Gibraltar has developed a financial and commercial infrastructure to meet the needs of new investment funds that are seeking a low-cost but very well regulated operation based in Europe
The Rock is fully compliant with EU financial services regulation, money laundering and co-operation rules and has achieved OECD White List status. As a business location, it provides a high quality professional services overseen by a European standard of regulation.
Gibraltar is a low-tax jurisdiction with a headline 10% corporate tax rate. However, income received by a Gibraltar fund which is accrued and derived outside of Gibraltar is not taxable in Gibraltar and neither is investment income nor overseas rental income. This favourable income tax regime, coupled with no VAT or capital gains tax, makes Gibraltar a particularly attractive Fund destination.
Gibraltar funds can also benefit from highly-developed business services infrastructure and an a approachable regulator and professional bodies. GFIA (Gibraltar Funds & Investment Association) represents the interests of the funds and investments sector in Gibraltar.
Gibraltar funds or Gibraltar Experienced Investor Funds (“EIFs”) are probably the most user friendly investment funds not only within the EU but also when compared to other traditional offshore centres such as the Caribbean. EIFs are renowned for being one of the quickest to market. Gibraltar is also the only jurisdiction within the EU that allows for the pre-authorisation launch of funds.
With the implementation of the Alternative Investment Fund Managers Directive (“AIFMD”), transposed in Gibraltar legislation via the Financial Services (Alternative Investment Fund Managers) Regulations 2013, all EU funds will either be UCITS or Alternative Investment Funds (“AIFs”). Therefore, the scope of the AIFMD is very large and in Gibraltar it covers EIFs, authorised funds, private funds and some recognised funds. The AIFMD, however, does not directly regulate the operations of AIFs but instead regulates the managers of the AIFs; i.e. the alternative investment fund managers (“AIFMs”). On adoption of the legislation, Gibraltar has taken a flexible stance as allowed by the directive and has kept its EIF regime for those funds and managers that are out of scope of the directive while allowing those that wish to opt in to the AIFM regime in order to take advantage of the EU wide market potential.
Gibraltar funds have private placement arrangements with some EU jurisdictions like Germany, making Gibraltar an onshore jurisdiction of choice within the EU for funds to continue to market there. Gibraltar’s private placement regime would be an opportunity for out of scope funds and managers post Brexit as they would continue to operate and be promoted within the EU based on these arrangements.
At RSM we have specific expertise in regulated investment funds, with particular focus on private equity and real estate. We endeavour to understand our clients’ business and make sure that our services are well-suited to their needs, either by providing fund administration services or fund audit services. Our range of services include:
- Fund administration services including including redomiciliations, accounting, bookkeeping, reporting, corporate services, full administrative follow-up and safe-keeping of corporate documents;
- Transfer agency services including well-informed investor and AML/CBT checks, keeping of register and handling of subscriptions/redemptions;
- Private equity depositary services as required for in-scope AIFs;
- Directorships – provision of local EIF authorised directors as required for good corporate governance; and
- External audit – quality audit from our highly experienced team in this sector.