Bermuda has a long-standing reputation as a high-quality
jurisdiction in which to domicile an offshore fund, whether as a
standalone vehicle or the now-familiar master/feeder structure.
What follows is an overview of some
recent changes, current developments and those anticipated in the
near future, all of which are intended to ensure that this
reputation is preserved.
After collaboration between the Bermuda Government, Bermuda
Monetary Authority (BMA) and industry
stakeholders, a 2013 amendment to the Investment Funds Act 2006
introduced two new classes of exempt funds: the Class A Exempt Fund
(Class A Fund) and Class B Exempt Fund
(Class B Fund).
The defining features of a Class A Fund are light touch
regulation and speed to market. Subject to certain eligibility
requirements (broadly experienced/high value investors with a
manager licensed in a recognised jurisdiction or with $100 million
of assets under management) the fund can be launched immediately
upon filing with the BMA.
If the Class A Fund qualifications surrounding the investment
manager are not met, a Class B Fund may be appropriate. Class B
Funds also benefit from a less onerous regulatory regime, although
an application to the BMA is required.
Bermuda is one of the few jurisdictions where legislation
permits the appointment of managing trustees. A managing trustee,
who may be an investment manager, may be appointed as co-trustee
with another trustee (often referred to as a custodian or
administrative trustee). This enables the trust instrument to
provide the managing trustee with exclusive control over management
of the fund's investments with the administrative trustee not
liable for the acts or omissions of the managing trustee.
The Department for International Tax Cooperation has made certain important announcements with respect to Cayman Islands Financial Institutions complying with their Automatic Exchange of Information obligations.
Now that the United Kingdom has served notice to leave the European Union under Article 50 of the Lisbon Treaty, managers of offshore funds have a clearer timetable for when Brexit will happen, with the UK scheduled to leave the EU in March 2019.
The Limited Liability Partnership Act 2016 (the "LLP Act") came into force in Mauritius on 3 January 2017 and introduces a new corporate structure in Mauritius; the Limited Liability Partnership (commonly known as LLP).
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