Valsen Fiduciaries Funds

Bermuda Administered Fund

The Investment Funds Act 2006 (“the Act”) provides the statutory basis for regulating funds in Bermuda. The Act deals with the establishment, operation and regulation of Administered funds, unit trusts, and partnership funds and is intended to protect the interests of investors.

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About Bermuda Administered Fund

A fund will qualify for classification as an administered fund if its administrator is
licensed under the IF Act and:

  • Pursuant to its constitution and prospectus it requires participants to
    invest a minimum of $50,000 in the fund; or
  • It is listed on a stock exchange recognized by the Authority for this
    purpose.

Bermuda Administered Fund Legal Requirements

Requirements

Description

  1. Applicable legislation

Vanuatu Mutual Fund Laws of 2005

  1. Supervising Authority

Financial Service Commission

  1. Corporate vehicle permitted

  • A company incorporated in Vanuatu or in a recognized jurisdiction.

  • A limited partnership registered in Vanuatu or in a recognized jurisdiction.

  • A unit trust registered in Vanuatu or in a recognized jurisdiction

  1. Share capital or equivalent

    • Minimum subscription

None

    • Minimum investors

None

  1. Directors / Partners / Trustees

  • Minimum number

2

    • Corporate Directors / Partners / Trustees allowed

No

    • Local Directors / Partners / Trustees required

No

  1. Fund functionaries required

    • Custodian

      • Custodian required

Yes

      • Local custodian required

No

      • Eligible custodian

Licensed/Approved Custodian

    • Fund manager / Investment Adviser

      • Fund manager required

Yes

      • Local fund manager required

No

      • Fund manager requires to be licensed

No

      • Eligible fund manager

Licensed Fund manager

    • Fund administrator

      • Fund administrator required

Yes

      • Local fund administrator required

No

      • Eligible fund administrator

Licensed fund administrator

    • External auditor

      • External auditor required

Yes

      • Local external auditor required

No

      • Eligible external auditor

Qualified auditor approved by the Vanuatu FSC

  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

No

  1. Prospectus / Offering Memorandum required to be filed

Yes

  1. Eligible for listing

Yes

  1. License fees

    • License application fee

USD 250

    • Annual license fee

USD 1,000

  1. Estimated license processing duration

3 months

Ongoing Obligations

Requirements Description
Monthly obligations
None
Quarterly obligations
None
Annual obligations
The fund must prepare annual financial statements which will be audited.
Other obligations
  • The fund must appoint, or will on authorization appoint, an investment manager, an auditor and an
  • The fund property must be entrusted to a custodian who must be licensed in Bermuda or, if incorporated elsewhere, must be subject to equivalent regulatory supervision.
  • The custodian must also be independent
  • The operator and its proposed service providers must be fit and proper persons to act as such and the combination of their experience and expertise must be appropriate for the purposes of the fund;
  • The fund must comply with the requirements of the fund rules and fund prospectus rules., resignation or removal of a Director or officer
Tax Obligations and Other Exemptions
Requirements Description
Business Tax
Administered funds are exempt from business tax.
Withholding Tax
No withholding tax is payable on dividends and/or interest payable.
Value Added Tax (VAT)
VAT is not applicable to Administered funds in its entirety.
Stamp duty Act
Administered funds are exempt from payment of stamp duty Tax
Trades Tax Act
Administered funds are exempt
Immovable Property Transfer Restriction Act
Administered funds are exempt
Immigration Decree
Administered funds are exempt
Exchange Control Act
The provisions of the Exchange Control Act do not apply to Administered funds.
Foreign Earnings Act
The Foreign Earnings Act is not applicable to Administered funds in its entirety.

Benefits of a Bermuda Administered Fund:

Bermuda is a premier international financial center, largely because of the structural and operational advantages it offers, including:

  • Speed-to-market Strategic proximity to serve global clients
  • Tax neutrality – no taxes on income, dividends or capital gains
  • Access to highly qualified professionals well-versed in investment funds