Valsen Fiduciaries Funds

Isle of Man Regulated Fund

The Financial Services Authority of Isle of Man (FSA), the regulatory authority on the Isle of Man responsible for collective investment schemes, is committed to applying international standards of regulation and supervision across all areas of its work in order to maintain the integrity of the Isle of Man’s financial system.

Collective investment schemes in the Isle of Man are regulated by the Collective Investment Schemes Act 2008.

About Isle of Man Regulated Fund

The Regulated Fund is an Isle of Man fund which has detailed regulations applying to it. Managers cannot be appointed to such a fund without the Isle of Man Financial Services Authority’s prior consent.

A Regulated Fund may be constituted as either an open-ended investment company or a closed-ended investment company.

Isle of Man Regulated Fund Legal Requirements

Requirements Description
  1. Applicable legislation

Collective Investment Schemes Act 2008

Collective Investment Schemes (Regulated Fund) Regulations 2017

  1. Supervising Authority

Financial Services Authority of Isle of Man

  1. Corporate vehicle permitted

An open ended investment company (OEIC)

Closed ended investment company (CEIC)

  1. Share capital or equivalent
    • Minimum subscription

None

    • Minimum investors

None

  1. Directors / Partners / Trustees
    • Minimum number

2

    • Corporate Directors / Partners / Trustees allowed

Yes

    • Local Directors / Partners / Trustees required

1

  1. Fund functionaries required
    • Custodian
      • Custodian required
Yes
      • Local custodian required

No

      • Eligible custodian

Financial institution licensed under the Financial Institutions Act, 2004 or

Trustee services provider licensed under the International Corporate Services Providers Act, 2003 or

Any other person as the authority may approve

    • Fund manager / Investment manager
      • Fund manager required
Yes
      • Local fund manager required

Yes

      • Fund manager requires to be licensed

Yes

      • Eligible fund manager

Fund manager must be licensed in Isle of Man and must be appointed with consent from FSA

    • Fund administrator
      • Fund administrator required
Yes
      • Local fund administrator required

No

      • Eligible fund administrator

Isle of Man licensed fund administrator or

Approved Foreign Administrator

    • External auditor
      • External auditor required
Yes
      • Local external auditor required

Yes

      • Eligible external auditor

Qualified local auditor must be appointed

  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

£2,279

    • Annual license fee

£1,573

  1. Estimated license processing duration

3 months

Ongoing Obligations

Requirements Description
Monthly obligations
None
Quarterly obligations
None
Annual obligations
Submit annual audited accounts to FSA within six (6) months after the fund’s financial year-end.
Other obligations

Directors, manager and custodian have certain duties to submit reports to the FSC if:

  • the fund is not being properly operated
  • the applicable regulations are not being complied with
  • a director or the auditor is removed or resigns
  • financial statements are late or the accounts are qualified by the auditors

The directors and manager must submit an annual compliance declaration to the FSC

The manager must ensure adequate procedures and controls are in place and notify the custodian of material lapses.

Tax Obligations and Other Exemptions
Requirements Description
Business Tax
The standard rate of income tax for resident and non-resident companies is 0%.
Surtax
Mutual funds are exempt from payment of Surtax tax.
Alternative Minimum Tax
Mutual funds are exempt from payment of Alternative Minimum tax.
Withholding Tax
No withholding tax is payable on dividends and/or interest payable.
Value Added Tax (VAT)
VAT is not applicable to mutual funds in its entirety.
Stamp duty Act
Mutual funds are exempt from payment of stamp duty.
Capital Duty
Capital duty is payable up to a maximum of GBP 5,000 on the creation of new share capital in a company incorporated under the 1931 Companies Act.
Payroll Tax
Mutual funds are exempt from payment of Payroll tax.
Social Security
An employer is required to make earnings-related social security contributions. The general rate is 12.8% on weekly earnings in excess of GBP 118.
Transfer Tax
Mutual funds are exempt from payment of transfer tax.

Benefits of a Isle of Man Regulated Fund:

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