a fund to be set up so that assets and liabilities are split between different ‘cells’. Each cell then serves as a sub-fund, which can be used by separate clients or by one client wishing to promote several investment strategies.
There is no limit to the number of cells a PCC may create, and they may be licensed as EIFs, Non-UCITS, Retail Funds or UCITS Funds.
