Valsen Fiduciaries Funds

Bahamas SMART Fund

The Securities Commission of the Bahamas (SCB) regulates mutual funds under the Investment Funds Act (IFA), 2003. This Act sets out the guidelines pertaining to the application and licensing of Bahamas Mutual funds

vanuatu-flag valsen-funds-fund-services

About Bahamas SMART Fund

The Investment Funds Act (IFA), 2003 positioned the Bahamas at the cutting edge of modern investment fund administration. The IFA also maintains the existence of a dual licensing regime whereby the Securities Commission of the Bahamas (SCB) is permitted to license all classes of funds and unrestricted fund administrators (UFA) may license professional & SMART funds
Bahamas SMART Fund is a fund suitable for innovative structuring of investment funds. Four SMART fund templates have received SCB approval for the following purposes:

  • Discretionary managed clients: to provide an investment vehicle for client funds managed under a discretionary management service
  • Incubator fund: to provide an incubator structure to generate performance history prior to upgrading to a third party fund.
  • Private client fund: to provide a credible, licensed holding vehicle for a small group of persons, perhaps under a family office structure
  • Transitional exempt fund: a special class established to permit funds previously exempt due to the existence of no more than 15 investors with the power to remove the promoter, to be brought within the regulatory scope of the SCB.

Bahamas SMART Fund Legal Requirements

Requirements

Description

  1. Applicable legislation

Investment Funds Act (IFA), 2003 .

  1. Supervising Authority

Securities Commission of the Bahamas (SCB )

  1. Corporate vehicle permitted

Any Licensed structures:

IBC (International Business Company)

LP (Limited Partnership)

Trust with units representing ownership

Limited Liability Company

Managed Investment Companies with shares, or to a lesser extent

  1. Share capital or equivalent

    • Minimum subscription

The SMART Fund : None
    • Minimum investors

This is as below:

SMART Fund Template 001: None

SMART Fund Template 002: Not more than 10

SMART Fund Template 004: Not more than 5

SMART Fund Template 005: Not more than 5

SMART Fund Template 006: None

SMART Fund Template 007: Not more than 50

  1. Directors / Partners / Trustees

    • Minimum number

2

    • Corporate Directors / Partners / Trustees allowed

Yes

    • Local Directors / Partners / Trustees required

No

  1. Fund functionaries required

    • Custodian

      • Custodian required

Yes

      • Local custodian required

No

      • Eligible custodian

Any other person as the Securities Commission of the Bahamas (SCB ) may approve.

    • Fund manager / Investment manager

      • Fund manager required

Yes

      • Local fund manager required

No

      • Fund manager requires to be licensed

Yes

      • Eligible fund manager

Securities Commission of the Bahamas (SCB ) licensed fund Manager

Approved Foreign Fund Manager by any other authority recognized by Securities Commission of the Bahamas (SCB )

    • Fund administrator

      • Fund administrator required

No

      • Local fund administrator required

No

      • Eligible fund administrator

Securities Commission of the Bahamas (SCB) licensed fund administrator

Approved Foreign Administrator by any other authority recognized by Securities Commission of the Bahamas (SCB )

    • External auditor
      • External auditor required

Yes

      • Local external auditor required

No

      • Eligible external auditor

Qualified local auditor approved by the commission or

Foreign auditor approved by the commission

  1. Asset Requirements

    • Restriction on type of asset class invested

None

    • Asset diversification requirements

None

    • Limitation on size of the fund or total assets under management

None

  1. Local physical office required

Yes

  1. Prospectus / Offering Memorandum required to be filed

Yes

  1. Eligible for listing

Yes

  1. License fees

    • License application fee

SMART Fund with administrator: USD 1,300
SMART Fund with administrator: (fast tracked application) USD 2,500
SMART Fund – Self Administered: USD 1,300
SMART Fund – Self Administered: (fast tracked application) USD 2,500
    • Annual license fee

SMART Fund with administrator: USD 1,750
SMART Fund with administrator: (fast tracked application) USD 1,750
SMART Fund – Self Administered: USD 2,000
SMART Fund – Self Administered: (fast tracked application) USD 2,000
  1. Estimated license processing duration

3 months

Ongoing Obligations

Requirements Description
Monthly obligations
None
Quarterly obligations
None
Annual obligations
None
Other obligations

In the case of SMART funds 002, 004, 005 and 007 such funds are not required to be audited annually if all of the holders of equity interests in the fund unanimously waive the requirement for the fund to have an annual audit. If the annual audit requirement is waived, the investment fund is required to file semi-annual performance reports with the Commission.

Tax Obligations and Other Exemptions
Requirements Description
Business Tax
None
Withholding Tax
None
Value Added Tax (VAT)
Exempted
Stamp duty Act

Property Transactions up to BS $100,000 is 2.5%

Duty on sales over BS$100,000 remained at 10%

Trades Tax Act
None
Immovable Property Transfer Restriction Act
None
Immigration Decree
None
Exchange Control Act
Exempted
Foreign Earnings Act
Exempted

Benefits of a Bahamas SMART Fund:

  • Ease and speed of establishment
  • Flexible structuring of the entity
  • Favourable compliance restrictions
  • Friendly regulatory environment