In recent years, Gibraltar has built an enviable reputation as a leading jurisdiction for fund management and administration. This is principally due to its flexible regulatory framework, competitive tax regime, and well-established financial services infrastructure. Although other international finance centres may come to mind more readily, Gibraltar offers a compelling alternative: British option within a European time zone – and at a reasonable cost. 

‍

The jurisdiction provides a secure, transparent, and highly efficient environment for establishing, managing, and administering funds, making it an attractive location for fund managers, institutional investors, and asset managers from around the world.

‍

Gibraltar offers a range of compelling advantages for fund establishment and management, which I have outlined below. These apply broadly to Gibraltar company and Gibraltar trust business but there are specific areas in the funds sector that make this small jurisdiction in the western Mediterranean an ideal location to establish and manage funds of all types. What might encourage clients and their advisers to consider the Rock when deciding on a jurisdiction for their fund?

‍

The Gibraltar Financial Services Commission (GFSC) supervises and regulates fund activity in the jurisdiction. Its Funds and Collective Investment Schemes framework provides clear guidelines for the establishment, operation, and management of various fund types. These include mutual, hedge, private equity, and venture capital funds. The regime aligns with international best practices, ensuring the structuring, operation, and administration of Gibraltar funds are compliant with both local and global standards. Locally, the Gibraltar Funds & Investments Association (GFIA) represents the industry. 

‍

Fund administration services in Gibraltar typically include the incorporation and licensing of the fund (as a company) and an entity that will manage it, if not already in place. Agreements, including the fund prospectus, are drafted and introductions made to other professional firms including bankers and auditors as required. 

‍

The most common fund type in Gibraltar is the Experienced Investor Fund (EIF). This regulated collective investment scheme targets professional, high net worth or experienced investors who meet specific qualifying criteria based on their previous investment experience, or existing EIF exposure. Legislation governing EIFs has been in place locally for twenty years. 

‍

Funds structured as EIFs offer flexibility and are less restrictive making them attractive to investors seeking an enhanced degree of independence in managing their investments. A qualified administrator is mandatory and two of the EIF’s directors must be Gibraltar resident and GFSC authorised. Additionally, an auditor registered locally will sign the EIF’s audited accounts.

‍

EIFs may be structured in a way to suit the client employing a range of corporate vehicles that may include limited companies, partnerships, protected cell companies (PCC), or other GFSC-approved entities. There is no limit to the size, nor asset classes, in which EIFs may invest and leverage is permitted. For example, Gibraltar’s bespoke Distributed Ledger Technology (DLT) legislation has allowed it to become the world’s most important centre in this field. 

‍

Private Funds in Gibraltar are unregulated and not subject to any licensing requirements. These are only available to a restricted, identifiable group of investors, limited to fifty participants. Private Funds cannot be listed on a stock exchange. 

In addition to its well-regulated framework, Gibraltar’s advantageous tax regime is particularly attractive to fund managers. Gibraltar does not impose capital gains or inheritance tax further adding to its attractiveness as a tax-efficient domicile for funds. Moreover, the absence of VAT on the already cost-effective level of management and administration services further reduces operational costs.

‍

Gibraltar adheres to rigorous anti-money laundering (AML) and counter-terrorism financing regulations. Funds operating in the jurisdiction are subject to strict due diligence procedures and ongoing reporting requirements. The GFSC maintains a high regulatory standard, aligning with both pre-Brexit EU regulations and global financial crime prevention practices. 

‍

Gibraltar provides a highly conducive environment for fund management, combining a low-tax regime with a flexible regulatory framework, and a highly skilled professional services network. Its strategic location, coupled with EU-aligned regulations, makes it a hugely attractive jurisdiction for fund managers and investors alike.

‍

The operational advantages of Gibraltar include lower costs compared to most comparable jurisdictions, faster time-to-market and the ability to operate in a familiar, English-speaking environment. Gibraltar is also in the European time zone, making it convenient for cross-border communication and its financial services industry enjoys strong relationships with both local and international banks.

‍

With its unique blend of regulatory flexibility, tax efficiency, and operational advantages, Gibraltar stands out as an ideal jurisdiction for fund establishment. Its highly regarded financial services infrastructure and attractive tax regime make it an excellent choice for fund managers and investors alike.

‍

This really is an opportune moment to consider Gibraltar when establishing a fund. Feel free to contact me for a no-obligation chat to learn more.